State Bank of Pakistan (SBP) Saturday rejected the rumors going on in sections of the media about stopping certain payments to Google on their Twitter handle.
In the statement, SBP said that “the recent news circulating in some sections of the media that certain payments to Google are stuck at State Bank of Pakistan, is baseless and misleading. SBP strongly refutes all such assertions.
The fact is that in order to facilitate the domestic entities, SBP specified certain Information Technology (IT) related services, which such entities can acquire from abroad for their own use and make foreign exchange payments there against up to USD 100,000 per invoice. Such services include Satellite Transponder, International Bandwidth/ Internet/ Private Line Services, Software License/Maintenance/Support, and service to use electronic media and databases.”
SBP has denied rumours about stopping payments to Google.
The SBP noted that the entities wishing to use the aforementioned option designate a bank, which is once approved by the SBP. Following designation, such payments may be routed through the designated bank without needing to get additional regulatory approval.
However, recent off-site reviews revealed that Telcos were using Direct Carrier Billing to transfer the majority of the funds for video games, entertainment content, etc. that their customers had purchased with airtime in addition to the aforementioned mechanism to transfer funds for IT-related services for their own use (DCB).
The Telcos were allowing their customers to purchase the above-mentioned products through airtime and then remit funds abroad reflecting such transactions as payments for the acquisition of IT-related services.
Thus, in effect, the Telcos were acting as intermediaries/ payment aggregators by facilitating the acquisition of services by their subscribers. Therefore, in view of the violation of foreign exchange regulations, SBP revoked the designation of banks of Telcos for such payments. However, to facilitate their legitimate IT-related payments, Telcos have been advised through their banks to resubmit their requests.
SBP advised that if any entity, including a telco, intends to operate as an intermediary/payment aggregator and such arrangement involves the outflow of foreign exchange, then that entity has to approach SBP, separately through its bank, for seek special permission for providing such services under the Foreign Exchange Regulation Act, 1947.
