FE Account Operations

FOREIGN EXCHANGE -
ACCOUNT OPERATIONS
Branch Operations & Account Services

Operations Manual
Version 3.0 – Dec 2021 Account Operations - FE
Account Operations – Foreign Exchange

APPROVAL SHEET
Document Ownership: Branch Operations & Account Services
Document Version: 3.0
Implementation Responsibility: Branch Operations & Account Services
Custodian: Branch Operations & Account Services
Operating Jurisdiction: HBL Pakistan
Review Frequency: 3 years or earlier if required
Review Responsibility: Branch Operations & Account Services
Last Approved: 2018
Approval Date:
Effective Date:
Next Review Date: 2024
Prepared by/ Reviewed by (Document Owner)
____________________
Ali Haider Gardezi
Head – Branch Operations Support & Governance
Stakeholder’s Review
Reviewed by
_________________
Ikramullah Khan
Head – Advisory & Policy Management –
Global Compliance
Concurred by
____________________ ____________________
Fouzia Jabeen Janjua Sagheer Mufti
Head – Branch Operations & Account Services Chief Operating Officer
Recommended By Approved By
___________________ ___________________
Muhammad Aurangzeb Board of Directors
President & CEO
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TABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................................1-1
1.1 Objectives & Scope ......................................................................................................................1-1
1.2 Type of FE Accounts ....................................................................................................................1-1
2. FOREIGN CURRENCY ACCOUNTS ..................................................................................................2-1
2.1 Introduction .................................................................................................................................2-1
2.2 Foreign Currency Deposit Schemes .............................................................................................2-1
2.3 Special Foreign Currency Account ...............................................................................................2-2
2.3.5 Special Foreign Currency retention Accounts of Exporters (Traders & Software Exporters) ......2-2
2.4 ‘Deposits and Withdrawals ..........................................................................................................2-4
2.5 Convertible and Non-Convertible Rupee Accounts .....................................................................2-6
3. ACCOUNT OPENING .....................................................................................................................3-1
A. Non-Residents:.............................................................................................................................3-1
4. OPENING OF NEW NON-RESIDENT ACCOUNTS OF PERSONS OTHER THAN BANKS .......................4-1
4.1 Introduction:................................................................................................................................4-1
4.2 Documentation Requirement ......................................................................................................4-2
4.3 Procedure for Account Opening through MISYS .........................................................................4-3
5. JOINT ACCOUNTS OF NON-RESIDENT WITH RESIDENTS ...............................................................5-1
6. SPECIAL CONVERTIBLE RUPEE ACCOUNTS ....................................................................................6-1
6.1 Introduction .................................................................................................................................6-1
6.2 Trading of Securities ....................................................................................................................6-1
6.3 Documentation Requirements ....................................................................................................6-2
6.4 Special Instructions regarding shares transferred under Central Depository System (CDS) of Central
Depository Companies (CDC) ..................................................................................................................6-3
6.5 Reporting of Special Convertible Rupee Accounts on Account of Portfolio Investment at Stock Exchanges
6-4
7. ACCOUNTS OF FOREIGN NATIONALS’ RESIDENT IN PAKISTAN .....................................................6-1
8. ACCOUNTS OF UNITED NATIONS AND OTHER FOREIGN ENTITIES ................................................8-1
8.1 Introduction .................................................................................................................................8-1
8.2 Account Opening Requirement ...................................................................................................8-1
9. REGARDING OPENING OF FOREIGN CURRENCY ACCOUNTS WITH BANKS IN PAKISTAN ...............9-1
10. FE MANUAL REQUIREMENTS .....................................................................................................10-1
11. OPERATIONS ON NON-RESIDENT ACCOUNTS OF PERSONS, FIRMS AND COMPANIES OTHER THAN BANKS
11-1
12. OPERATIONS ON NON-RESIDENT BANK ACCOUNTS ...................................................................12-1
12.1 Introduction ...............................................................................................................................12-1
12.2 Transfer to the Credit of Non-Resident Bank Accounts ............................................................12-1
12.3 Transfer to the Debit of Non Resident Bank Accounts ..............................................................12-1
12.4 Transfer between the Accounts of Non Resident Bank Branches or Correspondents ..............12-1
13. RESPONSIBILITY OF THE BANK REGARDING IRREGULAR OPERATIONS ON ACCOUNTS ...............13-1
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14. ACCEPTANCE OF DEPOSITS FROM FOREIGN BANKS OPERATING ABROAD AND OVERSEAS BRANCHES
14-1
14.1 Overview....................................................................................................................................14-1
14.2 Procedure of Payments in IFI Accounts .....................................................................................14-1
15. REPORTING OF LOCAL DISBURSEMENTS FROM FOREIGN CURRENCY ACCOUNTS ......................15-1
16. REPORTING OF INTEREST ON FOREIGN CURRENCY ACCOUNTS ..................................................16-1
17. MAINTENANCE OF RECORD OF FOREIGN CURRENCY TRANSACTIONS AND REPORTING TO THE STATE BANK
OF PAKISTAN ......................................................................................................................................17-1
18. PAYMENTS OF FOREIGN NATIONALS IN FOREIGN CURRENCIES..................................................18-1
19. FOREIGN EXCHANGE RECEIVED IN RESIDENTS IN PAKISTAN.......................................................19-1
20. ADDENDUM ...............................................................................................................................20-1
Record Retention Template ................................................................................................................20-1
References of Documents Used ..........................................................................................................20-2
Amendment Recording Sheet .............................................................................................................20-3
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1. INTRODUCTION
1.1 Objectives & Scope
1.1.1 This manual is based on the instructions issued by the State Bank of Pakistan (SBP) through
Foreign Exchange (FE) Manual setting out the terms and conditions for the authorized dealers
subject to which they may engage in transactions covered by the Foreign Exchange Regulation
Act, 1947. The objective of this Act is to regulate, in the economic and financial interest of
Pakistan, certain payments, dealings in foreign exchange, securities, import/export of currency
and bullion.
1.1.2 This manual is primarily focusing on the instructions contained in Chapter 6, 7 and 8 of the SBP
FE manual and bank's procedures for FE accounts. In addition to that certain guideline as
mentioned in the Chapter 20 of the FE Manual relating to Special Rupee Convertible Account
(SCRA) have also been discussed.
1.1.3 This Manual covers procedure which are carried out both at Centralized Operations Processing
Centre (COPC) and Branch relating to accounts of individuals, companies, firms, foreign missions
and other organizations, and Financials Institutions (FI), both domestic and foreign.
1.1.4 This manual primarily focuses on the instructions of FE Manual 2021. For general Account
Opening and Operations related procedures please Refer Account Operations Non-FE (Branch)
Manual except for the procedures specifically mentioned in this manual.
1.2 Type of FE Accounts
Based on SBP Guidelines, FE accounts can be categorized into the following:
Non-Resident Accounts:
1.2.1 As per the Notification No.FE1/63-SB dated 14th October, 1963 issued in pursuance of Section
20(I) (a) of Foreign Exchange Regulation Act (FERA), 1947, by SBP, all the accounts of the
individuals, firms, companies’ resident in countries outside Pakistan are classified as “Non-
Residents Accounts”. Furthermore, all nationals who have established their residence in
Pakistan but go out of Pakistan for employment, study, business tour, pleasure trip etc., are
treated as non-residents for the purpose of Section 5 (Restriction on Payments), except those
holding offices in service of Pakistan.
As per Chapter-8 of Fem-2021, Accounts of individuals, firms or companies’ resident outside

Pakistan are designated as non-resident accounts. As per Chapter-8 of FEM, a person shall be
treated as nonresident if his/her period of stay in Pakistan during a calendar year is less than
183 days, in aggregate. In this chapter, the regulations governing non-resident rupee accounts
opened and maintained by the following individuals and entities other than banks have been set
out:
a) Non-Resident Pakistanis (NRPs)

b) Foreign nationals except those who have obtained work visa/permit to work in Pakistan.
c) Firms, companies, etc. which are incorporated/registered outside Pakistan.
Branches may open and maintain following three categories of non-resident rupee accounts of the
individuals and entities:
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a) Non-Resident Rupee Account-Repatriable (NRAR)
b) Non-Resident Rupee Account-Non-repatriable (NRAN)
c) NRP Rupee Value Account (NRVA) for non-resident Pakistan only.
Branch should refer internal instruction circular No. P/INST/2019/195 dated October 1,2019 and
FE Circular # 01 & 03 dated August 05,2020, EPD Circular # 11 dated August 27, 2021 and
Chapter-8 of FEM-2021 for rules relating to Debit and Credit transactions through above three
categories of Non-Resident Rupee Accounts.
1.2.2 Investment in units of funds quoted at Stock Exchange and units of mutual funds registered as
Open End Schemes (OES) from NRVA through NRP Rupee Value Account (NRVA) Rules:
• Branches have to refer EPD-Circular 1 dated February 10,2021, wherein SBP has allowed
NRP Rupee Value Account (NRVA) holders to do investment in units of funds quoted at
Stock Exchange and units of mutual funds registered as Open End Schemes (OES) from
NRVA:
• Investment in units of funds quoted at Stock Exchange and units of mutual funds
registered as Open End Schemes (OES) under management of Asset Management
Companies (AMCs) licensed by SECP to provide asset management services.
• The transfer of funds for the above investments shall be allowed by the ADs through the
special instructions received from the account holder in this behalf.
• For investments, the procedure prescribed for investment/ disinvestment at Para 9
Chapter 20 of the Foreign Exchange Manual shall be followed.
• Proceeds from disinvestment/sale/maturity of Government of Pakistan’s debt securities,
residential and commercial real estate, quoted shares/units of funds, term deposits, units
of mutual funds registered as open end schemes, and profit/rent/dividend/interest on
such securities/properties/shares/units of funds/deposits received on account of
investments made from the account.
Resident Accounts:
1.2.2 Account Holders who have permanently returned to Pakistan or those who are on temporary
visit are not restricted from operating their accounts and it is not necessary for them to seek
approval of SBP for this matter, as long as they are resident in Pakistan. Moreover, these
accounts will be treated as Resident Accounts. In case of any doubt/uncertainty, as to whether
any account is to be treated as non-resident, an immediate reference is made to the SBP by the
Head – FX Approval Unit for a decision giving full particulars.
1.2.3 Bank may also transfer amounts to and from such accounts only in accordance with the
instructions laid down in this chapter.
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2. FOREIGN CURRENCY ACCOUNTS
2.1 Introduction
The Bank is authorized to open Foreign Currency Accounts of Customers without prior approval
of SBP. All the Foreign Currency Accounts are governed by the SBP’s Foreign Exchange
Regulations issued from time to time.
2.2 Foreign Currency Deposit Schemes
2.2.1 Currently, the Bank is authorized to open Foreign Currency Accounts of the Customers under
the various schemes introduced by SBP from time to time. These schemes are as follows:
a. Foreign Currency Accounts under FE-25 scheme

