1.3 How Authorized Dealers Study the Framework

Policy versus operations: EPD and FEOD

Chapter 1, paragraph 7, of the FE Manual draws the line every AD officer must keep straight. Under FERA, SBP is responsible for day-to-day administration of foreign exchange policy, exercised through Exchange Policy Department (EPD). Foreign exchange operational matters are handled through Foreign Exchange Operations Department (FEOD), SBP-BSC, Head Office, Karachi. FEOD also maintains field offices, each with a stated geographic jurisdiction.

When Chapter 1 tells ADs how to send a reference, it splits the world in two:

• Annexure A / EPD — policy matters, investment-related issues, waiver from a Manual or circular provision, or a case where the Manual is silent. Address: Director, Exchange Policy Department, State Bank of Pakistan, I.I. Chundrigar Road, Karachi.
• Annexure B / FEOD — operational matters. Address: Director, FEOD, SBP-BSC, Head Office, I.I. Chundrigar Road, Karachi, or the respective SBP-BSC field office.

The first Chapter 1 extract of those annexures is the study method in miniature. EPD sees AD licence issues, merchanting LCs other than back-to-back, exemptions from EFE/EIF procedure, and advance-import cases that break the ordinary 120-day/amount mould. FEOD sees export and import overdue files and related litigation, operational EFE/EIF (or their PSW successors), open-account imports, LCs for import of services, and a long list of commercial-remittance operational items (oil and gas, aircraft lease rentals, shipping operating expenses, and similar). You do not need to memorize every annexure row on day one. You do need to know which building owns the file.

A Peshawar AD that wants a policy waiver (no Manual paragraph covers the customer's structure) must not 'copy FEOD on the overdue email and hope.' That is an EPD file. A Hyderabad AD sitting on an export overdue that already missed the Chapter 12 clock must not write to EPD for a friendly extension of a case already reported overdue. FE Circular No. 01 of 2022 is explicit: once the AD has reported the case as overdue to FEOD, SBP-BSC, the AD shall not allow an extension in the realization period.

Chapter 1 also loads the AD with a bona fides duty. Applications to SBP/SBP-BSC must be on prescribed forms, with documentary evidence. The AD is responsible for the applicant's bona fides and beneficial ownership, the correctness of statements, and the genuineness of the transaction. 'The customer signed the form' is not a defence under section 3 read with Chapter 1.

Three instruments, three jobs: Notification, FE Circular, Circular Letter

Pakistani FE law does not arrive as a single newsletter. Learn the labels. A frequent exam and desk error is to call everything a 'circular.'

Notification No. F.E. 1/2021-SB dated 19 July 2021 is the matching import-side example: it requires importers to declare that payment has been or will be made through an AD, and it superseded F.E. 1/2016-SB. Chapter 13 still contains residual WeBOC EIF language for banks not integrated with PSW. That residual clause is not a licence to treat WeBOC EIF as the primary 2026 process for a PSW-integrated AD.

Study method: when you open a Manual chapter, read the footnote list of circulars that last amended it. Chapter 12's current PDF still footnotes FE Circular No. 05 of 2022 and later EPD circular letters into 2024–2025. If your photocopy lacks those footnotes, your photocopy is the risk.

How the desk actually uses the Manual, PSW EDI, and ITRS

A working AD trade desk in Karachi or Lahore does not 'read the Manual' as literature. It runs a three-layer loop on every live transaction.

Layer 1 — Authority. Identify the Manual chapter (12 export, 13 import, 10 remittance, 6/8 accounts, 14 commercial, 16 private, 22 returns). Then search whether an FE Circular, Circular Letter, or Notification has rewritten the paragraph. Only then quote a number to the customer.

Layer 2 — PSW EDI. Under the Pakistan Single Window Act, 2021, ADs integrate with PSW. The AD maintains the trader's banking profile on Know Your Customer (KYC) and due-diligence standards and sends that profile to PSW. For LC, advance, contract, or collection, the AD communicates the Financial Instrument through EDI. PSW validates at GD filing and sends cleared-consignment data back to the AD for remittance and settlement. Open-account import/export generally needs no FI, except where a cash-margin circular applies — in which case the AD messages fulfilment of the margin through EDI. One FI can support multiple GDs; multiple FIs can support one GD if one FI's value is short. Settlement follows clearance of goods. SBP's own ITRS guidance notes that EFE and EIF are not required for goods effected under PSW.

