SBP Rebuts Holding Payments to Google

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SBP Rebuts Holding Payments to Google
SBP Rebuts Holding Payments to Google

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. Entities desirous of utilizing this 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.

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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). DCBis, in general, an online mobile
payment method, which allows users to make purchases by charging payments to their mobile
phone carrier bill.

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
.

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If any entity, including a telco, intends to operate as an intermediary/payment aggregator and
such arrangement involves outflow of foreign exchange, it has to approach SBP, separately
through its bank, for seeking special permission for providing such services under the Foreign

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