5.2 Foreign Currency Accounts & Non-Resident Rupee Accounts

Why March 2026 text is the exam text

A trade-ops candidate who recites 2020 FCVA eligibility (only NRPs, POC holders, and resident filers with foreign assets) will miss EPD Circular Letter No. 05 of 2026 (24 March 2026). The letter’s operative paragraph, opened on sbp.org.pk, states that SBP has broadened Foreign Currency Value Account (FCVA), Non-Resident Pakistani Rupee Value Account (NRVA), Foreign Currency Business Value Account (FCBVA), and Non-Resident Rupee Business Value Account (NRBVA). Henceforth, all persons either natural or juridical who fall within the definition of non-resident persons under the Income Tax Ordinance, 2001 (XLIX of 2001) may open, operate, and maintain those accounts with ADs. Annexure-A revises Chapter 6 paragraphs 8A and 8B. Annexure-B revises Chapter 8 paragraphs 8 and 8A. ADs still apply AML/CFT/CPF regulations.

This independent OpenExamPrep section uses that March 2026 annexure text for value accounts, and the current Chapter 6 and Chapter 8 PDFs for F.E. 25 and for NRAR/NRAN. It does not restore placement or cash-deposit rules from memory of 1998–1999 circulars.

Ordinary private FC accounts and the F.E. 25 scheme (current Chapter 6)

Paragraph 1 still lists who may open ordinary private foreign currency accounts without prior SBP approval (resident and non-resident Pakistanis, foreign nationals, joint resident/non-resident, missions, international organizations, Pakistani firms and companies, and others named there). Airlines, shipping companies collecting passage and freight in Pakistan, and certain NBFCs are carved out. Paragraph 1(ii) still lists sources that must not feed those accounts (borrowed FX unless permitted, export payments, securities sold to non-residents, services rendered in or from Pakistan, overseas profits of Pakistani firms, and FX purchased from an AD or exchange company in Pakistan).

Paragraph 1(iv) of the current Chapter 6 PDF still states that ordinary foreign currency accounts can be fed by remittances from abroad, travellers cheques issued outside Pakistan, and encashment of GOP securities, and that a resident Pakistani citizen’s ordinary FC account can also be fed with cash foreign currency only if the resident account holder is a filer as defined in the Income Tax Ordinance, 2001. That sentence is current Chapter 6 text for ordinary private accounts. It is not a credit listed in the March 2026 FCVA annexure. Do not paste it onto FCVA.

F.E. 25 Scheme (current paragraph 7)

Paragraph 7 of the current PDF:

• Deposits accepted outside SBP’s forward-cover scheme under F.E. Circular No. 25 of 1998 are not required to be surrendered to SBP, and SBP will not provide forward cover.
• ADs accepting such deposits are free to lend, invest, and place on deposit such funds in Pakistan and abroad, subject to the Banking Companies Ordinance.
• ADs are free to decide the rate of return.
• Accounts and FE-25 trade loans may be in USD, GBP, EUR, JPY, CAD, AED, SAR, CNY, CHF, and TRY.
• ADs may use interbank placements and interbank SWAPs or any other FX liquidity source permitted under SBP rules to extend trade loans; the trade-loan currency must match the underlying LC or firm trade contract.
• BSD Circular No. 18 dated 31 March 2001 still allows use of FE-25 deposits for import/export financing under Appendix VI-3 guidelines.

A Special Cash Reserve Account against FE-25 deposits is maintained with SBP; DMMD circular letters set the remuneration rate from time to time. This section does not invent the live percentage. Read the latest DMMD letter if a question asks for the current rate.

FCVA after 24 March 2026 (Annexure-A, paragraph 8A)

ADs may open FCVA for:

• All non-resident individuals as defined under the Income Tax Ordinance, 2001, including non-resident Pakistanis and POC holders; and
• A resident individual Pakistani who holds assets abroad as per the wealth statement in the latest FBR tax return.

Mark the account resident, non-resident Pakistani, or other non-resident individual at opening. Enable internet/mobile, ATM/debit; cheque book if required; supplementary cards as law allows. Residents must provide details of foreign assets including the latest wealth statement. ADs are encouraged to offer online real-time FCY-to-PKR convertibility for eligible digital debits and to show the exchange rate. Non-resident individuals may open jointly with residents or non-residents; those joint accounts are treated as non-resident. A resident with declared foreign assets may open jointly with a resident only. Dormant non-resident FCVA should be reactivable digitally, consistent with applicable regulations.

Digital remote opening is encouraged. Monthly FCVA transaction statements that older footnotes sent to FCVA@sbp.org.pk are not restated as a numbered duty in the March 2026 annexure body; follow whatever remaining Chapter 6 reporting the AD’s returns still require, and do not invent a new email deadline from memory.

FCBVA after 24 March 2026 (Annexure-A, paragraph 8B)

FCBVA is for juridical persons who are non-resident under the Income Tax Ordinance, 2001: companies, associations, foundations, LLPs, societies, trusts, waqfs, and similar. Sole proprietorships and unregistered partnerships are excluded. That is the March 2026 change from the older “majority-owned by NRPs/POC holders and incorporated abroad” test.

ADs must provide online real-time FCY-to-PKR convertibility for eligible electronic debits and show the rate. Credits: banking-channel remittances from abroad; transfer from own NRBVA with the same AD; investment returns; reversal of erroneous debits. Debits: FCY GOP debt and same-AD FCY deposits; transfer to own NRBVA; transfer to any other FCY or PKR account (amount so transferred cannot be credited back); remittance without prior bank or SBP approval to the extent of the balance; PKR payments in Pakistan (generally cannot be credited back); reversal of erroneous credits.

