Instruction Letter Template for Pakistan

An Instruction Letter guides banks or financial institutions to carry out specific actions on behalf of their clients in Pakistan. These formal written directives commonly appear in trade finance, letting businesses tell their banks exactly how to handle transactions, transfer funds, or issue financial instruments like letters of credit.

Pakistani banks require these letters to protect both parties and maintain clear audit trails. The letter must include precise details about the transaction, account numbers, beneficiary information, and any special conditions. Under State Bank of Pakistan regulations, instruction letters need authorized signatures and must follow standard banking formats to be legally valid.

Use an Instruction Letter when directing your bank to perform specific financial transactions in Pakistan. Common situations include requesting international wire transfers, opening letters of credit for imports, or setting up recurring payments to vendors. It's especially crucial for time-sensitive trade deals where precise banking instructions can make or break the transaction.

Pakistani businesses need these letters when dealing with multiple currency transactions, complex payment structures, or when regulatory compliance requires detailed documentation. They're particularly valuable for first-time transactions with new business partners, as they create a clear paper trail and help prevent costly mistakes in fund transfers or trade settlements.

• Banking Instructions: The most common type used for routine financial transactions, detailing account numbers, transfer amounts, and payment schedules
• Trade Finance Instructions: Specifically structured for international trade, covering letter of credit requirements, shipping documents, and customs clearance details
• Standing Instructions: Ongoing directives for recurring transactions, often used for regular vendor payments or scheduled fund transfers
• Investment Instructions: Used to direct banks on handling securities, mutual funds, or other investment activities under State Bank of Pakistan guidelines
• Forex Transaction Instructions: Specialized format for foreign currency dealings, including conversion rates and compliance with exchange control regulations

• Business Account Holders: Companies or individuals who initiate the Instruction Letter to authorize specific banking transactions
• Bank Officers: Process and validate the instructions, ensure compliance with banking regulations, and execute the requested actions
• Financial Controllers: Draft and review instruction letters on behalf of large organizations, ensuring accuracy of financial details
• Trade Finance Managers: Prepare specialized instructions for international trade transactions and documentary credits
• Compliance Officers: Review instructions to ensure they meet State Bank of Pakistan guidelines and anti-money laundering regulations

• Account Details: Gather complete bank account information, including IBAN numbers and branch codes
• Transaction Specifics: Document exact amounts, currencies, and timing requirements for the financial transaction
• Authorized Signatories: Confirm who has authority to sign under your company's banking mandate
• Supporting Documents: Collect any required trade documents, invoices, or regulatory permits
• Bank Requirements: Check your bank's specific formatting guidelines and documentation needs
• Verification Process: Review all details carefully - our platform helps ensure your instruction letter meets all legal requirements

• Header Information: Bank name, branch details, date, and reference numbers clearly displayed
• Account Details: Complete account holder information and account numbers in State Bank format
• Transaction Specifics: Clear instructions about the financial action requested, amounts, and timing
• Authorization Section: Names and designations of authorized signatories as per banking mandate
• Compliance Statement: Declaration of compliance with foreign exchange regulations and anti-money laundering laws
• Signature Block: Space for authorized signatures, company stamp, and witness attestation if required
• Supporting Documents: List of attached documents or required annexures

An Instruction Letter and an Authorization Letter often get mixed up in Pakistani banking and business contexts, but they serve distinct purposes. While both involve giving permission, their scope and application differ significantly.

• Purpose and Scope: Instruction Letters provide specific, detailed directives for a particular financial transaction or series of transactions. Authorization Letters grant broader permission for someone to act on your behalf across various situations.
• Level of Detail: Instruction Letters must include exact transaction amounts, account numbers, and timing specifications. Authorization Letters typically outline general powers without transaction-specific details.
• Duration: Instruction Letters usually cover one-time or specific recurring transactions. Authorization Letters often remain valid for longer periods and multiple uses.
• Banking Requirements: Banks require Instruction Letters to follow strict formatting and include specific transaction details. Authorization Letters need less stringent formatting but must clearly establish the authority granted.