Karachi November 8 2022: State Bank of Pakistan bars limit of USD 30,000 per annum on usage of debit and credit cards for international payments in order to avoid its commercial usage, according to the new notification issued here on Tuesday.
The State Bank of Pakistan (SBP) has observed that debit/credit cards are being used for transactions, which are not aligned with the profile of the individual or are intended for commercial purpose. Therefore, SBP has advised banks to ensure that the use of debit/ credit cards for international transactions is aligned with the profile of card holders and for their personal needs only.
Besides, an annual limit of USD30,000 has been prescribed for individuals for international transactions. For the purpose of this notification the year will start from November 1, however, limit for the current year will be calculated from the date of issuance of this circular. This limit would be applicable for an individual across the banking industry.
It is emphasized that the purpose of debit/credit cards is to facilitate individuals in making payments for transactions that are of personal nature. The limits on these cards as well as payments through them, both domestic and international, should therefore be aligned with the profile of the card holder.
It shall be the responsibility of a customer to ensure that his/ her annual limit is not breached at any time. However, banks are required to monitor these limits on consolidated basis for each individual.
Banks are advised by the SBP to conduct proper due diligence of the individual customers at the time of their onboarding/ update of risk profiles and duly incorporate their cross-border payment needs through cards in their profiles. Banks are advised to ensure that issuance of multiple cards to a single customer are commensurate with their risk profile and are monitored collectively. Further, banks should only allow those card based cross-border transactions, which are in-sync with the personal needs of the customers and have no commercial purpose.
Banks desirous to facilitate their business customers may issue corporate cards, to be used strictly in accordance with the applicable provisions of the Foreign Exchange Manual and the profile of the customer. Banks shall institute a robust mechanism to monitor the payments through such corporate cards.
Besides, Banks are advised to run an awareness campaign to inform their customers about the contents of this circular and the fact that cross-border commercial payments through cards issued to individuals are not permissible.
As regards use of cards for cross border transactions for meeting legitimate business related needs, a framework for acquisition of digital services is already available in the Foreign Exchange Manual, in terms of which entities intending to acquire digital services can designate a bank to use this facility as per respective limits defined in the said framework. Besides, a general framework for acquisition of services by firms and companies has been given in Para 11, Chapter 14 of Foreign Exchange Manual.