NRAR and NRAN — the split that Circular Letter 05 did not delete

Current Chapter 8 paragraphs 1–2 still use the Income Tax Ordinance meaning of resident/non-resident (with the posted-abroad government employee treated as non-resident for this chapter). ADs may still open:

• Non-resident Rupee Account–Repatriable (NRAR)
• Non-resident Rupee Account–Non-repatriable (NRAN)
• NRVA and NRBVA (now as revised)

NRAR (paragraph 6) is fed mainly by banking-channel remittances, remittable funds already approved, transfers from other NRAR with the same AD, and investment proceeds of NRAR investments. Debits include local PKR payments, settlement of import bills by a non-resident importer, transfers, and remittances abroad to the extent of the balance.

NRAN (paragraph 7) funds are non-repatriable and usable only for payments and withdrawals in Pakistan. Cards cannot be used abroad. Local-style credits and debits that a resident PKR account could take are allowed. Existing resident PKR accounts of persons who become non-resident convert to NRAN.

United Nations accounts remain resident under the 1948 Privileges Act language in paragraph 4. Joint resident/non-resident rupee accounts are treated as non-resident (paragraph 5).

NRVA and NRBVA after 24 March 2026 (Annexure-B)

NRVA may now be opened for non-resident individuals as defined under the Income Tax Ordinance, 2001, not only NRPs and POC holders. Digital channels, supplementary cards, interbank settlement when cards are used abroad, joint accounts treated as non-resident, and digital dormant reactivation apply.

Credits include banking-channel remittances and home-remittance agency inflows, own FCVA/NRVA with the same AD, disinvestment and income from permitted investments, PBC proceeds, and reversal of incorrect debits.

Debits include GOP debt (including CDNS), quoted shares, residential and commercial real estate (self-finance or bank finance repaid from NRVA), same-AD deposits, quoted and open-end fund units, unlisted shares, private equity/venture funds, and VPS pension units. Transfers to own FCVA/NRVA with the same AD remain. Transfers to other FCY or PKR accounts cannot be credited back. Remittances abroad need no prior bank or SBP approval, except real-estate disinvestment under Annexure A to Chapter 8. Local PKR payments cannot be credited back.

Form M is not required for payment or repatriation from NRVA; ADs still report outward remittances by purpose code in monthly returns. Free Send Model: do not charge the NRVA customer a fee when sending through foreign correspondents under that model. On the inbound Free Send side, the AD may charge the beneficiary no more than the amount otherwise reimbursable under the TT-charges scheme, or provide the service free. Intermediary banks that pass NRVA credits do not claim TT reimbursement from SBP; they settle with the beneficiary bank.

Real estate (Annexure A to Chapter 8, still attached): no minimum holding period, but if disinvestment is within three years from final payment (or full loan adjustment), only principal may be repatriated; capital gain waits three years. Gain credited to NRVA in the meantime may be rolled into other eligible NRVA investments. Construction-on-land cases subtract land value per an approved-panel valuation. Family joint ownership is limited to parents, brother, sister, wife, children, and lineal ascendants/descendants. Sale/purchase versus valuation tolerance is +/- 10%. Title evidence is due within six months of final payment for self-finance or lien-based finance.

NRBVA is for non-resident juridical persons under the Income Tax Ordinance, 2001, with the same entity list and the same sole-prop/unregistered-partnership exclusion. ADs must provide real-time convertibility NRBVA to FCBVA and show the rate. Credits and investment debits follow Annexure-B (GOP debt, quoted and unlisted shares, funds, private funds, same-AD deposits). Remittance of the balance needs no prior bank or SBP approval. Transfers to other FCY/PKR accounts cannot be credited back.

Pakistani AD branch scenarios

Scenario A — German GmbH wants FCBVA. Pre-March 2026, staff asked whether NRPs owned 51%. Annexure-A 8B asks whether the company is a non-resident juridical person under the Income Tax Ordinance, 2001. A sole proprietorship is still refused.

Scenario B — FE-25 placement. Treasury wants to place surplus FE-25 with a correspondent in Dubai. Current paragraph 7(i) allows placement in Pakistan and abroad subject to the Banking Companies Ordinance. Reciting a 1999 “Pakistan only” ban is the wrong year.

Scenario C — cash USD into FCVA. A resident filer offers cash USD. Ordinary paragraph 1(iv) may allow cash into an ordinary resident filer FC account. FCVA credits in Annexure-A do not list cash notes. Book the correct product.

Scenario D — NRAN used like NRAR. A customer who converted a resident account on leaving Pakistan has NRAN. Staff must not issue a USD draft abroad from that balance. Repatriable product is NRAR, NRVA, or another repatriable account that the customer actually holds.

Scenario E — NRVA property sold in year two. Principal may go abroad; capital gain stays until three years from final payment or loan adjustment, unless rolled into other eligible NRVA investments.

Traps

• Teaching 2020 NRP-only FCVA/NRVA eligibility after Circular Letter 05 of 2026
• Reciting a pre-2026 FE-25 “place only in Pakistan” rule against current paragraph 7(i)
• Feeding FCVA with cash notes because ordinary paragraph 1(iv) mentions filer cash
• Opening FCBVA for a sole proprietorship
• Treating NRAN as freely repatriable
• Requiring Form M for an NRVA repatriation
• Repatriating NRVA real-estate capital gain before three years