Layer 3 — ITRS / Chapter 22. After the money moves, the AD reports the transaction in the International Transactions Reporting System (ITRS) under the purpose and scheme codes in SBP's Foreign Exchange Returns Code Guide (issued by SBP's statistics function; Chapter 12 currently points to the Core Statistics Department). Chapter 22 warns that incorrect or incomplete information attracts strict punitive action. Some hard-copy appendices still go to SBP-BSC area offices; the monthly electronic feed goes through ITRS/DAP. A clean PSW click that is reported on the wrong purpose code is still a defective FE return.

Put the three layers on one ticket. Example: a Sialkot surgical-goods exporter ships on 1 March under a contract due at 90 days. The AD lodges shipping documents (due within 14 days of shipment), shares the FI with PSW, watches realization by the due date (90 days) because that date is earlier than 120 days from shipment, credits the exporter, and reports the receipt in ITRS against the correct export purpose code. If documents never arrive, the AD chases by day 14 and, if still missing by day 30, reports to FEOD on Appendix V-11 by the 15th of the following month. That is studying the framework the way the desk uses it.

Trap 1 — Treating WeBOC EIF/EFE as the current primary process after PSW

Web-Based One Customs (WeBOC) EIF/EFE was the consignment-wise electronic form era: the trader visited the bank, the AD approved an EIF or EFE, the trader attached that form to the GD. Older Chapter 12 and Chapter 13 paragraphs still narrate that workflow, including WeBOC user IDs issued through FEOD and Bank Credit Advice against each EFE.

PSW's published design, and SBP's PSW-era Manual inserts, replace that consignment-wise form as the primary process with electronic trader profiles plus FIs via EDI. PSW's own elimination page is explicit: traders previously had to obtain EIF/EFE before filing a GD; those documents are replaced with profiles exchanged in real time between PSW and ADs. No FI is required for open-account import/export except cash-margin cases.

Exam trap: a question that still says 'the AD must approve EIF in WeBOC before every open-account GD.' For a PSW-integrated flow that is not on the cash-margin list, that answer is the retired process. Residual WeBOC language remains relevant for non-integrated channels and for historical overdue files. It is not the default 2026 primary process.

Trap 2 — Quoting 180-day export realization as the default

The retired instinct on many Pakistani desks, and on many old exam notes, is 'exports have 180 days.' That is not the default under F.E. 1/2022-SB and Chapter 12 para 6 as rewritten on 5 January 2022.

Current default: full export value must be received on the due date for payment or within 120 days from the date of shipment, whichever is earlier (or such other period as SBP may prescribe), through an AD, in a convertible currency in which the AD keeps accounts, or in rupees from a repatriable non-resident rupee account.

Special clocks, which are not the default:

• DP / CAD / sight: 45 days from shipment.
• 120-day usance LC: realization permitted within 135 days from shipment.
• 180 days from shipment: only if export bills/receivables are discounted and sold in forward to the AD before shipment or within 14 days of shipment.
• B2C e-commerce on a courier declaration: due date or 60 days from shipment, whichever is earlier (current Chapter 12). Do not recycle an older '180-day B2B2C' shortcut.

Where sale terms provide for payment earlier than 120 days, including DP/CAD/sight, the AD may extend only on a documented buyer explanation, and never beyond 120 days from shipment, and never after the case has been reported overdue to FEOD. Non-realization is an offence under FERA. Overdues go to FEOD, not to a quiet internal spreadsheet.

If a Gujranwala exporter invoices 150 days open account and the officer says 'SBP allows 180, we are fine,' the officer has used the exception as if it were the rule — and has also ignored 'whichever is earlier,' because a 150-day due date is already later than 120 days from shipment. That file is structurally overdue on day 121 unless SBP has given a different prescribed period.

A Monday study routine that matches the desk

1. Read NIBAF's four typologies so you know which pile a question belongs in.
2. Open the current Manual chapter PDF from the SBP hub, not a 2018 photocopy.
3. Open the circulars that footnote that chapter, especially F.E. 1/2022-SB, F.E. 1/2021-SB, EPD Circular Letter No. 05 of 2026, and EPD Circular Letter No. 08 of 2025.
4. Walk one live ticket through PSW (profile / FI / GD) and ITRS (purpose code).
5. Ask two trap questions every time: is this still a WeBOC EIF/EFE story, or a PSW FI story? is this 120-days-or-due-date, or a true 180-day discounted-forward exception?

That routine is how Authorized Dealers study the framework. It is also how this independent OpenExamPrep guide is organized from Chapter 2 onward.