Background
Like other developing countries, Pakistan’s import bill exceeds exports. Therefore, it faces scarcity of foreign exchange to meet its import requirements. According to daily “DAWN” dated 18th November 2012, Pakistan’s foreign exchange reserves were USD 13.84 Billion at the week ended as on 9th November 2012.
Gap between the import and export bills is partially covered by regulations, controls and measures exercised by State Bank of Pakistan and partially by the international credit, aid, loan agencies like International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB). State Bank of Pakistan keeps control at a time, over this imbalance by imposing cash margin restrictions on import of general items from time to time. This is done in order to restrict imports and to allow import of only necessary items to fulfill genuine requirements and to discourage import of non-commercial and luxury items.
CASE STUDY: On 1st February 2012, restriction on import of CNG cylinders and kits was imposed by Government of Pakistan in view of government policy to discourage use of CNG as a fuel due to its short supply and ever rising demand. No importer is allowed to import CNG cylinders & kits up till now which is being restricted by SBP & custom authority.
Foreign trade involves many risks because of different locations /countries of importer and exporter. Both the parties are doing their businesses in different countries where different laws & regulations apply and it is difficult to settle any dispute regarding goods quality and payment settlement between importer and exporter. For safeguarding interest of both importer and exporter, banks involve in these transactions for smooth settlement between the parties.
IMPORTERS
Any body who imports the required goods into the country is called an importer. The importer has to pay the exporter for the value of goods in foreign exchange.
Importers are classified into three