b. Special Foreign Currency Accounts
Eligible Customer
a. Pakistani Nationals resident in or outside Pakistan, including those having a dual nationality.
b. All Foreign Nationals, whether residing abroad or in Pakistan.
c. Joint Account in the names of Residents and Non-Residents.
d. All Diplomatic Missions accredited to Pakistan, and their Diplomatic Officers.
e. All International Organizations in Pakistan.
f. Firms and Companies established/incorporated and functioning in Pakistan, including those
having Foreign Share-Holdings.
g. Charitable Trusts, Foundations etc. which are exempted from Income Tax.
h. Branches of Foreign Firms and Companies in Pakistan.
i. Non-Resident Exchange Companies even if owned by a Bank or Financial Institution.
j. All Foreign Firms/Corporations, other than Banks and Financial Institutions incorporated and
operating abroad provided these are owned by persons who are eligible to open Foreign
Currency Accounts. List of banned entities is mentioned in Annexure R.
k. Exchange Companies licensed by the State Bank in terms of FE Circular No. 9 dated the 30th
July, 2002.
Non-Eligible Customer
a. Airline Companies.
b. Shipping Companies operating in/through Pakistan or collecting passage and freight in
Pakistan.
c. Investment Banks.
d. Leasing Companies.
e. Modaraba Companies.
f. Other companies which have been granted Licenses to deal in Foreign Exchange.
2.2.2 Accounts mentioned under eligible Customers cannot be fed with following a) to f):
a) any foreign exchange borrowed under any general or specific permission given by the State
Bank, unless otherwise permitted;
b) any payment for goods exported from Pakistan;
c) proceeds of securities issued or sold to non-residents;
d) any payment received for services rendered in or from Pakistan;
e) earnings or profits of the overseas offices or branches of Pakistani firms and companies
including banks, investment of resident Pakistanis abroad; and
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divulgence shall be viewed very seriously and shall warrant disciplinary/penal action.
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f) any foreign exchange purchased from an Authorized Dealer in Pakistan for any purpose
2.3 Special Foreign Currency Account
2.3.1 Special Foreign Currency Accounts are opened by the Bank after soliciting prior approval from
the Head Office. Following are the types of Special Foreign Currency Account which have not
been classified under any scheme and are opened under specific approval from SBP:
Foreign Currency Account of Private Power Projects
2.3.2 As permitted under Para-8 of Chapter-6 of FEM-2021, the Bank may open the Special Foreign
Currency Accounts/Off-shore Foreign Currency Accounts of Private Power Projects in Pakistan
as per the Implementation Agreements (IAs) entered into with Private Power and Infrastructure
Board (PPIB) and Government of Pakistan.
Foreign Currency Account of Foreign Oil/Mineral Exploration Companies and Foreign

Contractors and their Foreign Sub-contractors
2.3.3 As per Para-9(i) of Chapter-6 of FEM-2021, the Authorized Dealer may open the account of
Foreign Oil/Mineral Exploration Companies and Foreign Contractors and their Foreign Sub-
contractors under FE-25 or Special Foreign Currency Accounts subject to the condition that they
will meet all their expenditure in Pakistan in Pak Rupees only.
2.3.4 As per Para-9(ii) (a) Firms and companies raising foreign equity and foreign currency loan may
be allowed by Authorized Dealers to open special foreign currency account for receiving and
retaining the foreign funds on submission of information about the source of foreign funding
and the amount required to be retained in foreign currency. The funds available in such foreign
currency accounts can be used by the account holders for making only those types of payments
which are otherwise permissible in terms of the instructions laid down in this Manual (e.g.
imports, consultancy) and which are related to the business of the account holder. Any amount
not so used will be required to be converted into rupees in the inter-bank market and no
withdrawal will be allowed in the shape of foreign currency notes.
2.3.5 Special Foreign Currency retention Accounts of Exporters (Traders & Software Exporters)
2.3.6 As per Para 12(ii), Para 35 (iii) & Para 36, Chapter 12 of FEM-2021, an AD can open and maintain
Especial Foreign Currency Retention Accounts for exporters of goods and Software for retaining
prescribed percentage of their exports proceeds. SBP vide their EPD Circular Letter No. 02 of
2021 dated February 19,2021 has allowed to utilize without prior approval of SBP the available
balances in Special Foreign Currency Retention Accounts, for following purposes mentioned in
Para-40 of Chaper-12 of FEM-2021:
2.3.7 Special Foreign Exchange Regulations for Special Technology Zones.
In order to further the objectives of establishing the Special Technology Zones under the
aforementioned Ordinance, it has been decided to issue special foreign exchange regulations for
entities operating in Special Technology Zones in Pakistan, in terms of sub-section 5 of Section 19
of the Ordinance and in exercise of powers conferred under the Foreign Exchange Regulation Act,
1947. Authorized Dealers may open Special Foreign Currency Accounts of entities licensed by
Special Technology Zones Authority (STZA) under the Special Technology Zones Authority
Ordinance, 2020.
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For detailed requirements branches to refer FE Circular No. 08 dated December 11, 2020.
2.3.8
i. Payment of commission/discount to the overseas agents/buyers;
ii. Shortfall in realization up to 10% of the FOB value of export proceeds realized, subject to
submission of sufficient documentary evidence for short realization to the satisfaction of
concerned AD. Any shortfall exceeding 10% limit may also be adjusted through this account
subject to the adjudicating process in terms of Section 23B of FERA.
iii. Payment abroad against collection of commercial intelligence, purchase of designs/patterns,
market studies, bonafide export claims.
iv. Payment for fee/expenses related to advertisement, promotion, publicity, marketing, brand
building, shelf spacing etc. of products abroad through third party agent, e-commerce platforms
or through company’s own subsidiary/liaison/marketing office abroad.
v. Subscription fee for participation in foreign exhibitions, fairs for promotion/marketing of

company’s products;
vi. Payment to foreign consultant for acquisition of services from abroad in relations to enhancing
exports of goods/services;
vii. Payments for hotel booking and other travel expenses abroad, in lieu of official visits of company’s
employees;
viii. Payment for warehousing services including insurance of goods warehoused through third party
agent or through company’s own subsidiary/liaison/marketing office abroad;
ix. Payment of lab testing charges, audit/inspection/certification charges, logistics/other charges for
clearance of goods at destination port, as per the terms of contract;
x. Payment of debit notes to importer for chargebacks / penalties or any other charges incurred by
the importer on behalf of the exporter;
xi. Refund of advance payment received against goods/ services on account of cancellation of the
underlying contracts within one year from date of receipt of advance payments.
xii. Payments for registration of patents, copyrights, drug registration, license fee etc.
xiii. Payment for import of IT equipment and software by software exporters, subject to compliance
with applicable Import Policy Order and related laws/regulations issued by any government
department and SBP;
xiv. Payment for acquisition of digital services from abroad in accordance with the provisions of Para
14A, Chapter 14;
xv. Operational expenses of liaison/ marketing/ representative offices abroad of local companies in
accordance with the provisions of Para 13, Chapter 20;
xvi. Investment abroad by residents in accordance with the provisions of Para 13, Chapter 20.
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For details branches should refer relevant Paras of Chapters 12, 14 and 20 of FEM-2021 so that
special foreign currency retention accounts of exporters may be opened and maintained in line
with the regulations.
2.3.9 Foreign Currency Value Account (FCVA)
Branches may open ‘Foreign Currency Value Account (FCVA)’ of following:
a) A non-resident individual Pakistani
b) A resident individual Pakistan who has duly declared assets held abroad, as per wealth
statement declared in latest tax return with Federal Board of Revenue (FBR).
For features above accounts and operational guidelines i.e. debit and credit rules refer FE
Circular No.02 dated August 05,2020 and Para-8A of Chapter-6 of FEM-2021.
2.3.10 Foreign Currency Accounts of Public Sector Entities (PSEs):
As per FE Circulars No EPD/11618/EPP.16(37) Misc.2016 dated May 06,2016, and No

EPD/024891/EPP.16(326) PSEs/2017 dated October 24,2017, Foreign currency accounts of
Public Sector Entitles (PSEs) and autonomous bodies should not be opened without permission
of SBP.
2.4 ‘Deposits and Withdrawals
Deposits
2.4.1 Deposits are to be accepted from the Customers in the shape of Foreign Currency Notes of the
same currency in which the account is opened or other acceptable Foreign Currency Notes at
the prevailing exchange conversion rate. However, this facility is only available for Individual
Account Holders who are not engaged in any business.
2.4.2 The branch personnel must ensure that no Pak Rupee should be accepted from the Customer
for depositing it into the Foreign Currency Account.
2.4.3 In case of any deposit of Foreign Currency Notes of more than USD 10,000 (or equivalent in
other currencies) in a single day, the Account Holder shall be required to present the original
receipt of acquisition. Branches are required to keep on record the copy of such receipt which
may be checked by SBP Inspectors during the branch audits and their routine visits.
2.4.4 Non-filers maintaining foreign currency accounts cannot be allowed to deposit foreign currency
notes over the counters, however, as per EPD Circular Letter No. 07 dated April 19,2019, this
rule is not applicable to non-resident Pakistanis and foreign nationals maintaining their foreign
currency accounts.
A person shall be treated as non-resident if his/her period of stay in Pakistan during a calendar
year is less than 183 days, in aggregate.
Branches can accept FCY Cash deposits even the accountholder in Pakistan subject to
verification that accountholders period of stay in Pakistan he/she is still a non-resident.
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To avoid unauthorized deposits in FCAs of non-filers, branches must calculate number of days
of stay in Pakistan taking copies of passport(s) of non-resident showing entry /exit in/from
Pakistan and update in system i.e. Flag ‘Residence Country’ if any accountholder permanently
returned in Pakistan.
Branches may refer their requests to COPC for removing restriction in system on one off basis
for processing of cash deposits pertaining to non-resident accountholder(s)/foreign nationals.
Withdrawals
2.4.5 There is no restriction or limit for drawing available balances either in Foreign Currency Notes
or equivalent Pak Rupees from Foreign Currency Accounts of individuals under FE-25 scheme.
For Corporate/Business entities/legal entities cash withdrawals are not permitted, however,
where special permission of SBP are available, branches may allow upto the monthly limits
allowed by SBP.
Payment of Interest
2.4.6 Rate of Interest on various types of Deposits varies according to the period of deposits as well
as the status of accounts (i.e. Old Frozen Accounts/ New Foreign Currency Accounts).
2.4.7 Rates of Interest are determined and declared by Treasury FOREX through Circulars on the basis
of average London Inter Bank Official Rate (LIBOR) provided by the British Bankers’ Association
(BBA).
Operations on Foreign Currency Accounts under FE-12 Scheme
2.4.8 Prior to May 29, 1998, the Accounts were opened and operated under FE-12 scheme introduced
through FE Circular No. 12 dated January 29, 1973. All the accounts opened under the said
scheme were marked Frozen in compliance with FE Circular 12 dated May 29, 1998 and balances
Frozen in the Accounts were allowed to be withdrawn in PKR only.
2.4.9 Operations under the accounts maintained by the following Customers are not subject to the
above-mentioned restriction:
a. Diplomatic Missions accredited to Pakistan;

