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SBP allows exporters to directly dispatch shipping documents sans limit

SBP allows exporters to directly dispatch shipping documents sans limit

KARACHI: The State Bank of Pakistan (SBP), through a statement issued on Thursday, has allowed the exporters to directly dispatch shipping documents of their consignments without any limit.

Previously, exporters could dispatch shipping documents directly to their foreign buyers for export consignments of up to $100,000 (equivalent in other currencies). This limit was in place since 2017.

Under the new rule, the SBP has added one condition: that the exporter’s export overdue is less than one per cent, and that the exporter has exports of at least $5 million in the three years.

The SBP has also increased the limit of invoice allowed to the banks to make advance payments on behalf of manufacturing and industrial concerns and commercial importers for import of raw material, spare parts and machinery, from $10,000 to $25,000.

“These measures are in continuation of facilitating export-oriented industries and manufacturing concerns in the backdrop of ease of doing business and promoting exports’ growth and will further contribute in improving the economic outlook of the country,” the SBP said.

The new steps are in line with previous steps the central bank took in January 2020 for export-oriented industries.

These included extending the facility to make advance payment up to $10,000 per invoice for the import of raw material, spare parts and machinery to commercial importers.

The SBP also allowed authorized dealers to effect import advance payment against irrevocable letter of credit, of up to 100pc of the value of the letter of credit, for the import of plant, machinery, spare parts and raw material.

The bank also extended the facility already allowed manufacturers to commercial importers as well, for the import of raw materials and spare parts on an open account basis.