The State Bank of Pakistan has advised exchange companies that all foreign currency transactions of USD 2,000/- or above (equivalent in other currencies) against PKR should only be conducted through banking channels. The SBP said in a circular; “State Bank of Pakistan has advised the Exchange Companies that all foreign currency sale transactions of USD 2,000/- or above (equivalent in other currencies) against PKR should only be conducted through payment modes, such as bank transfer/cheques from the personal bank account of the customer.”
Documentation of Foreign Currency Transactions to Promote Transparency
SBP has directed exchange companies to ensure that all the transaction slips must contain necessary information related to foreign currency transactions. That includes the transaction, instrument reference, name of the bank transferring the funds, the bank issuing the funds, and the customer’s identification document number.
The central bank stated that the step is focused on encouraging the general public to use various banking channels, which are generally more secure, to fulfill their genuine foreign exchange needs. The bank has additionally warned of “regulatory action” in case the exchange companies failed to comply with the instructions. “The action would be taken under relevant provisions of the Foreign Exchange Regulation Act, 1947,” said the SBP.
SBP Issues Show Cause Notice to Eight Banks over Currency Manipulation
Recently, the State Bank of Pakistan has issued show-cause notices to eight commercial banks over suspicion of currency manipulation. The banks included; the National Bank of Pakistan, Allied Bank Limited, Bank Al Habib, Standard Chartered Bank, Meezan Bank, Habib Bank Limited, HabibMetro Bank, and the United Bank Limited. The banks were picked for inspection based on their trade volumes and profits that they made till the end of June. Dr. Inayat Hussain, the deputy governor of the State Bank of Pakistan, said; “The banks quoted very high rates on some of the transactions, which created more volatility and uncertainty.”