Karachi, November 16, 2025 – The State Bank of Pakistan (SBP) has strengthened regulations governing foreign currency accounts to improve documentation, promote digital transactions, and enhance transparency within the foreign exchange market.
Under the revised framework, exchange companies will no longer be permitted to provide physical cash to resident Pakistanis wishing to deposit funds into their foreign currency bank accounts. Instead, all such transactions must now be completed strictly through account-to-account transfers. The SBP says this shift is designed to discourage informal dollarisation and reinforce anti-money laundering (AML) controls across the financial system.
The updated guidelines, issued through amendments to the Regulatory Framework for Exchange Companies, require immediate implementation by all exchange firms. These businesses must also inform customers about the new procedures and ensure that sales of foreign currencies for account deposits are processed only through digital channels.
Market analysts believe the move represents an important step toward integrating more foreign exchange activity into formal banking systems. Experts note that reducing cash-based transactions can limit opportunities for informal market leakage, improve traceability of retail FX flows, and strengthen overall compliance with AML and Know Your Customer (KYC) requirements. They also expect the new policy to support exchange rate stability by reducing cash-driven demand for dollars in the open market.
Financial sector representatives add that the decision will likely reduce operational risks for exchange companies by lowering their exposure to physical cash. The policy may also encourage greater use of bank accounts and digital payments, supporting Pakistan’s broader push toward financial inclusion and a cashless economy.
However, industry stakeholders caution that challenges may emerge for individuals without access to banking services or those who rely heavily on cash transactions. Reduced cash turnover at exchange companies could affect their revenues, while inconsistent enforcement may allow informal channels to adjust and potentially undermine the intended impact.
Despite these concerns, the SBP maintains that the updated rules mark a significant advance toward transparency, digital compliance, and a more stable foreign exchange environment in Pakistan.