FAP suggests incentive to undeclared $3 billion

FAP suggests incentive to undeclared $3 billion

People have an undeclared amount of $2 billion to $3 billion foreign currency in their homes and personal bank lockers. They want to exchange with Pakistani Rupee (PKR) but due to certain restrictions they are unable to bring it out. The government should provide legal shelter for declaration of concealed dollars, which will help to boost the foreign exchange reserves.

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Malik Muhammad Bostan, President, Forex Association of Pakistan (FAP) commented these at a conference on present economic woes, especially falling rupee and depletion of foreign exchange reserves.

“Many people taking advantage of Economic Reform Act purchased huge amount of dollars from the local market during the period of 1993 to 2008 and deposited in the banks of foreign countries or retained the dollars at their homes or lockers,” he said.

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Prior to year 2008, there were many unlicensed money exchange companies were operating under Economic Reform Act. Those exchange companies were allowed to sale and purchase foreign currency without ‘Know Your Customer (KYC)’. SBP licensed exchange companies were required to conduct KYC on sale/purchase of above $10,000.

“Now those people want to sale their dollars through KYC but without identification,” he said, adding that the under Financial Action Task Force (FATF) conditions, the banks are required to obtain identification on sale/purchase of above $15,000.

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“If this condition is relaxed then exchange companies will able to purchase huge amount of dollars and other foreign currency from public,” Bostan said.

FAP President said the government should allow purchase of gold from local market. “They may sale gold in international market and surrender foreign currency in the local market.”

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There is need to channelize foreign currency invested in cryptocurrency, he said and demanded that the government should provide legal cover to bring foreign currency back home.

He suggested that banks should stop forward dollar selling and should be allowed to sale dollar equivalent to purchase.

Bostan said the State Bank of Pakistan (SBP) should imposed 100 per cent cash margin on all imports except for necessary items.

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