Exchanges Mandated to Keep CNIC Details for Sale and Purchases Over $500

By Abdul Rahman & Jehangir Nasir

In anti-money laundering efforts, State Bank of Pakistan (SBP), on Tuesday, made it mandatory for exchange companies to retain identification on purchase and sale transactions of $500 and above.

The State Bank of Pakistan has directed the exchange companies to keep a record of any transaction worth $500 or more.

The companies have been directed to identify the people who engage in transactions of the US dollar, and the SBP has also amended its manual.

The decision was taken in order to further strengthen the AML/CFT regime for Exchange Companies.

As per new instructions, the exchange companies need to obtain and retain copies of the following identification documents in case of a transaction over $500 for at least 10 years or more:

  • Computerized National Identity Card (CNIC)
  • National Identity Card for Overseas Pakistanis (NICOP)
  • Pakistan Origin Card (POC)
  • Passport (having valid visa on it or any other proof of legal stay of a foreigner in Pakistan).

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The exchange companies have been warned, according to the SBP officials, of strict action against those who fail to follow suit.

Earlier in April, Pakistan’s central bank had advised people against the usage of cryptocurrency in any kind of transactions in the country, saying the new medium of exchange was neither “recognized as a Legal Tender” nor was “authorized or licensed” to anyone.

Virtual currencies/coins/tokens provide a high degree of anonymity and can be potentially used for facilitating illegal activities.

“Also due to the ambiguous nature of Virtual Currencies, no legal protection or recourse is available to any individual,” the circular added.

The central bank stated that the difference between buying/selling rates of US Dollar, Pound Sterling, Euro, Saudi Riyal and UAE Dirham shall not exceed one percent of their buying rate.

For all other foreign currencies, Exchange Companies shall ensure to maintain a competitive spread. Further, it must be ensured that prevailing exchange rates applicable for sale/purchase of major foreign currencies are displayed through notice/display board at a prominent place in each outlet of the exchange company.

The State Bank of Pakistan (SBP) had asked Exchange Companies (ECs) to strictly comply with Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) regulations to avoid any action by the Financial Action Task Force (FATF).

The top financial authority’s External Relations Department said it is prudent to stay away from digital currency deals or investments since its significant price fluctuations, hacking and cybersecurity issues, and closure, “including action by law enforcement agencies”, could lead to preventable losses.



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