The State Bank of Pakistan (SBP) on Saturday permitted exchange companies to sell more than $500 to individuals on the production of biometric certification from the National Database and Registration Authority’s (Nadra) e-Sahulat outlets. The move was made temporarily to facilitate genuine buyers.
The central bank had instructed the exchange companies through a circular dated Oct 7 to carry out compulsory biometric verification from Oct 22 for all foreign currency sale transactions equivalent to $500 and above and outward remittances. However, due to the unavailability of the system used to connect with Nadra, the biometric verification requirement could not be implemented.
The decision was made in order to curtail dollar outflow, especially to Afghanistan after witnessing a sharp increase in demand which destabilized the exchange rate in the open market owing to media reports pertaining to the smuggling of millions of dollars to Kabul particularly after the Taliban took over.
Exchange Companies Association of Pakistan (ECAP) Secretary-General Zafar Paracha said, “The State Bank of Pakistan has allowed us to sell dollars with biometric certification from Nadra’s e-Sahulat franchises up to Nov 5”.
The Oct 22 SBP circular stated both A and B categories of the exchange companies may conduct the sale of foreign currency and outward remittances while adhering to the limits prescribed in the previous circular issued on Oct 7 on the biometric verification receipt in original generated through the Nadra e-Sahulat services up to Nov 5.
However, the exchange companies will be required to verify the genuineness of system-generated receipts from the website of Nadra e-Sahulat and maintain the copies of verification along with other required documents.
The circular stated, “After Nov 5, the exchange companies (A and B) will use the android-based application developed by Nadra for biometric verification”.
Paracha said that the selling of dollar on Saturday was higher than the previous days as the genuine buyers had been unable to get their required amount on Friday. He said, “Since Britain has resumed flights from Pakistan, hundreds of students are in need of dollars for education purposes”.
ECAP chairman Malik Bostan noted, “The SBP decision will help the market since the people who really need dollars will not go towards the black market”.
Bostan predicts dollar purchasing in the open market to go higher with the opening for students to fly to and from Britain. He added that the overall situation for trading in the open market is cool as the majority of the clients are sellers and only 10% are buyers.
Bostan added, “The sellers don’t need to go through the biometric procedure. The country doesn’t restrict the inflow of dollars”.
The SBP has issued new orders and restricted each person traveling to Afghanistan to carry a maximum of $1,000 per visit with an annual limit of $6,000. It further revised Prudential Regulations for Consumer Financing for moderating demand growth in the economy, resulting in slower import growth and thus supporting the balance-of-payments.
