State Bank withdraws condition of prior approval for imports

State Bank withdraws condition of prior approval for imports. The State Bank of Pakistan (SBP) on Monday eased some of the restrictions imposed on imports following months-long severe backlash from industry players and stakeholders.

The central bank withdrew the requirement of prior approval of imports and directed banks to prioritise the import of certain essential items like food, pharmaceutical, energy, etc.

“In order to facilitate businesses, State Bank of Pakistan withdrew the requirement of prior approval of imports (falling under HS code Chapters, 84, 85 and certain items under HS code Chapter 87),” a statement released by the central bank read.

“[…]Instead [SBP] gave a general guide to the banks to prioritise import of certain essential items like food, pharmaceutical, energy, etc,” a statement released by the central bank read.

The SBP imposed restrictions on imports in May 2022 following which several importers and industrialists cited these curbs as the reason behind shutting down or scaling back operations.

Read more:No Google payments blocked, clarifies SBP

The business community also severely criticised the role of the SBP in the crisis with regard to difficulty in opening letters of credit (LCs). The criticism deepened last week when the stakeholders lambasted SBP Governor Jameel Ahmad for their lack of support in opening LCs.

In the statement released today, the central bank mentioned that the business community, including various trade bodies and chambers of commerce, have highlighted that a large number of shipping containers carrying imported goods are stuck up at the ports, due to delays in the release of the shipping documents by the banks.

The SBP has advised banks to provide one-time facilitation to all those importers who could either extend their payment terms to 180 days (or beyond) or arrange funds from abroad to settle their pending import payments.

“Accordingly, till March 31, banks have been advised to process and release documents of shipments/ goods that have already arrived at a port in Pakistan or have been shipped on or before January 18,” the statement read.

Furthermore, the central bank is advised to educate their customers to inform their banks prior to the initiation of any import transaction to avoid any complications in the future.