For business information, annual reports, laws, ordinances, regulations and articles.

	Web Paksearch.com

Cont. 1 of 2

CHAPTER XXII
RETURNS OF ALL FOREIGN EXCHANGE TRANSACTIONS

(Foreign Exchange Returns - Coding System)

1. Maintenance of Record.
Authorised Dealers should maintain proper record of all dealings in foreign exchange in their books including transactions on non-resident accounts.

2. Submission of Returns to State Bank.
Authorised Dealers should take utmost care in compilation of various returns/statements prescribed in this as also other chapters so that all transactions are correctly and duly reported. They should also ensure that these returns/statements are invariably sent to the State Bank on due dates.

3. Basis and Procedure for Reporting of Transactions.
The system of reporting transactions is designed to compile figures on the basis of actual entries in the currency accounts so that there are no suspense items. Authorised Dealers should report transactions as per following procedure:
(i) EXPORTS
a) Export bills drawn under irrevocable letters of credit.
Transactions in respect of export bills negotiated by Authorised Dealers should be reported as purchases only at the time entries are made in the currency account duly supported by Schedule 'A' and Forms 'E'.
b) Export bills drawn on collection basis.

Sometimes Authorised Dealers also purchase export bills drawn on collection basis. Transactions relating to such export bills should be reported as an outright purchase against "Exports" in the summary statement after the transaction is put through the currency account on receipt of advice of realisation of the export proceeds.

(ii) OTHER RECEIPTS
The procedure indicated in sub-paragraph (i) (a) above should also be followed with regard to D.Ds. and M. Ts. etc. In other words, purchases in respect of D.Ds. and M.Ts. etc., should be reported only when the transactions are put through the currency accounts.

(iii) IMPORTS
a) In case of import bills drawn under letters of credit, the foreign currency accounts of the Authorised Dealers are debited at the time of negotiation of documents by their foreign correspondents. Accordingly, sales on account of import bills drawn under confirmed and irrevocable letters of credit should be reported when the transaction is put through the currency account on receipt of import documents and not on the basis of retirement of bills by the importers.

b) All sales on account of imports are required to be supported by the original copy of the Form ‘I’. In view of the time-lag between the date of receipt of the import bills and the date of their retirement by the importers, it may not be possible to submit original copy of Form ‘I’ duly signed by the importers. In such cases, Authorised Dealers should fill in the quadruplicate copy of the Form ‘I’ and submit it alongwith the relevant schedule and the summary statement. The original copy of the Form ‘I’ should be submitted after it has been signed by the importer, which will be at the time of retirement of the bill.

c) Authorised Dealers will forward to the State Bank a monthly statement showing particulars of the Form ‘I’originals of which have not been sent by them to the State Bank, giving reasons for their non-submission. These statements should reach the State Bank by the 7th of the following month and should bear running serial numbers.

d) With regard to import bills received on collection basis, the transactions will be reported on Schedule E-2 supported by original Form ‘I’.

(iv) OTHER PAYMENTS
Transactions relating to D.Ds. and M.Ts. issued by the Authorised Dealers should also be reported only at the time entries are made in the currency accounts.

Non-resident Rupee accounts of foreign banks and correspondents including barter accounts should also be reported by Authorised Dealers in the manner indicated in this para.

4. Coding of Transactions.
Authorised Dealers are required to give code numbers for all transactions pertaining to receipts as well as payments whether under cash, loan, credits or barter on the relevant prescribed forms as also in the columns provided in the relevant schedules, excepting stubs given on the right hand top of the schedules relating to "Period", "Authorised Dealer" and "Currency" whose coding is done in the State Bank.
Separate code lists are provided for the following items:

For entering code numbers on various schedules, the code lists mentioned below against each schedule should be referred to:

The stubs earmarked for 'Department' are to be used in cases of transactions relating to imports and invisible payments. All payments by Government and Semi-Government agencies out of cash resources should be correctly co-related with those given in Code-8 and code number given accordingly. Where payments for imports or invisibles are made by private parties out of cash resources, the Code No.501 of Code-8 will be given under 'Department'.

Authorised Dealers should ensure that the description of transactions given in the relevant forms conforms to the nomenclature given in the Code Lists. Coding should be done with extreme care. It is advisable to entrust the Coding work to experienced and responsible members of the staff. To guard against any possible misclassification, coding should be got checked independently. For all amounts equivalent to Rs. 1 Lac and above, the checking of codes should be done by supervisory staff.

5. Returns of Foreign Exchange Transactions.
Authorised Dealers should report to the State Bank particulars of foreign exchange transactions effected by them i.e. all outward and inward remittances made whether through their accounts in foreign currencies or through the Rupee accounts of non-resident banks. For this purpose, Authorised Dealers should submit to the State Bank a summarized statement of their transactions in each currency in which a position is maintained by them and also summary statement of transactions effected on the Rupee accounts of non-resident banks maintained with them for each month, reaching the respective area office of the Exchange Policy Department by the 3rd of the following month from branches and by the 10th from Head/Principal Offices of Authorised Dealers.

