KARACHI: The State Bank of Pakistan (SBP) has permitted exporters of software and IT&IT-enabled services to retain 35% of their earnings earned outside of Pakistan in an effort to encourage them to bring in more foreign currency. In order to achieve this goal, the SBP modified the Foreign Exchange Regulations and instructed the banks to mandate the holding of 35% of their export revenues in special foreign currency accounts until March 31, 2023.
The Pakistan Software Export Board (PSEB) or the Pakistan Software Houses Association (P@SHA) must, however, have these exporters’ registrations. These guidelines will be reevaluated in light of the IT sector’s increased export performance and the realisation of export earnings during this time.
Exports of computer, information, and telecommunication services rose to $2.618 billion in FY22 from $2.108 billion in FY21. However, the SBP’s decision to limit the flow of dollars has begun to harm the industry as exports were nearly unchanged from July through November of FY23 at $1.087 billion compared to $1.051 billion during the same period last year.
In a Friday circular, the SBP stated that exporters “would be authorised to use their reserved cash for legitimate business payments or expenses abroad.”
Banks are encouraged to offer digital channels for the opening and management of these special foreign currency accounts, according to the SBP. After performing the requisite due diligence, banks can now facilitate outbound remittances from the retained revenues through the issuance of corporate debit cards.
“The modifications would encourage new entrants in this sector to focus on exporting and enable existing exporters to improve their operations,” according to the SBP.
This will lead to the creation of job opportunities and an increase in the nation’s foreign exchange revenues.
According to the data, Pakistan earned $633 million in the first quarter of the current fiscal year 2022–2023 by exporting various IT services.
The export of computer services increased by 5.21 percent to $516.4 million during July through September of FY23 from $490 million during the same period in FY22, according to the Pakistan Bureau of Statistics (PBS).
When it comes to computer services, exports of software consulting rose by 5.73 percent, from $176.5 million to $186.6 million, while those of hardware consulting increased by 10.27 percent, from $0.837 million to $0.923 million.
In the months under examination, the export of telecommunication services fell by 18.94%, from $142.7 million to $115.7 million.
The export of call centre services, which climbed from $44 million to $53 million during the period under review, increased by 21.20 percent, while the export of other telecommunication services declined by 36.85 percent, from $89.7 million to $62.3 million.
Banks have been urged by the SBP to set up a system for facilitating and quickly resolving client concerns. The banks were further advised to establish a permanent help desk supervised by two officers not below the rank of vice-president to act as lead coordinators on behalf of the bank to resolve issues about account opening, retention in accounts, outward remittances, etc. and to provide proper training to relevant staff of all foreign exchange dealing branches.
