State Bank of Pakistan (SBP) has issued a set of instructions to commercial banks to block Non-Resident Accounts in their branches while investment the money within in approved securities.
Balances held in blocked accounts may be invested in "approved securities" expressed to be payable in Rupees or in fixed deposit with the bank in which the account is held subject to the prior approval of the State Bank. Shares or securities in which investment is permitted by the State Bank must be bought through the bank with whom the blocked account is kept and registered in the name of the account holder, the address being his permanent residential address outside Pakistan.
Alternatively, securities so purchased may be registered in the names of the banks keeping the blocked accounts or their nominees in Pakistan. The securities should not be held in bearer form and should not be sold or transferred without the permission of the State Bank. A blocked account means an account opened as a blocked account at any branch or office in Pakistan of a bank authorized in this behalf by the State Bank or an account blocked by the order of the State Bank.
The central bank asked commercial banks dealing in foreign exchange are permitted to maintain blocked accounts. A blocked account may not be opened in the name of a resident of Pakistan unless it is held jointly with a non-resident. No blocked account may be opened by an Authorized Dealer or an existing 'free' account blocked except under directions from the State Bank. Sub-section (1) (b) of Section 6 of the Act provides that where the State Bank has directed that any payment due to a non-resident may be made to a blocked account in his name with a bank in Pakistan, the crediting of the sum to the blocked account shall, to the extent of the sum credited, be a good discharge to the person making the payment.