These summary statements should be submitted on:
"S-1" statement for transactions in all foreign currencies (Appendix V- 100).
"S-4" statement for transactions on Rupee accounts of non-resident banks (Appendix V- 101).
"S-5" statement for transactions under Rupee barter (Appendix V- 102).
"S-6" statement for transactions in foreign currency notes (Appendix V-  103).

6. Compilation of Summary Statements.
i) Each summarized statement will be an abstract of the Authorised Dealer's ledger account and will consist of totals under specified heads. Opening and Closing balances should be added making each summary a complete and balanced statement.

ii) Authorised Dealers will complete one "S-4" statement for each period in which consolidated figures of all non-resident bank accounts maintained with them will be given. It will not be necessary to complete a separate "S-4" statement for each non-resident bank account.

iii) Statement "S-6" is to be submitted in duplicate.

7 Supporting Schedules and Forms of the Summary Statements.
To support the details of the totals entered in the summarized statements, every statement must be accompanied by schedules and the relative forms as indicated in the summarized statements. The schedules should be compiled as under:

RECEIPTS & PAYMENTS SCHEDULES
Schedules "A-1", "A-2", "A-3", "J", "E-2", "E-3" and "E-4" are given combined heading as follows:

Combined headings have been provided to facilitate preparation of Schedules 'O' & 'P' in respect
of transactions of branches, which do not maintain independent currency positions, but operate on the foreign currency accounts of the Head/Principal Office/another branch and themselves submit unbalanced Summary Statements "S-1" and "S-4" to their area offices of the Exchange Policy Department. The procedure for preparation of these schedules by the branches, which do not maintain independent currency positions is given subsequently in this para.

SCHEDULES "A-1", "A-2" and "A-3" (APPENDICES V- 104, V- 105 and V- 106):

Purchase of foreign currencies or debits to non-resident bank Rupee accounts covering proceeds of exports from Pakistan will be listed on Schedules "A-1", "A-2" and "A-3" as follows:

SCHEDULE "A-1": In cases where Form 'E' is certified against a purchase of foreign currencies or debit to non-resident Rupee account, the transaction must be listed on a relative Schedule "A-1" in triplicate showing the number of the Form 'E' and the amount.

SCHEDULE "A-2": In cases where no Form 'E' is certified at the time of purchase of foreign currency or debit to non-resident Rupee account, the particulars will be listed on Schedule "A-2" in triplicate. Such cases will fall into two categories:
i)  Advance payments for goods to be exported.
ii)  Part realisation where the triplicate of the Form 'E'' will be lodged with the State Bank at the time when final proceeds are received.
If an advance payment is received for an export, the Authorised Dealer must make out an "Advance Payment Voucher" (Appendix V-18). When the Form 'E' is ultimately made out and a deduction shown for the advance payment, the date of the "Advance Payment Voucher" must be stated on the Form 'E'.

When proceeds of exports are received and the Form 'E' is not available or in case of part realisation, a voucher "Export Receipts: Form 'E' not attached" (Appendix V- 111) must be completed.

"Advance Payment" and "Export Receipts: Form 'E' not attached" voucher must be listed on Schedule "A-2".

SCHEDULE "A-3": In cases where 'E' Form is certified against purchase of foreign currencies or debit to non-resident Rupee account for re-export of imported goods the transaction will be listed on Schedule A-3 in triplicate.

Totals of Schedules  "A-1", "A-2" and "A-3" must be cast and the total of  "A-2" and "A-3" brought forward to "A-1" and grand total shown on "A-1" which must agree with the amount entered on  the summary statement. Even in cases where there are no certified Forms 'E' to be submitted with the return, an "A-1" Schedule should be completed showing a nil figure and giving the total figure of "A-2", making up the grand total on "A-1".

For every item on Schedules "A-1", "A-2" and "A-3" a certified copy of Forms 'E' or a voucher, as applicable, must be enclosed. Conversely, for every voucher or Forms 'E' enclosed, there must be an item on the appropriate schedule. No Forms 'E' should be enclosed with the returns against which no receipt is being reported on the return. The forms and vouchers must be sorted in the order they are listed. If more than one schedule sheet is used, the sheets must be serially numbered and pinned together.

While reporting export receipts, separate schedules ( "A-1", "A-2" and "A-3") should be prepared for receipts on account of exporters residing in the jurisdiction of area offices of the Exchange  Policy Department other than the area office to which the 'Returns' are being submitted. Such schedules should be prepared area-wise with one additional copy. The name of the area  office to which the schedules pertain should be prominently written on the top thereof. Separate Schedules  "A-1", "A-2" and "A-3" must be attached to the summary statement relating to each currency. It is not permitted, for example, to enter the Forms 'E' in U.S. dollars and Pound Sterling on the same summary statement.

	Web Paksearch.com

Home | About Us | Contact | Information Resources