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KARACHI: The State Bank of Pakistan has allowed banks to process sugar export transactions for eligible mills in Punjab and Sindh provinces under revised quotas, according to a circular issued on Tuesday.
The central bank said the Ministry of National Food Security and Research had communicated revised province- and mill-wise export quotas received from the Pakistan Sugar Mills Association. The ministry’s memorandum was dated October 9.
“As per communications, the government of Punjab and the government of Sindh have endorsed the revised quotas of sugar mills located in their respective provinces,” the SBP said in a circular.“The endorsement from the government of Khyber Pakhtunkhwa (KPK) is still awaited,” it added.
Authorised dealers, also known as banks, may process the transactions subject to several conditions, the SBP said.Exports must be made against a sight letter of credit or advance payment, and shipments must go by sea, it said. There is no shipment deadline, and proceeds from letters of credit must be realised within the regulatory time period set by the central bank.
The SBP said it will communicate the Khyber Pakhtunkhwa government’s endorsement once it is received from the ministry. Banks may process export transactions of eligible sugar mills in the province only after that confirmation.
“Authorised dealers shall perform appropriate due diligence of the transactions and satisfy themselves with the bona fides of the client and underlying transaction in line with the applicable regulations,” the SBP said.
