In order to discourage imports, the State Bank of Pakistan Saturday announced withdrawal of facility of 100 percent advance payment against Letter of Credit (L/C) without guarantee from the supplier abroad for the import of all eligible items.
According to SBP DMMD Circular No. 18 of 2018, the term of Para 30, Chapter 13 of Foreign Exchange Manual 2018, Authorized Dealers were allowed to make import advance payments against irrevocable Letters of Credit (L/C) up to 100 percent of the value of the goods and up to $10,000 per invoice for the import of all eligible items without the requirement of L/C or bank guarantee from the supplier abroad.
However, it has been decided that this facility, which was allowed to Authorized Dealers to make advance payments, stands withdrawn with immediate effect. However, in case, Authorized Dealers deem that a request on the subject merits consideration, they may approach the State Bank of Pakistan along with appropriate recommendations on a case-to-case basis, it added.
According to the SBP, all other instructions on the subject will remain unchanged. Authorized Dealers have been advised to bring the above instructions to the notice of all their constituents and ensure meticulous compliance.