For accounts of Embassies and defense attaches’ specific permissions are sought from SBP
for monthly limits for, Cash deposits on account of visa fees, salary payments by transferring
from embassies main account to individual foreign currency accounts to their foreign staff
placed at embassies in Pakistan. Embassies are free to receive inward remittances from their
parent ministries/MOFA for retaining in FCY and also can remit funds from their home
country and third country with the permission of their parent ministry/MOFA and they can
utilize funds after converting FCY into PKR for local payments.,. Foreign currency cash
Withdrawals from FCY accounts of Embassies for travel purpose may be allowed as per
regulatory guidelines available in Para 10(ii) of Chapter-18 of FEM. Branches to maintain
record of cash withdrawals allowed as per limit allowed to per person in given period.
b. All International Organizations in Pakistan viz. International Monetary Fund (IMF),

International Bank for Reconstruction and Development (IBRD) and Asian Development
Bank (ADB);
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c. Non-Resident Employees of IMF, IBRD and ADB;
2.5 Convertible and Non-Convertible Rupee Accounts
2.5.1 Paragraph 8, Chapter 16 of the FE Manual provides that All Diplomatic Missions accredited to
Pakistan, their Diplomatic Officers and home-based members of the Mission's staff in Pakistan,
as also all international organizations in Pakistan and their expatriate employees, are allowed
to maintain two separate Rupee accounts with banks in Pakistan viz. (i) convertible Rupee
account and (ii) non-convertible Rupee account. Operations on these accounts are subject to
the following rules:
2.5.2 The convertible Rupee account can be credited with the following: -
• Foreign exchange received from abroad through normal banking channel.
• Foreign exchange encashed in Pakistan with any bank.
• Transfer from any other convertible Rupee account.
2.5.3 Other credits to the convertible Rupee accounts would require the prior permission of the SBP.
The convertible Rupee account can be debited by the Branch with the following without the
permission of the SBP: -
• Payments in foreign exchange abroad.
• Credit to any other convertible Rupee account.
• Transfer to a non-convertible Rupee account.
• Local disbursements.
2.5.4 The non-convertible Rupee account can be credited with the following: -
• Transfer of funds from convertible Rupee account.
• Remittances received from abroad through banking channel.
• Other receipts from authorized sources.
2.5.5 Remittance from a non-convertible Rupee account or transfers therefrom to a convertible
Rupee account is not permissible. This account can, however, be debited freely without State
Bank's permission for making local payments.
2.5.6 All payments to officials of Foreign Missions and International Organizations are to be made
from the convertible Rupee accounts of the Foreign Missions/International Organizations by
credit to the convertible Rupee accounts of the said officials maintained with banks. The officials
are free to transfer such amounts from their convertible Rupee account to their non-convertible
Rupee account as they may consider necessary for meeting their local expenses from time to
time.
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3. ACCOUNT OPENING
Following areas are covered in this section:
a) Non- Resident Accounts;

b) Resident Accounts;
c) Guidelines regarding opening of foreign currency accounts with banks in Pakistan; and
d) Special permission for foreign currency accounts.
A. Non-Residents:
This category includes the following accounts:
a) Opening of New Non-Resident Accounts of Persons other than Banks

b) Non-Resident Rupee Accounts of Foreign Bank Branches and Correspondents
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4. OPENING OF NEW NON-RESIDENT ACCOUNTS OF PERSONS OTHER THAN BANKS
4.1 Introduction:
4.1.1 As per Paragraph 1, Chapter 8 of FE Manual issued by SBP, a person shall be treated as non-resident
if his/her period of stay in Pakistan during a calendar year is less than 183 days, in aggregate.
Non Resident Accounts can be categorized into the following types:
4.1.2 A) Non-resident Rupee Accounts – Repatriable
B) Non-resident Rupee Accounts- Non-Repatriable
From above two categories, following classification can be made to understand non-
residents’ accounts:
a) Non -resident accounts of Pakistan nationals permanently residing and domiciled abroad.
b) Non-resident accounts of Pakistan nationals who are abroad for short visits.
c) Non-resident accounts of foreign nationals residing abroad.
d) Non-resident accounts of foreign nationals ordinarily resident in Pakistan but gone abroad for short
visits.
4.1.3 The accounts of following Persons are not marked as Non Resident:
a) The accounts of persons who hold office abroad in service of Pakistan;

b) The accounts of United Nations and its Organizations, which are free from financial controls under
United Nations (Privileges and Immunities) Act 1948;
c) The accounts of all Foreign Nationals who are resident in Pakistan;
d) The accounts of companies or firms (other than Banks) whose head offices or controlling interests
are outside Pakistan but the accounts are operated by persons residing in Pakistan;
4.1.4 The following Non-Resident accounts are treated as Resident on the Account Holder’s permanent return
or his temporary visit to Pakistan and where permission of SBP to operate these accounts is not required:
a) Non-resident accounts of Pakistani Nationals; and

b) Non-resident accounts of Foreign Nationals who are permanently residing and domiciled in Pakistan
but had gone abroad on temporary visits.
4.1.5 Account Opening Requirements
a. The RM/CSO/Designated Officer ensures at the time of account opening that the rupee funds with
which the account is being opened either represent receipts from abroad through banking channel
or rupee funds which have been accepted by SBP for remittance abroad.
b. The RM/CSO/Designated Officer determines the country of residence of all such Account Holders
through the document(s) outlined below in the ‘Documentation Requirement’ section. Non-Resident
Accounts are regarded for Exchange Control purposes as the accounts of countries in which the
Account Holder is permanently residing.
c. Country of Residence is selected from the list of countries available in the system.
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4.2 Documentation Requirement
4.2.1 The following document(s) are obtained by the RM/CSO/Designated Officer at the time of non-resident
individual account opening to determine the country of residence of the individual account holder in
addition to the other account opening requirements:
Non-Resident Individual
a) Attested copy of NICOP for oversees Pakistanis, where the person is eligible Foreigner of Pakistan origin or
eligible for POC if he is a foreigner and he had been a citizen of Pakistan at any time during his life.
b) Attested copy of the POC, where it has been issued to Pakistani Workers/Emigrants and Citizens/ Resident
abroad and Pakistanis holding dual nationality who have got themselves registered under the NADRA
Ordinance.
c) Bank accepts an attested copy of valid “Alien Registration Card” issued by National Aliens Registration
Authority (NARA) instead of CNIC in case of registered aliens who wish to open an account with the Bank in
Pak Rupee.
Foreign National
a) Attested copy of Passport’s first four pages
b) Attested copy of the Passport page where last entry into Pakistan is stamped
c) Attested copy of the valid Visa for Pakistan
d) Attested copy of “Work Permit” or “Employer’s Certificate” or “Employer Card”
f) Form of undertaking to be furnished by foreign nationals’ resident in Pakistan and companies and firms
whose head offices are outside Pakistan for maintaining Bank account i.e. Form Q.A.22 (Appendix V-5).
Please refer Annexure B.
Non-Resident Company
a) List of Directors on the company’s letter-head
b) Board resolution (signed by company secretary or any two Directors) containing the name of the authorised
person who will open and operate the account
c) Photocopies of valid Passports of all the Signatories and directors/ trustees to the account
d) Print of the company’s rubber stamp
e) Attested copy of the Memorandum and Articles of Association
f) Certificate of Registration/Incorporation
g) Power of Attorney attested by Embassy in favour of agent who is authorized to open an account on behalf
of such company
h) Board of Investment approval
i) Letter from the company indicating the person authorized to open and operate the account.
j) For Individual (natural person) shareholders holding 20% or above stake (10% or above in case of EDD) in an
entity, Documents required for identification and verification of such natural persons; and
k) For Legal Persons holding shares equal to 20% or above in an entity, documents required for identification
and verification of individual (natural person) shareholders holding shares equal to 20% or above of that
legal person.
Branch Office
a) A copy of permission letter from relevant authority i.e. Board of Investment.
b) Photocopies of valid passports of all the signatories of account.
c) List of directors on company letter head or prescribed format under relevant laws/regulations.
d) A Letter from Principal Office of the entity authorizing the person(s) to open and operate the account.
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4.2.2 In case of non-resident / foreign / multinational financial institutions belonging to those few countries
where passing of board Resolution for the purpose of Opening a Bank Account is not in vogue and certificate
of commencement of Business is also not issued.
a) Power of Attorney from the competent authority for opening a bank account.
b) Certificate from the Company Secretary, duly attested by the board that the entity started its business from
a certain date that certificate of commencement of business is also not issued in that country.
c) Shareholding structure will be mentioned on company’s letter head attested by the Company Secretary. (To
identity natural and legal person).
d) Photocopies of valid passports/ ID Documents of all the signatories/directors/beneficial owner to the
account.
e) Regional Chief (RC) / Functional Head Approval
f) PEP Approval in case of any PEP identified.
g) Key Fact Sheet as per account type required
h) Annexure B (KYC Form)
i) Relevant approval from senior management will be required etc.
Note: For Government Accounts standard documents as required for Non FE accounts will be obtained
by the Branch. Further, Branch and COPC will ensure that the SBP approval obtained by the Government
Department is in place.
Note: a. For FATCA related requirements, please refer Annexure U

b. For CRS related requirements, please refer Annexure AB
4.2.3 The account opening of “New to the Bank (NTB)” Individual Customers has been centralized at COPC
whereas account opening of Non Individual Customers/existing Customers are carried out in system
(MISYS) at Branches.
4.3 Procedure for Account Opening through MISYS
4.3.1 Welcoming Prospective Customers
The prospective Customers are greeted by the RM/CSO/ Designated Officer at the Branch and details about
the Bank's existing products under different types of accounts and the documentation requirements are
communicated.
4.3.2 Scrutiny of Documentation and Information
4.3.2.1 The document(s) are filled by the Customers and submitted to the RM/CSO/Designated Officer who
scrutinizes them in the following manner:
Original identification Documents
4.3.2.2 CNIC/S-CNIC/Passport/Alien Registration Card/NICOP/Valid NADRA Token/POC of the Customer is seen

from both sides (where applicable) to ensure the following:
a. It has the shiny watermark of the Issuing Authority;

