SBP denies rumours about stopping payments to google

By: News Desk
Published: 12:34 AM, 27 Nov, 2022
SBP denies rumours about stopping payments to google
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State Bank of Pakistan (SBP) Saturday rejected the rumours going on in sections of media about stopping certain payments to Google on their twitter handle, reported 24NewsHD TV channel.

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, are 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 said that the entities desiring the utilization of the above-stated option designate a bank, which is approved by SBP one time. Subsequently, after designation, such payments can be processed through the designated bank, without any further regulatory approval. However, during recent off-site reviews, it was observed that in addition to utilizing the aforesaid mechanism to remit funds for IT related services for their own use, Telcos were remitting bulk of the funds for video gaming, entertainment content, etc. purchased by their customers using airtime, under Direct Carrier Billing (DCB). The Telcos were allowing their customers to purchase above mentioned products through airtime and then remitting funds abroad reflecting such transactions as payments for acquisition of IT related services. Thus, in effect the Telcos were acting as intermediaries/ payment aggregators by facilitating 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 outflow of foreign exchange, then that entity has to approach SBP, separately through its bank, for seeking special permission for providing such services under the Foreign Exchange Regulation Act, 1947.

Categories : Business