The State Bank on Monday decided to allow advance payment up to $10,000 against intended imports of spare parts for importer's own use without the requirement of a Letter of Credit or bank guarantee from the supplier. The State Bank issued a circular, addressing all authorised dealers in foreign exchange, asking them to follow the new instructions. "In order to address the genuine needs of the manufacturing, industrial sector, it has been decided to allow advance payment up to the amount of US$10,000 or equivalent thereof in other currencies per invoice, against intended imports of spare parts, consumables by manufacturing and industrial users for their own use without the requirement of a Letter of Credit or bank guarantee from the supplier," said the circular.
Authorised Dealers may, therefore, process such requests at their end while ensuring the bona fides of the underlying import transactions and ensuring that related shipping documents are submitted to them by the importers within four months of the advance payment.
The Authorised Dealers will pursue the matter with the importers and report those cases to the area offices of Foreign Exchange Operations Department, SBP-Banking Services Corporation, where the requisite documents are not produced within the prescribed time limit, said the circular.