August 8, 2020 (MLN): State Bank of Pakistan (SBP) has introduced a separate category of PKR Account named ‘Non-Resident Pakistanis Rupee Value Account (NRVA), in order to facilitate expatriate to open and operate non-resident PKR account through digital means and to invest in shares quoted on the Stock Exchange(s) in Pakistan, residential & commercial real estate, government of Pakistan debt securities and term/ remunerative deposit products of ADs on repatriable basis.
According to the circular issued by SBP, Non-resident Pakistanis (NRPs), foreign nationals except those who have obtained work visa/permit to work in Pakistan, and firms or companies that are incorporated or registered outside Pakistan will be able to open and maintain NRVAs.
Authorized dealers (ADs) will be allowed to open and maintain the following categories of non-resident rupee accounts which include; Non-resident Rupee Account-Repatriable (NRAR), Non-resident Rupee Account-Non-repatriable (NRAN) and NRP Rupee Value Account (NRVA) for Non-resident Pakistanis only.
In addition to this, ADs may open ‘NRP Rupee Value Account’ of non-resident Pakistani individuals only, in addition to other non-resident rupee accounts categories mentioned above.
ADs are advised to enable operations in the account through the digital channels e.g. internet/mobile banking, ATM/ Debit cards, besides the conventional modes in practice. The ADs may also issue cheque book to the account holder, if required.
ADs may issue supplementary ATM/Debit cards as per applicable laws /regulations and banking practices. In case debit cards are used outside Pakistan, settlement there against shall be made by the AD through interbank.
ADs will be allowed to let non-resident Pakistanis to open the account jointly with other residents/non-residents, as per applicable laws/banking practices. These accounts should, however, be treated as non-resident accounts.
In case the account becomes dormant due to non-operation, ADs shall devise a mechanism to reactivate the account digitally, in compliance with the applicable regulations. In addition to this, ADs are required to ensure ongoing monitoring of these accounts to mitigate ML/FT risk.
Furthermore, the circular revealed that Credits allowed in NRVAs include, remittance received from abroad through banking channels, transfer of funds from holders’ Foreign Currency Value Account (FCVA) from other NRVAs with the same authorized dealer, and proceeds from disinvestment, sale or maturity of assets in Pakistan such as Government of Pakistan’s debt securities, residential and commercial real estate, quoted shares, term deposits and profit, rent, dividend and interest on such securities, properties, shares or deposits.
The holder of the account can make investments through NRVA, in Registered Debt securities of GoP (T-bills, PIBs, Sukuk and any other registered debt securities of the government including CDNS securities), Shares quoted on the stock exchange(s) in Pakistan., Residential and commercial real estate and Term /remunerative deposit products of the AD maintaining the account. However, the transfer of funds for the above investments will be allowed by the ADs through the special instructions received from the account holder in this behalf. For investments mentioned.
The account holder can transfer funds to account holder’s own Foreign Currency Value Account (FCVA) and other NRP Rupee Value Account (NRVA) with the same AD. Additionally, he/she can also move funds to other FCY, PKR account and non-resident Rupee account – non-repatriable (NRAN) with any bank in Pakistan.
The account holder may withdraw or make payments in Pak rupees to anyone in Pakistan, however, any amount paid will not be allowed to be credited back into the account.
Remittances and Payments outside Pakistan are to be limited to the extent of balance available in the account. Moreover, the account holder is not required to take any prior approval from the bank or the SBP, except in the case of investment in real estate.
The ADs may allow individual Non-Resident Pakistanis (NRPs) to make payments for investment in the residential and commercial real estate on repatriable basis from their NRP Rupee Value Accounts (NRVA) subject to compliance with the following terms and conditions:
- The Investment shall be made out of funds received from abroad through banking channel in Pakistanor transfer of funds from the account holder’s own Foreign Currency Value Account (FCVA) or other NRP Rupee Value Account (NRVA).
- AD will ensure due diligence and ongoing monitoring of these transactions in line with the applicable ML/FT regulations.
- The investment may be made on installment or full payment basis.
As per the SBP, the minimum investment period in real estate will be three years. Following the completion of three years, investors will be able to repatriate the full amount of sale proceeds of the investment in property.
However, in case of dis-investment before three years, investor can repatriate funds up to the lower of the amount of sale proceeds or his/her principal investment amount in PKR on the date of the investment, while the differential amount, if any, and any profit/return earned from eligible investments made out of this amount may be repatriated after the expiry of three years from the date of investment, the circular revealed.
The SBP also introduced a Foreign Currency Value Accounts (FCVA) which will enable non- resident Pakistanis as well as resident Pakistanis that have assets abroad declared with the Federal Board of Revenue (FBR), to invest in foreign currency denominated government registered debt securities on repatriable basis.
In this regard, the ADs are encouraged to provide online real time convertibility from FCY to PKR based on the request made by the account holder digitally for the eligible debits from the account. For the sake of transparency, the ADs shall indicate the exchange rate that is applicable for the transaction.
Furthermore, the account holders will be able to invest in permissible securities which include, GoP’s registered debt securities and Term deposit/remunerative product scheme, denominated in FCY only, of the same AD.
In addition to this, the holder of the account can transfer funds to his/her own NRP Rupee Value Account with the same authorized dealer and can also transfer to other foreign exchange Pakistani rupee account and non-resident rupee account with any bank in Pakistan.
Moreover, the holders of the account will be allowed to remit and pay outside Pakistan to the extent of balances available in their account without any prior approval from the bank or SBP.
The account holder will be enabled to withdraw cash in foreign currency and equivalent local currency and make payments in Pak rupees to any person in Pakistan. However, the amount paid will not be credited back into the account.
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