KARACHI: The State Bank of Pakistan (SBP) has introduced a new and more transparent mechanism, with complete delegation to banks to help make remitting disinvestment proceeds convenient to facilitate foreign direct investment (FDI).
Under the new mechanism, the bank designated by the company has been delegated the authority to remit the entire disinvestment proceeds to non-resident shareholders, upon submission of required documents, by following a convenient mechanism without referring the case to SBP.
1/3 #SBP introduces a transparent mechanism, with complete delegation to banks, for remitting disinvestment proceeds to facilitate foreign direct investment. For details: https://t.co/7Z3BSpttHz
— SBP (@StateBank_Pak) October 27, 2020
As per the previous mechanism, a designated bank required prior approval of the State Bank for remittance of disinvestment proceeds above market value, for listed securities and, above breakup value, for unlisted securities.
According to a statement issued today (Tuesday), “The goal of this initiative is to make Pakistan a more attractive place for investment by increasing investors’ confidence and support ease of doing business.”
2/3 The new mechanism enables companies in #Pakistan to conveniently remit out disinvestment proceeds to non-resident shareholders.
— SBP (@StateBank_Pak) October 27, 2020
Taking to Twitter, the State Bank added that the transparent mechanism would also facilitate the local companies, in particular the start-ups, to attract foreign investment.