b. It is valid/ not expired; and
c. Photograph is of the same person
4.3.2.3 RM / CSO / Designated Officer verifies the documents for their validity and genuineness.
Examination and Completeness of Documents
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4.3.2.4 All the relevant document(s) obtained for Account Opening as per the Customer type are compared with
the original document(s) to ensure that no sign of alterations appear on them. The integrity of the
document(s) may also be verified from the issuing authority, whenever felt necessary.
4.3.2.5 It is ensured that the Account Opening documentation is complete as per the documentation requirement
for the respective Customer type. The document(s) are also cross checked to establish the integrity of the
document(s) and identify any discrepancy such as matching the address mentioned on utility bills with
the information submitted for Account Opening.
Examination of Account Opening Information
4.3.2.6 The Account Opening Documentation is thoroughly scrutinized to ensure the following:
a) All fields of the Account Opening Form are completely and correctly filled in by the prospective
Customer;
b) The Title of Account is in accordance with the Customer Type;
c) The Customer has signed/ applied thumb impressions on the document(s)
d) Form Q.A.22.
Note: As per Chapter 8, paragraph 6 of FE Manual; in the case of non-resident accounts, declaration on
Form Q.A.22 is not necessary. For Form Q.A.22, please refer Annexure B.
Other Requirements
4.3.2.7 In case of Companies’ account, the Bank sends its representative to Company’s office for obtaining
signatures of the authorized signatories on the SS cards.
4.3.2.8 In case AOF specify an account to be operated jointly, a stamp “Joint Operations” is affixed on the SS
cards.
4.3.2.9 Pre-screening of entity name/ authorized signatory (s) and of the members of governing body / board of
trustees / executive committee, if it is the ultimate governing body, is also required to be carried out.
4.3.2.10 UNSC Data and File Name and Compile List ATA Updated required.
4.3.2.11 As required by paragraph 3 of Chapter 6 of FE Manual, separate accounts are maintained by the
Authorized Dealer for foreign currency accounts under rules introduced vide FE Circular No.25 of June 20,
1998. In addition, Special Foreign Currency Accounts can be opened with the specific or general
permission of SBP.
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5. JOINT ACCOUNTS OF NON-RESIDENT WITH RESIDENTS
5.1 As per paragraph 3, Chapter 8 of FE Manual, there is no restriction on non-residents maintaining accounts
jointly with residents. These accounts should be treated as Non-Resident accounts irrespective of the fact
whether the accounts are to be operated solely or jointly by the residents.
Note: For detailed explanation of procedures carried out to open/activate Joint accounts of Non-Residents,
please refer Section 4 “Opening Non-Resident Accounts other than Banks”.
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6. SPECIAL CONVERTIBLE RUPEE ACCOUNTS
6.1 Introduction
6.1.1 In order to facilitate foreign investments into Pakistan, SBP has allowed Authorized Dealers to open
Special Convertible Rupee Accounts (SCRA) for Non-Resident Pakistani Nationals, Non-Resident Foreign
Nationals and Foreign Financial Institutions. The balance available therein can be used for purchase of
any shares quoted on the Stock Exchange of Pakistan. The funds available in such accounts can be
transferred outside Pakistan or credited to a foreign currency account of non-resident investor
maintained in Pakistan at any time without prior approvals of SBP. For Undertaking related to SCRA refer
Annexure M.
6.1.2 According to SBP FE circular 15 of 1992, the modus-operandi for operating the SCRA is as under:
a. The amount of deposits will be converted into rupees and credited to the "Special Convertible
Rupee" account of the depositor at the rate obtaining on the date of deposit.
b. The record of the Special Convertible Rupee Accounts will be kept separately.
c. The Authorized Dealer will keep the evidence of receipt of funds from abroad.
d. These accounts will be fed exclusively through the deposits received from abroad in foreign currency
and the profit earned.
e. There will be no restriction on transfer of funds from these accounts to any country abroad or to the
payment thereof in Pakistan Rupees in Pakistan as desired by the depositors.
f. Forward cover will not be allowed on these special convertible rupee accounts. The remittances
outside Pakistan will be allowed at the rate of exchange obtained at the time of remittance.
6.2 Trading of Securities
6.2.1 Para 9 (A), Chapter 20 “Securities” of the SBP FE Manual states the following guidelines regarding the
trading of Securities by Non-Resident through SCRAs:
Trading of Quoted Shares by Non-Residents.
6.2.2 Non-residents are allowed to trade freely in the shares quoted on the Stock Exchange(s) in Pakistan by
opening Special Convertible Rupee Accounts (SCRAs) with the Authorized Dealers.
6.2.3 Such accounts can be fed by remittances from abroad or by transfer from a foreign currency account
maintained by the non-resident investor in Pakistan.
6.2.4 Payment for such purchases may be debited to the account on production of stock broker's memo
showing sale of shares to the account holder and disinvestments proceeds may be credited, provided
evidence of the sale price in the shape of stock broker's memo is produced.
6.2.5 The fund available in such special accounts can be transferred outside Pakistan or credited to a foreign
currency account maintained in Pakistan at any time without prior approval of SBP. These accounts can
also be credited with dividend income.
6.2.6 Transfers from one such account to another may also be made in case of transfer of shares between the
two account-holders.
6.2.7 Non-residents are also allowed to trade in shares in Ready/Cash/Futures Markets through SCRA, subject
to the following procedure:
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a. A separate sub-account under SCRA shall be opened by foreign investors in the Branch through which
an investor will route receipts/payments, initial margin, mark-to-market settlement, transaction
charges, commission, fees etc.
b. Margins relating to Ready/Cash/Futures may also be routed through this account. However, while
allowing refund of the margin through SCRA to a non-resident, the Authorized Dealer (Branch) shall
ensure that the broker has quoted the date and instrument number under which the margin was
received by them.
6.3 Documentation Requirements
6.3.1 Non-resident investors to provide following documents along with Account Opening Form (AOF) to open
SCRA and CDC Account to the designated officer at the Branch.
Individual account
1. Request to Open a SCRA

2. Bank account opening form & signature card duly completed.
3. Account debit & credit instructions
4. Bank manager’s attested copies of CNIC (overseas Pakistani status/Passport (single or joint account)
as per requirement)
5. Bank’s reference form duly completed
6. Employment certificate/ Service card (in case of salaried person evidencing non-resident status) or
proof of self-employment (evidencing non-resident status)
7. If not employed like a house wife, (some evidence of non-resident status)
8. Power of Attorney
9. Fax indemnity
10. Zakat declaration original or attested copy if applicable. Not required in case of Foreign nationals
11. Bank manager’s attested copy of NTN certificate(optional)
12. CDC Sub Account Form duly completed.
Note:
a. (Item 8 & 9 duly attested by Embassy of Pakistan or notarized in the country of origin).
b. If POA & Fax indemnity is executed in Pakistan, then it can be notarized in Pakistan
Company’s account.
1. Request to Open a SCRA on company’s letter head

2. Bank Account Opening Form (AOF) & signature card duly completed.
a. Bank manager’s attested copies of CNIC (overseas Pakistani status/Passport) (single or joint
account as per requirement)
b. Board Resolution (with special reference to open SCRA & CDC sub account).
c. Memorandum & Articles of association / by laws/ charter/ Regulations
d. Certificate of Incorporation
e. Bank’s reference form duly completed
f. Certificate of commencement of business (if applicable)
g. If certificate of Commencement of Business is not available, a certificate from the Company
Secretary, duly authorized by the Board, that the entity started its business from certain date
and that certificate of Commencement of Business is not issued in that country.
h. Attested copy of List of Directors issued from Registrar of Companies.
i. Bank manager’s attested copy of NTN (optional)
j. Specimen signature cards of authorized signatories
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3. CDC sub account opening form duly completed.

4. Power of Attorney
5. Fax indemnity duly signed
6. Zakat declaration original of all directors or attested copies (if applicable). Not required in case of
Foreign nationals
Note:
a. (Item number 2b, 2c, 2d, 2f or 2g, 2j, 4 and 5 require attestation by Embassy of Pakistan or notarized
in the country of origin)
b. If POA & Fax indemnity is executed in Pakistan, then it can be notarized in Pakistan.
6.3.2 Documents are reviewed and approved by the BM/OM and forward it to COPC for Account Opening.
6.3.3 Designated Officer at COPC after receiving the documents reviews the same and in case of discrepancy,
intimates branches to rectify same. If the documents are in order, SCRA is opened in the system.
6.4 Special Instructions regarding shares transferred under Central Depository System (CDS) of Central
Depository Companies (CDC)
(i) General.
6.4.1 As per para 10, Chapter 20 of FE manual, separate account or sub-account will be opened & maintained at
CDC for each non-resident investor eligible for investment in registered shares/securities quoted at stock
exchange in Pakistan.
6.4.2 It must be ensured that all transactions at CDS i.e., deposit into or withdrawal from the account/sub-
account of a non-resident is supported by actual movement of funds. In other words, there should not be
any netting/adjustments and payment/receipt in respect of each purchase/sale should be settled
independent of other transactions of the non-resident. For Statement of shares/securities deposited at
CDC, refer Annexure H.
6.4.3 In case the investment by the non-resident is made/routed through his SCRA maintained with HBL, the Bank
will not allow overdrawn position in the account.
6.4.4 As per para 9(B), Chapter 20 of FE Manual, Non-residents are allowed to trade freely in Pakistan
Investment Bonds (PIBs), Treasury Bills (TBs), Registered corporate debt instruments and WAPDA’s
Registered Bonds listed with stock exchanges if the relevant S.R.Os permit non-residents to hold the bonds
in the secondary market, through SCRAs subject to the instructions applicable to these accounts as
contained in the paragraph 9 (A) of Chapter 20 of FE Manual.
(ii) Initial transfer in the name of CDC.
6.4.5 While approving the initial/first-time transfer of shares/securities purchased/held by nonresidents, in the
name of CDC for deposit into CDS, the company concerned will ensure that the shares are already registered
in its record on repatriation basis in the name of the non-resident concerned.
6.4.6 If the shares are not already so registered, the company will obtain requisite documents issued in the name
of investor concerned, i.e., broker’s memo, Proceeds Realization Certificates (PRCs) for cost of shares
purchased and transfer stamp duty, or where the shares have been purchased from another non-resident
shareholder against payment outside Pakistan, the transferee’s certificate along with PRC for transfer
stamp duty.
(iii) Subsequent transactions i.e., deposit/withdrawal at CDS.
6.4.7 Where investments are made through GDRs, the Branch concerned (maintaining SCRA) will ensure that
complete/proper record of all transactions is kept at the Authorized Dealer’s end and the prescribed
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statements of SCRAs are furnished to SBP, as at present documents involving such investment would not
be required to be submitted to the company at any stage.
6.4.8 In case of investments not involving SCRA, the original documents as mentioned in the Section 6.3.1 will be
submitted as usual to the respective company by the ‘Participant’ concerned along with a certificate that
the shares are in the name of CDS and have since been deposited into/withdrawn from the respective non-
resident’s account at CDS. The company after making necessary entry in its record to update CDC’s non-
resident holding, will furnish the same to the Bank.
6.4.9 Branch will keep these documents in its record for onward submission to SBP in the prescribed manner
along with returns pertaining to dividend/ bonus or right issue and will as usual make the remittance of
disinvestment proceeds of such shares subject to the prescribed drill/rules.
(iv) Dividend Payment/allotment of bonus or right shares.
CDC will issue to the respective company a list of beneficial non-resident shareholders certifying their
individual holding as on ex-date of dividend/bonus/right in the form appearing at Appendix V-98. Before
issue of dividend warrant or allotment of bonus/right shares, the company will verify the holding of non-
residents not involving SCRAs from its record including those as mentioned in Para 10 (iii) (b) of Chapter 20
of FE Manual and for the non-residents investing through SCRAs, it will obtain an undertaking-cum-
certificate from the relevant Branch of the Authorized Dealer (Annexure I) concerned on the form appearing
at Appendix V-99, and on the basis of this undertaking-cum-certificate it will certify Appendices V-54
(Annexure D) & V-95 (Annexure E) and V-96 (Annexure F) for such shares. The aforesaid list provided by
CDS will invariably be attached by the company to the aforesaid returns.
6.5 Reporting of Special Convertible Rupee Accounts on Account of Portfolio Investment at Stock Exchanges
6.5.1 As per para 9(A) of Chapter 20 of FE Manual, HBL shall report information on market value of foreign
investments through future trading in their weekly returns to the Statistics and Data Warehouse
Department of SBP on the revised proforma Annexure G (Appendix V-97).
6.5.2 Regulatory Reporting Department - Finance at HOK submits statements to Statistics and Data Warehouse
Department, on weekly basis based on the report received from the Branch, showing the position of SCRAs
maintained with the Authorized Dealer by non-resident investors.
6.5.3 Regulatory Reporting Department - Finance at HOK submits to SBP a statement of SCRAs on a weekly basis
on account of investments made by the Non-Residents at Pakistan Stock Exchange. The report is prepared
on SBP’s prescribed format (please refer Annexure N & Annexure O) by the branch.
6.5.4 The above information should be reported to Statistics and Data Warehouse Department, State Bank of
Pakistan through email at scra@sbp.org.pk.
Note: The excel format can also be downloaded from the following link:
http://www.sbp.org.pk/Regulatory_Returns/stats.htm
6.5.5 The commission earned by the international brokers from their overseas clients and credited net of taxes
to the broker’s SCRA account may be remitted by the Authorized Dealer provided the funds so credited
have emanated from inward remittances or paid out of SCRA of the investor.
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B. Resident
7. ACCOUNTS OF FOREIGN NATIONALS’ RESIDENT IN PAKISTAN
7.1 As per paragraph 1 of chapter 8 of FE Manual, a person shall be treated as non-resident if his/her
period of stay in Pakistan during a calendar year is less than 183 days, in aggregate. In the light
of this criterion, a foreign National may be treated as a resident if his /her period of stay is more
than 183 days in Pakistan in a year, therefore, his /her accounts may be treated as ‘Resident
Accounts’ and also those individuals who stay in Pakistan with valid work visa/permit in Pakistan
may also be allowed to open Resident PKR accounts.
7.2 Accounts of firms or companies’ resident outside Pakistan are designated as non-resident
accounts but their accounts may be treated as Resident Accounts subject to opening of their
accounts with the prior permission of Board of Investment (BOI) and branches to keep updating
their records with the valid BOI permission letters.
7.3 c) Firms, companies, etc. which are incorporated/registered outside Pakistan

