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KARACHI: The central bank on Thursday allowed commercial banks to issue financial instruments (FIs) during the registration of import contracts for crude oil and petroleum products, as well as standby letters of credit (SBLCs) to facilitate these imports, including liquefied natural gas, in response to geopolitical uncertainties, a circular said.
This decision follows amendments made to the instructions regarding ‘Imports under Pakistan Single Window (PSW) -- Financial Instrument Details’ and ‘Guarantees on behalf of Residents of Pakistan in Favour of Non-Residents’ in the Foreign Exchange Manual.
The conflict in the Middle East, a crucial global energy centre, has intensified concerns regarding instability in oil and gas markets, rendering nations such as Pakistan, which depend significantly on imported fuel, more vulnerable to price surges and supply disruptions.
According to the revised guidelines, authorised dealers (banks) will communicate the details of import transactions using electronic data interchange (EDI) with the PSW. Financial instruments will be issued on behalf of importers after advance payment is made, a letter of credit is established, or shipping documents are received directly from banks abroad. This may also involve the issuance of shipping guarantees under registered contracts and the collection of payments in accordance with applicable regulations for importing crude oil and petroleum products by oil refineries and marketing companies. Importantly, payment will only be made upon presentation of the shipping documents that comply with the terms of the registered contract.
