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CHAPTER
VIII
PRIVATE NON-RESIDENT RUPEE ACCOUNTS
1. General.
(i) Accounts of individuals, firms or companies
resident in countries outside Pakistan are designated as non-resident accounts. Also under
the State Bank's Notification No.FE1/63-SB dated the 14th
October, 1963 issued in pursuance of Section 20(I) (a) of the Act, all nationals of
Pakistan and persons domiciled in Pakistan except persons holding office in the service of
Pakistan, who go out of Pakistan for any purpose viz., employment, study, business tour,
pleasure trip etc., are treated as non-resident for the purpose of Section 5 of the Act,
for so long as they remain outside Pakistan. Accordingly their accounts are also treated
as non-resident accounts. All such accounts are regarded for the purpose of Foreign
Exchange regulations as accounts of countries in which the account holder is residing.
(ii) Non-resident accounts can, therefore, be grouped in the following categories:
(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.
(iii) Authorised Dealers should mark the accounts of all non-resident persons, firms or
companies in their books as non-resident accounts and also indicate clearly the country of
their residence. All non-resident accounts should be maintained in a separate ledger.
Similarly new non-resident accounts, as also those designated as non-resident accounts
consequent upon the account holders being out of Pakistan, will be maintained in the
Non-resident Accounts ledger. As and when non-resident accounts are re-designated as
resident accounts, the same should be taken out of the Non-resident Accounts ledger.
(iv) Non-resident accounts of the categories mentioned in sub-para (ii) shall be treated
as resident on account holder's permanent return or his temporary visit to Pakistan for
which permission of the State Bank is not necessary and there shall be no restriction on
the account holders' operating these accounts so long as such account holders are resident
in Pakistan.
(v) Where any doubt exists whether any account is to be treated as non-resident, an
immediate reference should be made to the State Bank for a decision giving full
particulars.
(vi) Authorised Dealers may transfer amounts to and from such accounts only in accordance
with the regulations laid down in this chapter.
2. Accounts of United Nations and its
Organizations.
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. Authorised Dealers should, therefore, treat such
accounts maintained with them as "Resident Accounts".
3. Joint Accounts of Residents and
Non-Residents.
There is no bar 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.
4. Opening of New Non-Resident Accounts of
Persons other than Banks.
New non-resident accounts in the names of persons or firms or companies other than banks
may be opened without the prior approval of the State Bank where accounts are to be opened
with funds received from abroad through banking channel or with Rupee funds which have
been accepted by the State Bank for remittance abroad. Reference of the Monthly Exchange
Returns or the State Bank approval number, as the case may be, should be quoted in the
relevant form A-7 covering the credit.
5. Accounts of Foreign Nationals Resident in
Pakistan – Form “Q.A.22”.
The accounts of all foreign nationals who are resident in Pakistan and the accounts of
companies or firms (other than banks) whose head offices or controlling interests are
outside Pakistan but the accounts are operated on by persons in Pakistan may be treated as
resident accounts. The account holders or persons in Pakistan authorised to operate on
such accounts must sign form "Q.A.22" (Appendix V-6). Form "Q.A.22"
should be obtained by the Authorised Dealers in duplicate and a copy thereof forwarded to
the State Bank for record as and when the account is opened. Prior approval of the State
Bank for opening such accounts is not necessary. However, in cases where such accounts are
desired to be opened with a bank which is not an Authorised Dealer, prior approval of the
State Bank will be necessary. Form "Q.A.22" is an undertaking that the signatory
will not provide any foreign currency against reimbursement in Rupees and that any
transaction on the account not directly connected with the signatory's business in
Pakistan will be reported to the State Bank on form A-7. Declaration on form
"Q.A.22" should not be taken from members of foreign embassies, legations,
consulates and accredited representatives of foreign governments in Pakistan.
6. Form “Q.A.22” not required from
Non-Residents.
In the case of non-resident accounts, declaration on form "Q.A.22" is not
necessary.
7. Responsibility of Authorised Dealers
regarding irregular Operations on Accounts.
Notwithstanding the fact that a constituent has signed form "Q.A.22" the
Authorised Dealer must take all reasonable steps to ensure that the constituent is not
making foreign exchange available to any person in Pakistan other than an Authorised
Dealer against reimbursement in Rupees or is not by any other means contravening the
provisions of the Act. It shall be the responsibility of the Authorised Dealers to bring
to the notice of the State Bank immediately any such irregularities detected by them.
8. Operations on Non-Resident Accounts of
Persons, Firms and Companies other than Banks.
(i) Unless it is prescribed otherwise by the State Bank in respect of any particular Rupee
non-resident account of persons, firms and companies other than banks, all operations on
such accounts shall be governed by the rules set out below.