7.4 As per Paragraph 2(ii) of Chapter-8 of FEM, these accounts may be opened by the Authorized
Dealers without prior approval of the State Bank. In this respect, Authorized Dealers must follow
their standard operating procedures for opening and maintaining of such accounts and ensure
compliance of all applicable AML/CFT regulations/guidelines including identification of
ultimate beneficial ownership and purpose of the account. Further, Authorized Dealers may
also collect all documents related to account opening through their overseas branches,
representative offices or banking subsidiaries abroad. In this respect, the Authorized Dealers
should ensure that the account opening forms etc. and trained staff are available at aforesaid
branches, representative offices or subsidiaries abroad. The overseas branch, representative
office or banking subsidiary, after fulfilling account opening formalities, shall forward related
documents to the head office/designated branch of the Authorized Dealer in Pakistan for further
processing.
7.5 The RM/CSO/Designated Officer has to obtain attested copies of the Passports of the persons authorized
to operate such accounts, However, prior approval of SBP is not necessary for opening such accounts.
7.6 The document(s) obtained are then filed for record purpose and for future reference.
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8. ACCOUNTS OF UNITED NATIONS AND OTHER FOREIGN ENTITIES
8.1 Introduction
8.1.1 United Nations is an intergovernmental organization tasked to promote and maintain international
cooperation order; therefore, it is to be classified under the category of Foreign Missions and International
Organizations.
Type Definition
Foreign Mission A permanent Diplomatic Mission of a foreign country in Pakistan.
International An Organization with an international membership, scope, or presence. These Organizations
Organization can be classified as:
a. International Non-Governmental Organizations (NGOs): Foreign Non-governmental
organizations (NGOs) that operate internationally.
b. International Governmental Organizations (IGOs): These are Organizations that are
made up primarily of sovereign states (referred to as member states). Notable examples
include the United Nations (UN) and its Agencies, International Monetary Fund (IMF),
International Bank for Reconstruction and Development (IBRD), Asian Development
Bank (ADB), etc.
c. Any Foreign Entity which is not covered under any other Customer type is considered as
International Organization.
8.1.2 As per Paragraph 4 of Chapter 8 account of United Nations and its Organizations should treat them as
‘Resident Accounts’. This permission is in terms of Section 5 of Article-II of the Schedule appended
to the United Nations (Privileges and Immunities) Act, 1948, the accounts of United Nations and
its organizations are free from financial controls.
8.2 Account Opening Requirement
8.2.1 It is ensured by the RM/BM/CSO that the Authorized Signatories are physically present at the Branch for
Account Opening.
8.2.2 The following document(s) are required to be obtained:
a) Request on the Letter Head of International Organization/Foreign Mission from Authorized Persons
for Account Opening, duly attested by the Counsel General;
b) Power of Attorney from the Competent Authority for opening Bank Accounts;
c) Photocopies of first four pages of Passport of Authorized Signatories;
d) Copy of the valid Visa for Pakistan;
e) Copy of Passport Pages where last entry in Pakistan is stamped;
f) Any document from Ministry of Finance, Interior, Foreign Affairs or SBP to assess the genuineness of
the Foreign Mission or International Organization allows working in Pakistan;
g) Certified True Copy of Charter/ Bye-Laws under which the International Organization is formed; and
h) Resolution/ Minutes of the Governing Body to open a Bank Account.
Note: Please refer Section 4 of this manual for detailed account opening procedure.
8.2.3 Documents are reviewed and approved by the BM/OM and forward it to COPC for Account Opening.
8.2.4 Designated Officer at COPC after receiving the documents reviews the same and in case of discrepancy,
intimates’ branches to rectify same. If the documents are in order, UNO is opened in the system.
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9. REGARDING OPENING OF FOREIGN CURRENCY ACCOUNTS WITH BANKS IN PAKISTAN
9.1 As provided in Paragraph 7, Chapter 6 of FE Manual, the Authorized Dealer may open foreign currency
accounts under FE-25 Scheme in US Dollar (USD), Pound Sterling (GBP), Euro (EUR), Japanese Yen (JPY),
Canadian Dollar (CAD), UAE Dirham (AED), Saudi Riyal (SAR), Chinese Yuan (CNY), Swiss Franc (CHF) and
Turkish Lira (TRY).
9.2 Authorized Dealers may use the interbank placements and interbank SWAPs or any other source
of foreign currency liquidity that is permitted under SBP Rules/Regulations to extend trade loans
in the above foreign currencies. However, currency of the trade loan should be the same as that
of the underlying LC/ Firm Trade Contract.
9.3 In terms of BSD Circular No. 18 dated the 31st March, 2001, Banks have been allowed to
use/invest their deposits mobilized under FE 25 for financing of Import/Exports. The Authorized
Dealers must follow the guidelines on the subject which are available at Appendix VI-3.
9.4 Branches can open Foreign Currency Accounts in all accounts mentioned under 9.1 above.
9.5 As per Paragraph 1(i), Chapter 6 of FE Manual, there are certain persons for whom the Authorized Dealer
is not required to obtain prior approval of SBP to open Foreign Currency Accounts. The list is as follows:
a) Pakistan Nationals resident in or outside Pakistan, including those having a dual nationality.
b) All foreign nationals, whether residing abroad or in Pakistan.
c) Joint Account in the names of residents and non-residents.
d) All Diplomatic Missions accredited to Pakistan, and their Diplomatic Officers.
e) All International Organizations in Pakistan.
f) Firms and companies established/incorporated and functioning in Pakistan, including those having
foreign share-holdings except as outlined in sub-para (v) below.
g) Charitable Trusts, Foundations etc. which are exempted from income tax.
h) Branches of foreign firms and companies in Pakistan.
i) Non-resident Exchange Companies even if owned by a Bank or financial institution.
j) All foreign firms/corporations, other than Banks and financial institutions owned by Banks,
incorporated and operating abroad provided these are owned by persons who are otherwise eligible
to open foreign currency accounts
k) Exchange Companies licensed by the State Bank in terms of FE Circular No. 9 dated the 30th July,
2002.
9.6 The above relaxation is not available to airlines and shipping companies operating in/through Pakistan or
collecting passage and freight in Pakistan and the Investment Bank, Leasing Companies and Modaraba
Companies including those which have been granted licenses to deal in foreign exchange.
9.7 Opening of foreign currency account as mentioned in section 9.3 is subject to the condition that these are
not fed with:
a) Any foreign exchange borrowed under any general or specific permission given by the State Bank,
unless otherwise permitted;
b) Any payment for goods exported from Pakistan;
c) proceeds of securities issued or sold to non-residents;
d) any payment received for services rendered in or from Pakistan;
e) Earnings or profits of the overseas offices or Branches of Pakistani firms and Companies including
Banks, investment of resident Pakistanis abroad; and
f) Any foreign exchange purchased from the Bank in Pakistan for any purpose.
9.8 As per paragraph 1, Chapter 6 of FE Manual, individuals/corporate bodies and legal entities are required
to comply with the following conditions for availing the facility of foreign currency accounts:
a) Corporate bodies/legal entities cannot generate funds from the Kerb market for deposit in their
foreign currency accounts;
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b) Foreign currency accounts can be fed by remittances received from abroad, foreign currency notes
and foreign exchange generated by encashment of securities issued by the Government of Pakistan.
A foreign currency account of a citizen of Pakistan resident in Pakistan can also be fed with cash
foreign currency only if the account holder is a filer as defined in Income Tax Ordinance, 2001.
c) Opening by firms/companies of foreign currency accounts, which are to be fed through the funds of
foreign equity/foreign currency loans raised for establishment of industrial and other projects and by
contractors who receive payments in foreign exchange from the employers, would be as per
procedure laid down in section 9.3 of this manual.
d) Foreign currency accounts are free from all foreign exchange restrictions. In other words, account
holders have full freedom to operate on their accounts to the extent of the balance available in the
accounts either for local payments in Rupees or for remittance to any country and for any purpose
or for withdrawals in the shape of foreign currency notes and travelers’ cheques.
e) Personal foreign currency accounts of any nature should not be used for commercial and business
purposes.
f) In case of any deposit of foreign currency notes of more than USD 10,000 (or equivalent in other
currencies) in a single day, the account holder shall be required to present the original receipt of
acquisition. The Branch shall keep on record the copy of such receipt.
g) A restriction was placed on withdrawal in foreign currency from some categories of foreign currency
accounts existing as on 28th May, 1998. The instructions issued vide FE Circular No.12 of 1998, as
amended from time to time, would continue to be operative, till the restrictions are lifted. Holders
of such accounts are, however, free to transfer their accounts from one Authorized Dealer to another.
h) Accounts can be maintained and payments (excluding local payments) made in any currency of choice
of the account holder. Credit Card facility can be obtained by the account holders to the extent of the
balances held in their respective accounts, for utilization in and outside Pakistan provided settlement
of the bills in respect of expenditure within the country is made in Rupees only and the relevant
foreign currency amount is taken by the Authorized Dealer in their daily exchange position.
i) The Authorized Dealer can mark lien on the foreign currency accounts in respect of banking facilities
like credit cards, bank guarantees and loan/credit etc. availed of by the account holders in and outside
Pakistan. The aggregate amount of the facilities availed of in and outside Pakistan should not,
however, exceed the balance in the respective accounts at any point of time and the regulations on
credit should be strictly adhered to.
Note: Branches are required to ensure that no Cash withdrawal from corporate bodies/ legal entities
accounts are allowed unless specific SBP approval is in place in this regard.
j) Regulatory Reporting Department – Finance at HOK sends to the SBP such returns in respect of these
foreign currency accounts as may be prescribed from time to time.
9.9 Special Foreign Currency Accounts of Private Power Projects.
Authorized Dealer may open the following Special Foreign Currency Accounts/Off-shore Foreign Currency
Accounts of private power projects in Pakistan as per the Implementation Agreements (IAs) entered into
with Private Power and Infrastructure Board (PPIB), Government of Pakistan. These accounts will be
maintained during the construction and operation of the projects for the following purposes subject to
the conditions mentioned against each and the balances held in such accounts will be retained by the
Authorized Dealer in addition to their Exposure Limits and will also not be required to be reported under
FE 25 Scheme:
a) Special Foreign Currency Account in or outside Pakistan.

