In an effort to further enhance transparency and promote documentation in the foreign exchange transactions, the State Bank of Pakistan (SBP) has directed exchange companies that all foreign currency sale transactions worth USD 2,000/- or above (equivalent in other currencies) against PKR should now be conducted through official payment modes, such as bank transfer/cheques from the personal bank account of the customer.
This step intends at encouraging the general public to use different banking channels, which are usually more secure to fulfill their genuine foreign exchange needs.
The banking regulator reinforced the regime for exchange companies and stimulated customers to use banking channels for the purchase of foreign exchange from exchange companies.
Hence, the current regulations directing the scope of business of Exchange Companies have been amended which will be effective immediately.
Last week, SBP issued show-cause notices to eight banks due to their involvement in the currency manipulation which included Allied Bank Limited, Bank Al Habib, National Bank of Pakistan, Standard Chartered Bank, Habib Bank Limited, HabibMetro Bank, Meezan Bank, and the United Bank Limited.
According to the SBP governor, these banks had been issued show-cause notices because they quoted higher dollar rates to importers on some of the transactions and made significant profits.?The deputy governor of the State Bank of Pakistan stated that the situation was stressful, adding, The banks quoted very high rates on some of the transactions, which created more volatility and uncertainty.
We have been receiving requests for the opening of the LCs but are discouraging only those LCs where the nature of payments is in advance or the imports are not of essential nature, added SBP deputy governor.
He maintained that so far permission for nearly 8,000 LCs had been granted since the imposition of these restrictions.
The LCs are timely cleared and where possible, the banks in consultation with their clients, are availing the grace period of three to five days from the date of maturity of the LC, he added.