The State Bank of Pakistan (SBP) has amended its regulations regarding purchase of foreign currency, binding all exchange companies to ensure that no individual shall buy foreign exchange of more than $10,000 per day and $100,000 per calendar year (or equivalent in other currencies) in the form of cash or outward remittances.
According to a circular issued on Sunday, the amendments have been introduced to improve “documentation and transparency and to further strengthen the foreign exchange regulatory regime” for both mainstream and small (category B) exchange companies.
The amendments have been made to instructions contained in para 9 of chapter 3 and para 12 of chapter 8 of the Exchange Companies’ Manual, which sets out the scope of business of exchange companies.
Under these amendments, all exchange companies must ensure that any individual shall not purchase foreign exchange of more than $10,000 per day and $100,000 per calendar year (or equivalent in other currencies) in the form of cash or outward remittances.
The SBP said these limits had been set considering the individual’s personal needs for foreign exchange.
However, a person can still send educational and medical expenses abroad worth up to $70,000 per calendar year and $50,000 per invoice from banks as per existing regulations.
If a person wants to send an amount exceeding these limits, they can approach the Foreign Exchange Operations Department of the SBP Banking Services Corporation through their bank.
In addition, the exchange companies shall now obtain supporting documents against the sale of foreign exchange exceeding $1,000 (or equivalent in other currencies) substantiating the purpose of the transaction. Besides, they must not perform transactions against authority letters.
The SBP circular further emphasised that the exchange companies “shall perform transactions only at authorised outlets of the company and shall not provide delivery services to the customers”.
There is no change in regulations with respect to foreign currency accounts of individuals.