This will be maintained for deposit of foreign equity and foreign currency loan under the Loan
Agreement registered with the State Bank. The amounts available therein will be utilized for the
purposes of the project as provided for in the IAs.
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b) Special Foreign Currency Insurance Account.

This will be maintained for depositing amounts required for payment of insurance/reinsurance
premia and for receiving insurance/reinsurance claims against covers taken in foreign currency
outside Pakistan with the approval of the Controller of Insurance or with State Bank’s approval from
an insurer in Pakistan, provided that amounts not required for meeting expenditure in foreign
exchange will be repatriated to Pakistan and converted into rupees.
c) Off-Shore Foreign Currency Control Account.
This will be maintained subject to the condition that PPIB/Independent Engineer would determine
for each project the portion of revenues required to meet the foreign currency cost for operating
the project.
d) Off-Shore Foreign Currency Operating Account.
This will be maintained subject to the condition that O&M expenses to be remitted/deposited
periodically to this account will be apportioned by the PPIB/Independent Engineer.
e) Off-Shore Disputed Payment Escrow Account.
This will be maintained subject to the condition that the balance will be remitted to Pakistan once
the dispute is over.
f) Off-Shore Foreign Currency Debt Payment Account.
This will be maintained for depositing the amount required for Debt Service.
g) Off-Shore Debt Service Reserve Account.
This will be maintained subject to the condition that this account will be liquidated simultaneously
with the retirement of debt and the maximum balance in this account would not exceed the next 12
months Debt Service Payment (both Principal and Interest).
h) Off-Shore Foreign Currency Maintenance Reserve Account.
This will be opened and maintained subject to the condition that this amount will be liquidated
simultaneously with the life of the agreement and that this account will hold the maximum of US$ 3
million during the term of Power Purchase Agreement.
i) Off-Shore Foreign Currency Dividend Account.
This will be used for receiving remittance of dividends as and when declared and paid by the
company.
• A monthly statement in the form prescribed at Appendix V-4 will be submitted electronically to
the Statistics & Data Warehouse Department of State Bank at fca.stat@sbp.org.pk by 5th of the
following month for each account separately. However, certificates from the companies’
auditors to the effect that the payments made from the accounts are strictly in accordance with
or covered under the Implementation Agreement, Power Purchase Agreement or other
agreements, if any, approved by the Government will be submitted to Exchange Policy
Department of the State Bank by FX Operations Support.
• Interest earned on balances held in these accounts will be repatriated to Pakistan.
• There will be nil balance in the Main Control Account and all other accounts after the expiry of
the relevant Agreement Period.
• Any earnings from dealing in currency/exchange should also be repatriated to Pakistan.
• Authorized Dealer will ensure that Income Tax, wherever due on payments made through the
accounts, is duly deducted and paid to the Income Tax Authorities.
Operations Manual
• Authorized Dealer may also open Special Foreign Currency Accounts of the foreign EPC
(Engineering, Procurement and Construction) and O&M (Operation and Maintenance)
contractors of the Power Projects operating in Pakistan with the approval of the Government for
receipt of foreign currency amounts under the contracts awarded to them by the Power Projects
and its utilization in accordance with the EPC/O&M contracts.
9.10 Reporting of receipts into and payments from foreign currency accounts.
Receipt of foreign currency amounts for credit to the foreign currency accounts under the Forward Cover
Scheme should be reported by the Authorized Dealer as "Purchase" on Schedule 'J' under Code 9532,
9533, 9534, 9535, 9536 in the case of accounts opened in terms of paragraph 1 , Chapter 6 of FE Manual
and under Code 9648, 9649, 9650, 9651, 9652, 9698 and 9699 in respect of accounts opened under special
permission granted by the SBP in accordance with the provisions of paragraphs 8 & 9 of Chapter 6 of FE
Manual. Similarly, payments out of the foreign currency accounts should be reported by the Authorized
Dealer as "Sale" on Schedule E-4 under Code 1522, 1523, 1524, 1525, 1526 in the former case and under
Code 1652, 1653, 1530 and 1699 in the latter case. Transactions in accounts covered by paragraph 7 of
Chapter 6 of FE Manual are also required to be reported in the summary statements (Annexure P) by the
Branch to Regulatory Reporting Department – Finance at HOK for onward submission to SBP.
9.11 Reporting of local disbursements from foreign currency accounts.
Authorized Dealer reports the payments in rupees from foreign currency accounts as "Sale" on Schedule
E-4 under Code 1522, 1523, 1524, 1525, 1526 or, 1652, 1653, 1530 and 1699 as the case may be. The
Rupee receipts should simultaneously be reported as "Purchase" on relevant schedules under a code
appropriate to the purpose of the receipt. Statements are prepared by the Branches and shared with
Regulatory Reporting Department – Finance at HOK for onward submission to SBP.
9.12 The facility of obtaining foreign currency account is provided to all types of customers of the Bank. The
procedure for opening these accounts is similar to opening local currency accounts with certain additional
requirement as laid down in the Section 4.3 of this Manual.
Operations Manual
10. FE MANUAL REQUIREMENTS
10.1 With reference to Chapter 6, Paragraph 9 of the FE Manual, Foreign Oil/ Mineral exploration companies,
foreign contractors and their foreign sub-contractors may be allowed by the Authorized Dealer to open
foreign currency accounts under the FE 25 Scheme or Special Foreign Currency Account. Opening of the
account will be subject to the condition that they will meet all their expenditure in Pakistan including
salaries of foreign nationals/non-residents in Pak Rupees only, out of rupee payments, if any, received by
them in terms of their contracts/by converting in the inter-bank market funds received from their Head
Offices/by converting funds from their foreign currency accounts in the inter-bank market.
10.2 Firms and companies raising foreign equity and foreign currency loan may be allowed by the Authorized
Dealer to open Special Foreign Currency Account for receiving and retaining the foreign funds on
submission of information about the source of foreign funding and the amount required to be retained in
foreign currency. The funds available in such foreign currency accounts can be used by the account
holders for making only those types of payments which are otherwise permissible in terms of the
instructions laid down in the FE Manual (e.g. imports, consultancy) and which are related to the business
of the account holder. Any amount not so used will be required to be converted into rupees in the inter-
bank market and no withdrawal will be allowed in the shape of foreign currency notes.
10.3 Reporting to State Bank of Pakistan
10.3.1 FX Operations Support is required to submit monthly statements in the prescribed proforma -
Appendix V-4 (please refer Annexure C) electronically to the Statistics & Data Warehouse
Department at fca.stat@sbp.org.pk by 5th of the following month for each account separately.
10.3.2 Related import documents, invoices, agreements etc. will be submitted to Exchange Policy Department
of SBP by FX Approval Unit.
Operations Manual
11. OPERATIONS ON NON-RESIDENT ACCOUNTS OF PERSONS, FIRMS AND COMPANIES OTHER THAN
BANKS
11.1 As per the Paragraph 2 of Chapter 8 of FE Manual, branches as an Authorized Dealers must follow
their standard operating procedures for opening and maintaining of such accounts and ensure
compliance of all applicable AML/CFT regulations/guidelines including identification of
ultimate beneficial ownership and purpose of the account. Further, Authorized Dealers may
also collect all documents related to account opening through our overseas branches,
representative offices or banking subsidiaries abroad. In case formalities are fulfilled through
the overseas branch, representative office or banking subsidiary, after fulfilling account opening
formalities, shall forward related documents to the head office/designated branch of the bank
in Pakistan for further processing.
11.2 Branches shall distinctively mark these accounts in their books and maintain them in a separate
ledger. Existing resident PKR accounts of Pakistanis and foreign nationals can be converted into
non-resident rupee account – non-repatriable upon confirmation of their status as non-resident.
11.3 Paragraph 6 and 7 of Chapter-8 of FE Manual has provided a list of all the purposes for which the Non-
Resident Rupee accounts (Repatriable and Non-Repatriable) respectively can be credited and debited,
therefore, it is responsibility of the Authorized Dealer to satisfy itself that the account is being used for
the purpose declared by the Customer and also ensure that the purpose is allowed under the guidelines
of FE Manual.
11.4 Following is the list of permissible debit and credit transactions prescribed in the FE Manual para 7 ,
Chapter 8:
Credits to the Non-resident Rupee Accounts - Repatriable

Non-resident rupee accounts - repatriable shall be fed with:
a) Remittances received from abroad through banking channel.
b) Funds approved/allowed for remittance abroad either by State Bank or by the Authorized
Dealers under general authority delegated, subject to applicable terms and conditions.
c) Transfer of funds from other non-resident rupee account-repatriable with the same Authorized
Dealer in Pakistan.
d) Profit/interest accrued on the amount lying in the non-resident rupee account- repatriable.
e) Proceeds of Government of Pakistan’s debt securities, term deposits and profit/interest on such
securities/certificates received on account of investments made through non-resident rupee
account-repatriable as mentioned at sub-para (iii) (f) below.
f) Refund of amounts debited incorrectly or over-charged.
Debits to the Non-resident Rupee Accounts - Repatriable
Non-resident rupee accounts- repatriable can be debited for the following purposes:
a) Any payment in PKR to the persons resident in Pakistan including utility bill payments,
education fee, hospital, insurance premium, hotel bills, travel agent’s payments etc.
through any permissible mode.
b) Settlement of import bills by non-resident importer against goods/services exported
from Pakistan.
c) Transfer of funds to other resident, non-resident rupee accounts- non-repatriable with
any Authorized Dealer in Pakistan.
d) Transfer of funds to other non-resident rupee accounts- repatriable with the same
Authorized Dealer in Pakistan.
e) Remittances and payments outside Pakistan to the extent of balances available in the
account.
Operations Manual
f) Investments in Governments of Pakistan’s debt securities (T-bills, PIBs, Sukuk and any
other registered debt security), term deposit/remunerative account with the same bank
provided such investment shall be made by the Authorized Dealers through the special
instructions received from the account holder in this behalf.
g) Debits in lieu of applicable government taxes/duties etc. bank charges and reversal of
any incorrect/wrong credit entry.
Operations on Non-resident Rupee Accounts –Non-repatriable.

