Foreign Exchange Manual

Borrowing in PKR by Foreign Controlled Companies

 FCC as per the CA 2017, They are allowed to borrow in from local sources for any purpose
except for purchase of shares(acquisition, financing, mergers, amalgamations, or even
minatory share holder purchase).
 Subject to Prudential, KYC, AML,CFT
 Purpose for borrowing must be clearly documented in authorized dealers and companys
records.

Borrowings by individual Non-Resident Pakistanis and Resident Foreign Nationals.

 Individual Non resident Pakistanis are allowed to borrow in LCY for all purposes, however
incase loan is for purchase of immoveable property. Following conditions apply:
1. Loan is to be repaid using remittance from abroad in foreign exchange through
proper banking channel or by debit into foreign currency accounts.
2. In future, if immoveable property is sold, sale proceeds shall not be sent outside
Pakistan(repatriable).
 Resident individual foreign nationals may obtain loan in LCY except for purchase of
immovable property.

Lending/Borrowing by Non-Residents in Pakistan.

Same as above except approval of state bank is required in both borrowing and lending in LCY by a
non resident.

Loans and Overdrafts against Guarantees of Non-Residents or against Collateral held outside
Pakistan.

 Authorized dealers can extend loans to RESIDENT INDIVIDUAL against guarantee from NON
RESIDENT/FROM BANKS OUTSIDE PAKISTAN. Subject to Prudential regulations.
 However if guarantee involves outflow of FCY for due diligence fee, upfront fee, commission
fee etc, approval os SBP is required.

Loans and Overdrafts by Authorized Dealers in Foreign Currency.

 Approval of SBP is required, except for FE-25 which doesn’t require approval.
 Such applications must state the purpose of the loan/overdrafts, particulars of guarantee
and collaterals, and manner of repayment/liquidation.