SBP Ends Lien Policy on Delayed Export Payments, Bringing Major Relief for Exporters
KARACHI: In a major policy shift aimed at boosting Pakistan’s export sector, the State Bank of Pakistan (SBP) has withdrawn its lien policy on delayed export proceeds. The move, particularly welcomed by the rice export community, reverses measures introduced through FE Circular No. 02 issued on March 31, 2023.
Previously, under the now-abolished rule, exporters who failed to bring in export earnings within the prescribed timeframe faced deductions—3% for delays up to 30 days, 6% for 31 to 60 days, and 9% for over 60 days. These penalties were designed to ensure timely repatriation of export proceeds but drew criticism from exporters facing delays due to factors beyond their control, such as extended shipping times.
Initially, the SBP had allowed delayed proceeds to be repatriated without deductions until April 30, 2023. After that date, the lien policy was enforced, with Authorized Dealers (ADs) required to report overdue cases to the Foreign Exchange Operations Department (FEOD) and deposit fines as determined by the Foreign Exchange Adjudication Department.
With the latest directive, the central bank has instructed all ADs to immediately release funds previously held under lien. Furthermore, ADs will continue to submit fortnightly reports of overdue export bills via Appendix-V20 and Appendix-V21 to the FEOD. The Foreign Exchange Manual has also been updated to reflect these changes.
Decision Made After REAP Delegation’s Intervention
The policy reversal came after a meeting between SBP Governor Jameel Ahmed and a delegation from the Rice Exporters Association of Pakistan (REAP), led by Senior Vice Chairman Jawed Jillani. The delegation—which included industry leaders such as former REAP chairman Rafique Suleman, Mahesh Kumar, Hasab Raud, Shahid Memon, Mohaib Moulvi, Faisal Garib, and Syed Badaruddin Chishti—highlighted the challenges exporters face, especially transit delays outside their control.
Jillani urged the central bank to remove penalties on such delays, a request to which the Governor responded immediately, instructing the withdrawal of the lien policy. He also accepted an invitation to visit REAP House in Karachi to meet the managing committee and leading exporters.
Additional Concerns Raised by Exporters
During the discussion, REAP members raised concerns over excessive foreign exchange rates charged by shipping companies—reportedly Rs. 10–12 above interbank rates. The Governor advised them to submit formal complaints with supporting evidence for further action.
Faisal Garib also pointed out issues with some banks refusing to provide the Export Refinance Facility (ERF). Governor Ahmed assured that banks have adequate ERF limits and encouraged exporters to report any such refusals.
Another matter discussed was the repatriation of long-pending funds stuck in Lebanon. The SBP chief confirmed that steps are already underway to resolve the issue.
Boost for Export Growth
This policy change is expected to provide immediate financial relief for exporters, improve cash flow, and encourage greater competitiveness in the global market. By eliminating the lien policy, the SBP aims to support Pakistan’s export-driven economic growth while addressing exporters’ operational challenges.