All operations of non-resident rupee accounts- non-repatriable shall be governed by the
regulations set out below:
a) Authorized Dealer may issue cheque book, ATM/Debit card to the account holder.
Further, supplementary ATM/Debit cards may also be issued in the name of family
members of the account holder resident in Pakistan.
b) Funds available in these accounts shall be treated as non-repatriable and can only be
used for making payments/withdrawals etc. in Pakistan only.
c) Authorized Dealers may allow all legitimate debit and credit transactions in these
accounts as are permissible to a resident PKR accounts. However, the funds available in
these accounts cannot be used abroad through ATM/Debit cards or other Alternative
Delivery Channels.
d) Authorized Dealers may extend loan facilities for local consumption to these account
holders, subject to compliance with applicable prudential regulations.
e) The account holder may give power of attorney to a person resident in Pakistan to
operate the account.
f) Authorized Dealers may allow operations of these accounts through digital banking
which may include internet/mobile banking, etc.
g) In case above account becomes dormant due to non-operation as per the existing
regulations, it can be made operative by fulfilling usual formalities at domestic as well as
overseas branch, representative office or banking subsidiary of the Authorized Dealer.
h) Authorized Dealers will ensure ongoing monitoring of these accounts to mitigate ML/FT
risk, as in case of resident account.
Procedure for operating Private Non-Resident Rupee Account
11.5 At the end of the day, a special daily posting list is developed in the system which highlights the debit and
credit transactions in all the Non-Resident Accounts of the Branch. By reviewing the report, Designated
Personnel at the Branch ensure that all the transactions in these accounts are being timely reported to
the SBP on the prescribed formats.
Authorized Dealer may issue cheque book, ATM/Debit card to the account holder. Further,
supplementary ATM/Debit cards may also be issued in the name of family members of the
account holder resident in Pakistan. The withdrawals through ATM Cards are allowed only in Pakistan.
11.6 ATM and Supplementary Card facilities are not provided to Partnership Firms, Joint Stock Companies
(Public/Private/Listed/Unlisted) and other Customers such as Government
Organizations/Trust/NGOs/NPOs etc.
Note: Procedure for issuance of ATM and Supplementary Cards is provided in the Operations Manual of
“ATM Operations”.
11.7 Branch will ensure that payments from Private Non-resident Rupee accounts are allowed only in respect
of genuine obligations in Pakistan of the account holders while deposits represent genuine Rupee receipts
accruing to the account holders which are not intended to set off payments effected abroad. It is
Operations Manual
important to note if transactions passing through a Private Non-resident Rupee account are subsequently
found to have been used for compensatory deals, the Authorized Dealer will be held responsible.
11.8 In case of slightest doubt, a reference shall be made to the SBP for advice by the competent authorities
in the Authorized Dealer.
Operations Manual
12. OPERATIONS ON NON-RESIDENT BANK ACCOUNTS
12.1 Introduction
12.1.1 Paragraph 3, Chapter 7 of FE Manual permits drawings from Non-resident Rupee accounts of overseas
Banks by their Branches and correspondents located in any other country irrespective of their monetary
area.
12.2 Transfer to the Credit of Non-Resident Bank Accounts
12.2.1 As per Paragraph 4, Chapter 7 of FE Manual, any payment for credit to non-resident Rupee account of any
Bank's overseas Branch or correspondent constitutes an outward remittance and is equivalent to a sale of
the appropriate foreign currency. Such payments may be made by the Branch k against approved
transactions covered by 'T-1', 'I' or 'M' forms approved by the SBP or by the Authorized Dealer on behalf of
the SBP as permissible.
12.2.2 The procedure for outward fund transfer is followed at Branches for crediting funds to Non Resident Bank
Account.
Note: For detailed Outward Remittance process, please refer FE Remittances Manual.
12.3 Transfer to the Debit of Non Resident Bank Accounts
12.3.1 Paragraph 5, Chapter 7 of FE Manual, states that the payment in Rupees to the debit of Non-resident Rupee
accounts of Banks' overseas Branches and correspondents constitutes an inward remittance and is
equivalent to purchase of the appropriate foreign currency. Such payments may be made freely by the
Authorized Dealer.
12.4 Transfer between the Accounts of Non Resident Bank Branches or Correspondents
12.4.1 As per Paragraph 6, Chapter 7 of FE Manual, transfers between non-resident Bank accounts may be freely
allowed by the Authorized Dealer irrespective of their monetary area.
12.4.2 In respect of such transfers credits should be covered by Form 'M' in which the name and address of the
Authorized Dealer whose account is debited and HBL are mentioned. The form may be approved by the
Authorized Dealer on behalf of the SBP.
12.4.3 No form is required to be completed covering debits, details of which should be reported to the SBP-Banking
Services Corporation (BSC).
Operations Manual
13. RESPONSIBILITY OF THE BANK REGARDING IRREGULAR OPERATIONS ON ACCOUNTS
13.1 As per paragraph 6 and 7, Chapter 8 of FE Manual branches must ensure to process transactions in both
categories of Non-Resident Rupees Accounts(Repatriable and Non-Repatriable) in line with nature of
transactions permitted under these two paras. It shall be the responsibility of the concerned personnel of
the branch /bank, in the event of any such irregularity detected by them, to bring it to the notice of SBP-
BSC immediately.
13.2 For reporting any such suspicious transaction, the concerned personnel will generate Suspicious
Transaction Reports (STR), which are sent to SBP on a regular basis for timely and appropriate action.
Operations Manual
14. ACCEPTANCE OF DEPOSITS FROM FOREIGN BANKS OPERATING ABROAD AND OVERSEAS BRANCHES
14.1 Overview
14.1.1 With reference to Chapter 6, Paragraph 5 of FE Manual, an exception to the rules set out in
Section 9.3 (j); HBL can accept foreign currency deposits from its overseas Branches and foreign
banks operating abroad, including financial institutions owned by them, provided the amount
and period of maturity of such deposits is not less than those prescribed from time to time.
Interest on these foreign currency deposits are paid by the Bank annually, six monthly or
quarterly in accordance with the option exercised by the depositor in writing at the time of
placement of deposits.
14.1.2 Interest rate shall not exceed the prescribed margins over Bid rate for the respective period as
provided by the British Bankers Association (BBA) at the close of business on the working day
immediately preceding the date of deposit as published by the Foreign Exchange Rates
Committee.
14.2 Procedure of Payments in IFI Accounts
14.2.1 Financial Institutions (IFIs and DFIs) maintaining accounts with the Bank are required to maintain
adequate credit balances (through account replenishment) in Vostro / Rupee Drawing Accounts (RDAs),
as the case may be, in order to meet their drawing requirements.
14.2.2 The instructions are sent in the form of SWIFT Messages at SWIFT Operations code “HABBPKKAxxx” or
CRD SWIFT code “HABBPKKA007” by the Correspondent FI requesting the transaction. The following
Messages are received from Correspondent FIs for payment and receipt:
a. MT 103 - Single Customer Credit Transfer
b. MT 110 - Advice for Cheque(s)
14.2.3 The MTs are then forwarded to OM against acknowledgement to the above-mentioned departments
which have received the SWIFT Messages.
Note: For further Details, please refer Section 5 of Account Operations FI Manual.
Operations Manual
15. REPORTING OF LOCAL DISBURSEMENTS FROM FOREIGN CURRENCY ACCOUNTS
15.1 With reference to Paragraph 11, Chapter 6 of FE Manual the Bank is required to report the payments in
rupees from foreign currency accounts as "Sale" on Schedule E-4 under Code 1522, 1523, 1524, 1525,
1526 or 1647, 1652, 1653 as the case may be.
15.2 The Rupee receipts should simultaneously be reported as "Purchase" on relevant schedules by the Branch
under a code appropriate to the purpose of the receipt.
Code Purpose Description

