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FCA-holders allowed to transfer accounts

RECORDER REPORT

KARACHI: The State Bank has allowed persons holding foreign currency accounts to transfer their accounts from their existing bank to another without involving movement of foreign currency.

The SBP issued a circular on Thursday referring to the instructions contained in the earlier circular, in terms of which "there are restrictions on withdrawal in foreign currency from foreign currency accounts (FCAs) except as permitted vide circular issued subsequently."

"Such transfers will be made for the entire balance of the concerned accounts along with accrued interest, if any, and partial transfer of funds is not permissible", said the circular.

Upon the transfer of such accounts, the existing accounts with the transferring bank will stand closed.

Persons wishing to transfer their accounts will approach their bankers giving the name of the bank branch where they wish the account to be transferred, along with a letter from such bank confirming that it is prepared to open the account.

According to the procedure, the head office/branch of the bank, which had surrendered the inward remittances to the State Bank will approach the Chief Manager, SBP, Karachi/Lahore, giving a list of all such requests received during a day showing the names of the account holders, balances required to be transferred, the names of the banks where the accounts are being transferred and particulars of the forward contract, if booked with the SBP, the rate at which forward contract was booked and the amount to be nationally "lifted" against each forward contract.

The State Bank will cancel the forward contracts for the applicable amount and pay the rupee differential between the booked and the rate currently applicable to encashment of FCAs.

The forward cover fee, already recovered, would also be refunded for the un-expired period of the contract.

The bank which submits the request for the transfer of the account will transfer the rupee equivalent of the foreign currency amount to the bank where the accounts is being transferred.

The transferee bank may book fresh forward contract, if it so wishes, at the current applicable rate, and pay the applicable forward cover fee, provided that the forward cover is obtained from the State Bank simultaneously i.e. on the date of transfer of such account from the transferring bank.

The transferee bank will treat the account as subject to the same restrictions, as applicable to the account held by the transferring bank.

At the time of transferring balances, the transferring bank will need to ensure that the status and title of the account with the transferee bank remain unchanged.

The above general permission does not apply to swap deposits, which are being regulated by separate special arrangements.