SBP Imposes Restrictions on Dollars’ Flight to Afghanistan

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The State Bank of Pakistan (SBP) has imposed various restrictions on individuals and currency exchange companies to control the outflow of dollars and other foreign currencies to Afghanistan through legal channels.

The undesirable outflow of foreign currencies to the neighboring countries through legal channels and smuggling of currencies is one of the factors that put pressure on the Rupee which, thus, depreciates against the greenback.

In order to enhance transparency in the foreign currency transactions by exchange companies and to curb the undesirable outflow of cash foreign currency, the SBP has introduced the following regulatory measures:

  1. Persons traveling to Afghanistan will be allowed to carry only USD1,000/- per person per visit with a maximum annual limit of USD6,000.
  2. Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to USD500/- and above and outward remittances. This requirement will be applicable with effect from October 22, 2021.
  3. Exchange Companies will sell the cash foreign currency and make outward remittances, equivalent to USD10,000/- and above, against receipt of funds through cheque or banking channels only.
  4. The sale transactions of USD 10,000/- or above (or equivalent in other currencies) shall be conducted by the Exchange Companies of ‘B’ Category through Cheque/Bank Transfer issued from the personal account of the customer. Instrument/ transaction reference number and issuing bank’s name shall be mentioned on the transaction receipt along with the identification document number of the customer.
  5. For all foreign currency buy and sale transactions equivalent to USD 500/- or above, Exchange Companies of ‘B’ Category shall retain copies of identification documents i.e., 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) after having seen the document in original.

“In addition, Exchange Companies of ‘B’ Category shall also carry out biometric verification of Pakistani Nationals for all such sale transactions and maintain the record thereof,” said the SBP notification.

These regulatory measures will help improve documentation of the sale of foreign currency by exchange companies and place a check on the undesirable outflow of foreign currency.

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