SBP enhances oversight on foreign currency accounts
The State Bank of Pakistan (SBP) has issued a directive to all banks,
mandating detailed submissions of transactions conducted through foreign
currency accounts (FCA) to enhance transparency and accuracy in financial
reporting, particularly for international transactions.
In a circular to all banks, the SBP referenced its Exchange Policy
Department’s Circular Letter No. 14, dated December 7, 2016. This letter
required banks maintaining Special Purpose Foreign Currency Accounts, both
onshore and offshore, to submit a monthly statement to the Core Statistics
Department (CSD) of the State Bank by the 5th of the following month. The
statement must include data in formats A to E as specified in the original
circular.
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To clarify and classify certain international transactions—such as trade in
services, debt amortization, and trade credits—the SBP has revised the code
list for Statement A. This updated code list pertains specifically to Special
Purpose Foreign Currency Accounts (Onshore/Offshore) and is now available on
the SBP Data Acquisition Portal (DAP) Knowledge Centre.
Starting with data for July 2024, banks must submit reports on Special
Purpose Foreign Currency Accounts using the revised code list for Statement A and
the existing formats for Statements B to E through the DAP, replacing the
previous email submission method. This change aims to streamline the reporting
process and improve data submission efficiency and accuracy.
The SBP emphasized that reporting institutions must develop mechanisms to
verify data accuracy before submission. This verification is crucial to ensure
compliance with SBP guidelines, with the central bank warning that any
erroneous reporting would lead to punitive action under the relevant legal
provisions.
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This directive is part of the SBP’s ongoing efforts to strengthen Pakistan’s
financial system by ensuring accurate recording and reporting of all
international transactions. The initiative aims to provide better insights into
the flow of foreign currency in and out of the country, aiding in more
effective economic planning and policy-making.
Banks are now under pressure to enhance their reporting mechanisms and
strictly adhere to the new guidelines. This initiative is expected to foster
greater accountability and transparency within the banking sector, contributing
to the stability and integrity of Pakistan’s financial system.
Source: pkrevenue.com