LAHORE:
Garments’ manufacturers have appreciated the State Bank of Pakistan (SBP) for its directives regarding “Utilisation of funds held in exporters’ Special Foreign Currency Accounts” (ESFCAs) issued on February 23, 2024, but expressed concern over the lack of implementation by commercial banks, though a few weeks have passed.
In a statement on Monday, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Central Chairman Mubashar Naseer Butt said that the SBP, through its circular, had invited the attention of commercial banks towards paragraph 40 of Chapter 12 (Exports) of the Foreign Exchange Manual, which defined purposes for the utilisation of retained funds in ESFCAs.
He observed that the central bank further liberalised the utilisation of retained funds to facilitate exporters and promote ease of doing business, declaring all exporters would be able to freely utilise the funds held in ESFCAs. These will be used for making all types of payments abroad of the current account nature, for their own business purposes, without prior SBP approval.
Furthermore, on the request of exporters, authorised dealers may issue debit cards against balances held in ESFCAs. Butt called it highly disturbing that a step taken for the facilitation of exporters had been totally ignored by banks, which showed no practical will to comply with the directive.
It “is also reflective of the weak administrative control of the central bank over the banking industry.”
The association chief said that the apparel sector had the status of Pakistan’s top national industry, which was providing jobs to millions of workers directly and indirectly, and earning billions of dollars in foreign exchange for the national exchequer.
“The apparel industry has shown great export potential and it is one of the main contributors to LSM growth.”
Published in The Express Tribune, March 19th, 2024.
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