SBP Rejects Demands to Relax Rules for Money Exchange Companies

On Wednesday, a delegation from the exchange companies met with State Bank officials in a bid to change its decision regarding the imposition of tougher anti-money laundering measures.

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


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

The State Bank of Pakistan has directed the exchange companies to keep a record of any transaction worth $500 or more against a person’s ID card.

The exchange companies argued that illegal trading of dollars and other currencies would flourish because of this requirement.

However they could not convince the SBP.

The State Bank of Pakistan (SBP) has refused to change its stance over requiring identification documents for all buying and selling transactions of foreign currency in amounts of $500 and above.

FATF Grey List

“The country fears that it may be put in the grey list in June. We have assured all our support to ensure that this doesn’t happen,” said Malik Bostan, President Forex Association of Pakistan who represented the exchange companies.

Bostan was trying to convince the State Bank to keep the requirement of identification only for buying transactions of $2,500 and above. For selling transactions, they were fine with the new requirement.

He said the shortage of dollars was obvious in the market and the price was going up. The biggest fear for the exchange companies was the growth of illegal trading of currencies in the market

The impact of SBP’s decision was immediately felt in the open market and the dollar rose to Rs118.40; an increase of 40 to 50 paisa.

“We usually collect third currencies equivalent to $2-3 million per day which suddenly dropped to just $1 million on Wednesday,” said Bostan adding that these currencies are taken to Dubai in cash form where they are exchanged for dollars, which are then remitted back into Pakistan via banking channels.

  • Why only 500?
    Whether its 1 or 1000, record should be kept, control on gray channels such a hundi system must also be tightened to determine who’re culprits smuggling Dollars out of country.

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