KARACHI: Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) Wednesday held several stakeholder meetings across country to identify issues and potential of trade between Pakistan & Afghanistan in last 6 months.
The meetings were held with different trade bodies, private stakeholders across the border and government functionaries.
After Afghan regime change in August 2021 and international sanctions, banking channel in Afghanistan collapsed resulting in several difficulties in trade payments. Government of Pakistan (GOP) and State Bank of Pakistan (SBP) provided alternate solutions by allowed CoC facility (withdrawn in December 2021), trading in PKR and third-party payments.
However, due to continued sanctions third party payment being the most preferable solution is not implemented by corresponding banks rendering Pakistan commercial banks to refuse transactions related to Afghanistan.
This has become most critical and high impact issue currently being faced by Business community on both sides and requires immediate resolution to ensure that trade continues and revenue is generated for both governments. To deliberate the solution, PAJCCI organized an urgent meeting with State Bank of Pakistan.
The issue of reluctance shown by commercial banks in processing third party payments in context of Afghanistan is critically affecting the conduct of business, despite significant demand from different business segments from Afghanistan. Additionally difficulty in obtaining E-forms for CIS countries is limiting businesses to reap opportunities available.
Arshad Bhatti, Executive Director, Banking Policy & Regulations Group, informed that SBP has not implemented any restriction on Commercial banks in Pakistan, however cross border corresponding banks are refusing to conduct any transaction related to Afghanistan due to international sanctions however in light of recent amendment of GLA by US Treasury Department, SBP has been in constant communication with corresponding banks overseas and their representatives in Pakistan to resolve the issue. In addition, SBP has also involved MOFA and MOC to use their offices in resolving the issues and develop feasible alternate to process payments till third party payment system is functional. He advised that traders can bring foreign currency for payments over the counter by declaring at border customs counter and providing declaration document to banks.
He assured that in cases where banks refuse any legitimate request, same can be escalated to SBP via PAJCCI offices and SBP will take it up with relevant banks.
He thanked PAJCCI for raising the issues which are critical to Pakistan’s economic uplift and assured that SBP will continue to support business community and will take all measures to resolve third party payments.
Zubair Motiwala; Chairman PAJCCI appreciated the efforts of SBP and said that support of GOP entities is invaluable to the cause of economic uplift of the region and its dependent upon the uplift of Pakistan-Afghanistan economic activities which has potential of USD 15bn yearly.
He hoped that in the light of current amendments in GLA & UN aid package the issue of transaction processing will be resolved with the efforts of the SBP in short time.
Copyright Business Recorder, 2022