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SBP refutes holding payments to Google

Shariah-Compliant OMO: SBP injects Rs127bn into Market
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November 27, 2022 (MLN): The State Bank of Pakistan (SBP) on Saturday rebutted the news circulating regarding certain payments to Google that are stuck at the central bank, terming these claims baseless and misleading.

The false news was circulating in some sections of media that Google Play Store services would not be available in Pakistan from December 1 as SBP suspended the Direct Carrier Billing (DCB) mechanism.

"The fact is that in order to facilitate the domestic entities, SBP specified certain Information Technology (IT) related services, which such entities can acquire from abroad for their own use and make foreign exchange payments there against up to $100,000 per invoice. Such services include Satellite Transponder, International Bandwidth/ Internet/ Private Line Services, Software License/Maintenance/Support, and service to use electronic media and databases," SBP clarified.  

The clarification note further read, "Entities desirous of utilizing this option designate a bank, which is approved by SBP one time."

Subsequently, after designation, such payments can be processed through the designated bank, without any further regulatory approval.

However, during recent off-site reviews, it was observed that in addition to utilizing the aforesaid mechanism to remit funds for IT-related services for their own use, Telcos were remitting the bulk of the funds for video gaming, entertainment content, etc. purchased by their customers using airtime, under DCB.

DCB is, in general, an online mobile payment method, which allows users to make purchases by charging payments to their mobile phone carrier bill. The Telcos were allowing their customers to purchase above mentioned products through airtime and then remit funds abroad reflecting such transactions as payments for the acquisition of IT-related services.

Thus, in effect, the Telcos were acting as intermediaries/ payment aggregators by facilitating the acquisition of services by their subscribers.

Therefore, in view of the violation of foreign exchange regulations, SBP revoked the designation of banks of Telcos for such payments.

However, to facilitate their legitimate IT-related payments, Telcos have been advised through their banks to resubmit their requests.

If any entity, including a telco, intends to operate as an intermediary/payment aggregator and such arrangement involves the outflow of foreign exchange, it has to approach SBP, separately through its bank, for seeking special permission for providing such services under the Foreign Exchange Regulation Act, 1947.

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Posted on: 2022-11-27T17:41:06+05:00

 

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