SBP Steps Up to Record Forex Transactions Via Formal Channels

In order to further enhance transparency and promote documentation in the foreign exchange transactions, State Bank of Pakistan has advised exchange companies that all foreign currency sale transactions of USD 2,000/- or above (equivalent in other currencies) against PKR should be conducted through official payment modes, such as bank transfer/cheques from the personal bank account of the customer.

This step aims at encouraging the general public to use various banking channels, which are generally more secure, to fulfill their genuine foreign exchange needs.

The banking regulator strengthened the regime for exchange companies and encouraged customers to use banking channels for purchase of foreign exchange from exchange companies.

Hence, the existing regulations prescribing the scope of business of Exchange Companies have been amended, which will be effective immediately.

Recently, SBP issued show-cause notices to eight banks for their involvement in the currency manipulation which included 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.

These banks had been served show-cause notices as they quoted higher dollar rates to importers on some of the transactions and made substantial profits.