Authorised Dealers may, therefore, raise debits and afford credits to non-resident
accounts accordingly. The applicants will be required to fill in Form A-7 (Appendix V-7)
in respect of these transactions:
(a) Debits:
aa) Payments
on account of the account holder direct to the institutions concerned in respect of
insurance premium, club bills or other payments of a regular nature provided the payments
are supported by bills and vouchers.
bb) Government
and Municipal dues provided payments are supported by official claims and payments are
made direct to the Government or Municipal agencies.
cc) Debits
on account of disbursements in Pakistan limited to the extent of the funds received from
abroad through banking channel.
dd) Debits
representing payments through cheques direct to the carriers or the travel agents for
travel within the country by rail or air for self, wife, children and parents and for
travel abroad as approved in Chapter XVII.
ee) Debits
on account of purchase of shares of public limited companies and/or securities of the
Government of Pakistan, NIT Units, Prize Bonds, Defence Savings Certificates etc.,
provided such shares/securities etc., are purchased by the Authorised Dealers themselves
on behalf of the account holder on the basis of non-repatriation of capital,
dividend/interest etc., and registered at their Pakistan address and also retained by the
Authorised Dealers in their custody on behalf of their constituent concerned so long as he
resides outside Pakistan. Sale proceeds of such investments and dividends/interest etc.,
accruing thereon should be credited to the non-resident account only.
ff) Payments
against bills for hotel expenses in Pakistan of the family members of the account holder
provided payment is being made direct to the hotel by cheque. The concession is restricted
to hotels of the category of three stars and above only.
gg) Cheques
drawn in favour of his dependents resident in Pakistan for maintenance.
hh) Debits
in reversal of previous credits.
ii) Debits
in respect of approved remittances in foreign exchange.
jj) Payment
of installments of loans direct to the financial institution from whom the account holder
had obtained loan.
(b) Credits:
aa) Receipts
on account of salary, allowances, bonus, commission etc., directly from the employers by
cheque.
bb) Dividend
and interest income on investment in shares and securities directly from the company by
cheque.
cc) Income
from landed property and agricultural rent against identity of the depositor.
dd) Credits
of remittances received from abroad through banking channel.
ee) Interest
accrued on the amount lying in the non-resident account.
ff) Amounts
representing the maturity proceeds/surrender/paid up value of insurance policies and
proceeds of the shares of the public limited companies and/or securities of Government of
Pakistan purchased under sub para (a)(ee).
gg) Refund
of amounts previously debited or over-charged.
hh) Sale
proceeds of landed property as evidenced from the registered sale deed.
All other debits and credits require prior
approval of the State Bank.
(ii) While allowing operations on non-resident accounts in accordance with the above
instructions, the Authorised Dealers must satisfy themselves that the credits/debits to
the non-resident accounts fall under any one of the exempted categories and are in fact
meant for the purpose declared by the applicant. Authorised Dealers should take all
possible precautions to ensure that the above relaxation is not misused in any manner for
evasion of any of the provisions of the Act. It will be the responsibility of the
Authorised Dealers to ensure that payments from non-resident 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. Similarly while opening new non-resident accounts, Authorised
Dealers will ensure that the Rupee funds with which the account is proposed to be opened,
represent receipts from abroad through banking channel or represent Rupee funds which have
been accepted by the State Bank for remittance abroad. In cases of slightest doubt a
reference should be made to the State Bank for advice. If transactions passing through a
non-resident account are subsequently found to have been used for compensatory deals, the
Authorised Dealer maintaining the account will be held responsible therefore.
9. Disposal of Forms A-7.
Forms A-7 in support of the transactions on non-resident accounts shall be sent to the
State Bank along with Schedule 'K' prescribed in paragraph 7 of Chapter XXII of this
Manual.
10. Responsibility for submitting Form A-7 – Credits
to Private Non-resident Accounts.
In the case of credits to a non-resident account, except when otherwise prescribed, the
receiving banker, i.e. the bank which credits a non-resident account in its books is
responsible for ensuring that form A-7 has been completed or State Bank's approval
obtained where required, before crediting funds to private non-resident accounts. In order
that no difficulties arise on this score, the following procedure is suggested for
adoption by all banks. A cheque or draft etc., received for the credit of a non-resident
account of a company, firm or person should be sent by the receiving bank to the paying
bank, stating that a non-resident account is being credited and requesting in exchange a
pay slip accompanied by forms A-7 duly completed by the drawer or by the paying bank on
his behalf and where necessary, approved by the State Bank.
11. Responsibility for submitting Form A-7
– Debits to Non-resident Accounts.
In the case of debits to non-resident accounts cheques should be returned by the paying
banker with the remarks 'Non-resident account, Form A-7 required'. The collecting bank
will then arrange with the customer, for whom the payment is drawn, to submit Form A-7 to
the paying banker.