Foreign currency accounts of Withdrawal made for any purpose from Foreign Currency Accounts
1522
resident individuals opened by individual Pakistani residents with banks in Pakistan.
1523
residents- General government opened by Public Sector enterprises with banks in Pakistan.
1524
resident enterprises opened by Private Sector enterprises with banks in Pakistan.
Foreign currency accounts of non- Withdrawal made for any purpose from Foreign Currency Accounts
1525
residents opened by non-residents with banks in Pakistan.
Foreign currency accounts – Repayments of Certificate of Investment (COI) mobilized under
1526
NBFI’s Foreign Currency Accounts.
Payments made from foreign currency accounts opened under
Foreign currency accounts under
1647 special permission granted to Pakistani companies / firms
special permission
excluding payments made under foreign currency accounts.
1652 Qarz – e – Hasna Repayment on account of Qarz - e –Hasna
Remittances on account of repayment of principal only under PAYE
1653 Repayment under ‘PAYE’
Scheme. This does not include interest on such credits.
Operations Manual
16. REPORTING OF INTEREST ON FOREIGN CURRENCY ACCOUNTS
Paragraph 12, Chapter 6 of the FE Manual requires that interest paid by the Bank on Foreign Currency
Accounts shall report as "Sale" on Schedule E-4 of the monthly foreign exchange returns under Code 1431
(interest paid on foreign currency accounts). The receipts should simultaneously be reported by the
Branch as "Deposits" in FCA on relevant schedules under an appropriate code.
Operations Manual
17. MAINTENANCE OF RECORD OF FOREIGN CURRENCY TRANSACTIONS AND REPORTING TO THE STATE
BANK OF PAKISTAN
17.1 According to Paragraph 12A, Chapter 6, of the FE Manual, the Bank is required to maintain consolidated
data/record of transactions routed through foreign currency accounts of individuals/entities at the head
office on monthly basis, in addition to the data/record already being maintained, in the following manner:
i) Data of those personal foreign currency accounts maintained by individuals where aggregate amount
exceeding US $ 10,000 or its equivalent in other foreign currencies is deposited in/ withdrawn from/
remitted out from the account during the month as per format Annexure VI-4 (Annexure K).
ii) Data of foreign currency accounts maintained by entities where aggregate amount exceeding US $
25,000 or its equivalent in other foreign currencies is deposited in/ withdrawn from/ remitted out
from the account during the month as per the format Annexure VI-4.
17.2 Regulatory Reporting Department – FX Approval Unit at HOK is required to report data related to foreign
currency accounts (deposits, utilization and borrowings, etc.) through various statements to SBP
electronically through the Data File Structure (DFS) available at Appendix VI-5 (Annexure L) latest by 7th
of the following month for each reference month.
Operations Manual
18. PAYMENTS OF FOREIGN NATIONALS IN FOREIGN CURRENCIES
18.1 Paragraph 13, Chapter 6 of FE Manual prohibits the payments in foreign currency by foreign nationals
residing in Pakistan to or on behalf of residents of Pakistan whether Pakistanis or foreign nationals.
18.2 Foreign nationals should not, therefore, directly or indirectly, make foreign currency available to the
residents or to other persons on their behalf against payment in Rupees. Such payments are prohibited
even from their foreign currency accounts which they are permitted to maintain and operate from
Pakistan.
Operations Manual
19. FOREIGN EXCHANGE RECEIVED IN RESIDENTS IN PAKISTAN
In Chapter 6, Paragraph 14 of FE Manual 2018 issued by the State Bank of Pakistan, payments in foreign
exchange received by the Bank on behalf of a resident in Pakistan must not be retained in foreign
exchange but must be converted into Rupees, unless the State Bank has given general or special
permission to the beneficiary to retain the foreign exchange received by him.
Operations Manual
20. ADDENDUM
Standard Operating Procedures (SOPs) in Chapter 9 (Blocked Accounts) of the FE Manual 2018 issued by
State Bank of Pakistan are not carried out at the Bank therefore such SOPs are made part of the
Addendum. These SOPs would be included in this Manual on receiving any further guidance from the
State Bank of Pakistan.
1) Powers of the State Bank to block Non-Resident Accounts
Section 6 of the Act confers powers on the State Bank to block accounts in Pakistan of any person resident
outside Pakistan and to direct that payment of any sums due to a nonresident may be made only to such
a blocked account.
2) Definition of Blocked Account
A blocked account means an account opened as a blocked account at any Branch or office in Pakistan of
a Bank authorized in this behalf by the State Bank or an account blocked by the order of the State Bank.
3) Banks authorized to maintain Blocked Accounts
The Bank in foreign exchange are permitted to maintain blocked accounts subject to the conditions laid
down in this chapter. In certain cases, Banks other than Bank in foreign exchange may be authorized by
the State Bank to maintain blocked accounts
4) Opening of Blocked Accounts
A blocked account may not be opened in the name of a resident of Pakistan unless it is held jointly with
a non-resident. No blocked account may be opened by the Bank or an existing 'free' account blocked
except under directions from the State Bank.
5) Payment to Blocked Account deemed as a good Discharge
Sub-section (1) (b) of Section 6 of the Act provides that where the State Bank has directed that any
payment due to a non-resident may be made to a blocked account in his name with a Bank in Pakistan,
the crediting of the sum to the blocked account shall, to the extent of the sum credited, be a good
discharge to the person making the payment.
6) Items payable to Blocked Accounts
The State Bank may not approve certain remittances in settlement of liabilities to nonresidents under the
current Foreign Exchange Regulations. Payments in discharge of such liabilities to non-residents can only
be allowed to be made to blocked accounts. Amounts due to a Pakistani who has emigrated to another
country and all amounts due to a resident of India will be allowed to be paid only into a blocked account
of the beneficiary.
7) Procedure regarding Payments to Blocked Accounts
Where State Bank directs that a payment be made to a blocked account only, it may be made either:
(i) By a Banker's payment order marked 'payable to blocked account of __________ only' or
(ii) By a crossed cheque or warrant drawn in favour of the beneficiary and marked with the words
"Payable to blocked account of payee only." Where such a cheque or warrant is sent to a nonresident,
it is desirable that the payee should arrange for the opening of a blocked account with the Bank
before forwarding the cheque to that Bank for collection. 'Form A-7' with the name of the payee as
the transferee and clearly marked 'Blocked Account' must be submitted to the State Bank for prior
approval. The collecting Bank must endorse cheques, warrants or drafts so marked “received for the
credit of blocked account at ………… (Bank and Branch)" before presenting them for payment. The
Operations Manual
paying Bank may not pay such instruments, unless they are properly marked and unless Form A-7 has
been approved by the State Bank for payment to a blocked account. After payment has been made
it must endorse the form on the back “Payment made to blocked account at ……… (Bank and Branch)".
The amount which the State Bank has directed to be placed to a blocked account, must be
immobilized pending the opening of the account and may not be used for any other purpose except
with the prior approval of the State Bank.
8) Pakistani Emigrants-Blocking of Accounts
Bank accounts and securities belonging to Pakistan and foreign nationals residing permanently in
Pakistan, who emigrate to foreign countries, should be treated as blocked. For blocking the accounts and
securities of intending emigrants the State Bank will issue necessary instructions to their Bankers.
Sometimes Pakistan nationals who had gone abroad for purposes other than 'Migration', take up
permanent residence in a foreign country. As and when such cases of its clients come to the knowledge
of the Bank, it will be its responsibility to report them to the State Bank for instructions as to whether or
not the Bank account/securities of the person concerned should be blocked. In such cases pending receipt
of instructions from the State Bank, the securities should be immobilized and no operation on the Bank
account should be allowed without its prior approval.
9) Operations on Blocked Accounts.
The State Bank may issue special instructions regarding operations on individual blocked accounts. In the
absence of any such special instructions, no payments into or withdrawal from blocked accounts may be
made unless prior approval of the State Bank has been obtained.
10) Use of Blocked Account
Balances held in blocked accounts may be invested in "approved securities" expressed to be payable in
Rupees or in fixed deposit with the Bank in which the account is held subject to the prior approval of the
State Bank. Shares or securities in which investment is permitted by the State Bank must be bought
through the Bank with whom the blocked account is kept and registered in the name of the account
holder, the address being his permanent residential address outside Pakistan. Alternatively, securities so
purchased may be registered in the names of the Banks keeping the blocked accounts or their nominees
in Pakistan. The securities should not be held in bearer form and should not be sold or transferred without
the permission of the State Bank.
Operations Manual
Record Retention Template
Document Classification Retention Period

Regulatory Storage Media
S. No. Document Name (Permanent/ Critical/ Non- Perpetual/(Critical 5+5)
(Yes/No) (Phy sical/Sy stem/Both)
Critical) /Non Critical (3 Years)
Account Opening Form Perm anent Yes Phy sical 5+ 5

1
S.S. Card Perm anent Yes Both 5+ 5

2
Operations Manual
References of Documents Used
Document
S. No Date Subject
Reference
Anti-Money Laundering and Combating the Financing of Terrorism
1 16-Apr-13 P/INST/3511
Regulations
2 10-Sep-13 P/INST/3560 Bulk Account Opening Process for HBL At Work Accounts
3 27-Apr-14 P/INST/3691 Accounts of US Persons-FATCA Regulations
4 27-Jun-14 P/INST/3691 Introduction of FATCA
5 28-Jun-14 A/INST/596 Introduction of FATCA for overseas Branches
HBL ID Accounts to be opened through Bulk Account Opening
6 4-Jul-14 P/INST/3699
Module
Master Circular Guidelines Under FATCA Regulations for Individual
7 13-Apr-15 P/INST/3801
and Entities Customer
8 9-Jun-15 P/INST/3843 AML - CFT Regulations - Opening and Operations of Bank Account
9 1-Dec-15 P/INST/3950 Enhanced KYC - Risk Based
Enhanced CDD Measures and Elevated Approval & Monitoring
10 3-Dec-15 P/INST//3956
Process for High Risk Areas
Provision of Biometric Verification Before Account Opening at
11 1-Jun-16 P/INST//103
Selected Branches
12 15-Jul-16 P/INST//135 Revised Bulk Account Operations
13 31-Aug-16 P/INST//163 Provision of Biometric Verification Before Account Opening
14 1-Nov-16 P/INST//194 Modifications to Enhanced KYC Module (EKYC) on MISYS
Enhancement in Bulk Account Opening Process for Resident Foreign
15 14-Dec-16 P/INST//213
National
16 30-Jun-17 P/INST//132 Implementation of Common Reporting Standard Rules in Pakistan
17 4-Jul-17 P/INST//137 Implementation of Key Fact Sheets at the Time of Account Opening
Successful Implementation of Biometric Verification in HBL
18 29-Sep-17 P/INST//172
Branches
Guidelines on Compliance of GOP Notifications Issued Under UNSC
19 3-Oct-17 P/INST//178
Resolutions
Operations Manual
Amendment Recording Sheet
S. No. Circular Number Date Subject Effective Date

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FE Account Operations

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FOREIGN EXCHANGE -

Branch Operations & Account Services

Account Operations – Foreign Exchange

1.1 Objectives & Scope

1.2 Type of FE Accounts

Based on SBP Guidelines, FE accounts can be categorized into the following:

As per Chapter-8 of Fem-2021, Accounts of individuals, firms or companies’ resident outside

a) Non-Resident Pakistanis (NRPs)

a) Non-Resident Rupee Account-Repatriable (NRAR)

b) Non-Resident Rupee Account-Non-repatriable (NRAN)

c) NRP Rupee Value Account (NRVA) for non-resident Pakistan only.

2. FOREIGN CURRENCY ACCOUNTS

2.2 Foreign Currency Deposit Schemes

a. Foreign Currency Accounts under FE-25 scheme

2.3 Special Foreign Currency Account

Foreign Currency Account of Private Power Projects

Foreign Currency Account of Foreign Oil/Mineral Exploration Companies and Foreign

2.3.7 Special Foreign Exchange Regulations for Special Technology Zones.

i. Payment of commission/discount to the overseas agents/buyers;

v. Subscription fee for participation in foreign exhibitions, fairs for promotion/marketing of

2.3.9 Foreign Currency Value Account (FCVA)

Branches may open ‘Foreign Currency Value Account (FCVA)’ of following:

a) A non-resident individual Pakistani

2.3.10 Foreign Currency Accounts of Public Sector Entities (PSEs):

As per FE Circulars No EPD/11618/EPP.16(37) Misc.2016 dated May 06,2016, and No

2.4 ‘Deposits and Withdrawals

Operations on Foreign Currency Accounts under FE-12 Scheme

a. Diplomatic Missions accredited to Pakistan;

b. All International Organizations in Pakistan viz. International Monetary Fund (IMF),

c. Non-Resident Employees of IMF, IBRD and ADB;

2.5 Convertible and Non-Convertible Rupee Accounts

Following areas are covered in this section:

a) Non- Resident Accounts;

This category includes the following accounts:

a) Opening of New Non-Resident Accounts of Persons other than Banks

4. OPENING OF NEW NON-RESIDENT ACCOUNTS OF PERSONS OTHER THAN BANKS

4.1.2 A) Non-resident Rupee Accounts – Repatriable

B) Non-resident Rupee Accounts- Non-Repatriable

a) The accounts of persons who hold office abroad in service of Pakistan;

a) Non-resident accounts of Pakistani Nationals; and

4.1.5 Account Opening Requirements

4.2 Documentation Requirement

Note: a. For FATCA related requirements, please refer Annexure U

4.3 Procedure for Account Opening through MISYS

4.3.1 Welcoming Prospective Customers

4.3.2 Scrutiny of Documentation and Information

Original identification Documents

4.3.2.2 CNIC/S-CNIC/Passport/Alien Registration Card/NICOP/Valid NADRA Token/POC of the Customer is seen

a. It has the shiny watermark of the Issuing Authority;

Examination and Completeness of Documents

Examination of Account Opening Information

5. JOINT ACCOUNTS OF NON-RESIDENT WITH RESIDENTS

6. SPECIAL CONVERTIBLE RUPEE ACCOUNTS

6.2 Trading of Securities

Trading of Quoted Shares by Non-Residents.

6.3 Documentation Requirements

1. Request to Open a SCRA

1. Request to Open a SCRA on company’s letter head

3. CDC sub account opening form duly completed.

(ii) Initial transfer in the name of CDC.

(iii) Subsequent transactions i.e., deposit/withdrawal at CDS.

(iv) Dividend Payment/allotment of bonus or right shares.

7. ACCOUNTS OF FOREIGN NATIONALS’ RESIDENT IN PAKISTAN

7.3 c) Firms, companies, etc. which are incorporated/registered outside Pakistan