KARACHI: State Bank of Pakistan (SBP) on Friday made it mandatory the transactions of foreign currency above $2,000 through banking channels in order to document sales and purchases of the foreign currency.
In this regard, the central bank amended Exchange Companies Manual to ensure documentation of buying and selling of the foreign currency.
READ MORE: PKR ends 15-day losing streak; recovers against dollar
The SBP in a statement said that to further enhance transparency and promote documentation in the foreign exchange transactions, the central bank advised the Exchange Companies that all foreign currency sale transactions of $2,000/- or above (equivalent in other currencies) against Pakistani Rupee (PKR) should only be conducted through payment modes, such as bank transfer/cheques from the personal bank account of the customer.
“This step is also focused on encouraging the general public to use various banking channels, which are generally more secure, to fulfill their genuine foreign exchange needs,” the SBP added.
READ MORE: SBP issues new instructions on cross border payments
The central bank issued a circular in this regard inviting attention of Exchange Companies and Exchange Companies of ‘B’ Category to instructions contained in Para 9 (i)(g) and Para 9 (iii)(g) of Chapter 3; and Para 12(i)(d) of Chapter 8 of the Exchange Companies Manual.
In order to further strengthen the regulatory regime for Exchange Companies, and encourage customers to use banking channels for purchase of foreign exchange from Exchange Companies, the existing regulations prescribing the scope of business of Exchange Companies have been amended, which will be effective immediately:
Para 9(i)(g) Chapter 3 of Exchange Companies Manual
All foreign currency sale transactions of $2,000/- or above (or equivalent in other currencies) against PKR shall be conducted by the Exchange Companies through bank transfer/ cheque from the personal account of the customer. The transaction/instrument reference number and the name of the bank transferring funds/ issuing the instrument shall be mentioned on the transaction receipt along with identification document number of the customer.
READ MORE: President Alvi bars retrospective effect to profit rates on saving certificates
Para 9(iii)(g) Chapter 3 of Exchange Companies Manual
All foreign currency sale transactions for outward remittance of $2,000/- or above (or equivalent in other currencies) against PKR shall be conducted by the Exchange Companies through bank transfer/ cheque from the personal account of the customer. The transaction/instrument reference number and the name of the bank transferring funds/ issuing the instrument shall be mentioned on the transaction receipt along with identification document number of the customer.
READ MORE: No restriction on imports, SBP clarifies
Para 12(i)(d) Chapter 8 of Exchange Companies Manual
All foreign currency sale transactions of $2,000/- or above (or equivalent in other currencies) against PKR shall be conducted by the Exchange Companies of ‘B’ Category through bank transfer/cheque from the personal account of the customer. The transaction/instrument reference number and the name of the bank transferring funds/ issuing the instrument shall be mentioned on the transaction receipt along with identification document number of the customer.
The SBP warned that failure to comply with these instructions shall attract regulatory action under the relevant provisions of the Foreign Exchange Regulation Act, 1947.
