Content Gen Dashboard

On May 22, 2026, the State Bank of Pakistan (SBP) issued Foreign Exchange Circular No. 01 of 2026, introducing a new framework governing the distribution of foreign exchange services by intermediaries and aggregators operating in Pakistan. The circular addresses the acquisition of services from abroad by Pakistani firms and companies, which is governed under Paragraph 11, Chapter 14 of the Foreign Exchange Manual. To facilitate companies seeking to act as intermediaries or aggregators between foreign service providers and domestic service acquirers, the SBP introduced a separate framework through the insertion of Paragraph 11A in Chapter 14 of the Foreign Exchange Manual. This new framework specifically governs intermediaries and aggregators that collect funds locally in Pakistani Rupees for onward remittance to foreign service providers. The circular was addressed to the presidents and chief executives of all Authorized Dealers (ADs) in foreign exchange. The SBP directed ADs to communicate these developments to all their constituents to ensure meticulous compliance with the updated framework. The specific provisions of the new framework are detailed in Annexure A of the circular, which outlines the operational requirements and conditions for intermediaries and aggregators seeking to facilitate foreign exchange service distribution in Pakistan. This development is significant for financial institutions, intermediaries, and aggregators operating in Pakistan's foreign exchange market, as it establishes clear regulatory parameters for service distribution activities involving cross-border fund transfers.

The State Bank of Pakistan (SBP) has released a framework for foreign exchange services distribution by intermediaries. . The framework prescribes: Scope and eligibility allowing authorized dealers (ADs) to execute remittances for companies in Pakistan acting as intermediaries for foreign digital advertising and information technology (IT)-related services, including subscription video on demand (SVOD) and digital music, provided these companies are not involved in inward remittance businesses. Prohibited payments and currency stipulating that underlying agreements must not contain late payment charges, interest, or payments for digital assets, gambling, or immoral activities, and requiring that all local fund collections be made in Pakistani Rupees into a dedicated, exclusive account. Remittance limits and acknowledgment permitting ADs to process remittances up to US$5m annually per entity for specific foreign service providers (Google LLC, Meta Platforms Inc., Microsoft Corporation, and Oracle Corporation), but mandating that arrangements with non-listed providers or those exceeding the US$5m limit require prior acknowledgment from the Foreign Exchange Operations Department (FEOD), SBP Banking Services Corporation (SBP-BSC). Due diligence and auditing requiring ADs to conduct thorough anti-money laundering (AML), combating the financing of terrorism (CFT), and countering proliferation financing (CPF) due diligence. Furthermore, for related-party transactions, an external auditor with a satisfactory quality control review (QCR) rating must confirm arm's length pricing, and before any remittance is executed, an auditor must verify the services, reconcile the funds, and ensure no prohibited payments are included. Reporting requirements mandating that designated ADs submit a consolidated monthly report to the FEOD, SBP-BSC via the regulatory approval system (RAS) within five working days of the month's end. The framework takes immediate effect.

meta_id 3182326

Generated

Pakistan's State Bank Issues Framework for Foreign Exchange Services Distribution by Intermediaries

Agent draft

Published

State Bank of Pakistan Issues Framework for Foreign Exchange Services Distribution by Intermediaries