The State Bank of Pakistan (SBP) has introduced new restrictions on cash dollar transactions, directing banks and exchange companies to transfer foreign currency directly into customers’ accounts rather than handing over cash.
The move, announced in a circular issued, is part of the central bank’s push to promote a cashless economy and tighten oversight of foreign currency flows.
Under the revised rules, all foreign currency sale transactions to resident Pakistanis for deposit into foreign currency (FCY) accounts must now be executed via account-to-account transfer.
Individuals seeking to purchase dollars for deposit will no longer receive cash; instead, exchange companies will issue cheques or transfer funds directly to the buyer’s FCY account. Those without such accounts will be unable to buy cash dollars for deposit purposes.
Exchange companies clarified that the new policy does not affect the purchase of dollars for travel or other personal needs; however, buyers must now provide documentation, undergo biometric verification, and state a purpose for any cash purchase exceeding $500. Travelers, students, and religious pilgrims must submit complete paperwork to acquire larger amounts.
Industry representatives say the SBP’s move is likely to benefit bank-owned exchange companies, as the central bank has encouraged commercial banks to expand their own currency exchange operations. The new rules are expected to attract more customers to these outlets, thanks to the streamlined transfer process.
Currency experts warn that the changes could result in longer processing times for those buying euros or pounds, with cheque clearances for such transactions potentially taking up to 25 days if deposited in accounts at different banks. Even for dollar transactions, interbank transfers may require at least five days to clear.
Money changers have voiced concerns that the SBP’s directive prevents them from holding cash dollars in bank accounts, effectively limiting their ability to compete with bank-affiliated exchange companies.
