State Bank makes it mandatory to show National ID card for transactions above $500

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May 23, 2018
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State Bank of Pakistan (SBP) made it mandatory for exchange companies to ensure identification of the person who is engaged in a foreign currency transaction of above $500 for the purpose of buying and selling.

According to the new instructions, exchange companies have to demand National Identity card (NIC), National Identity Card for Overseas Pakistanis (NICOP) passport of the person that is making a dollar transaction.

The decision has been taken to combat money laundering and terror financing issues as Financial Action Task Force is all set to Pakistan in its grey list in June as they see country’s financial system to be at a risk of money laundering and terror financing cases. Prior to this, up to $2500 transactions were allowed without identity proof.

Last month, Central bank of Pakistan stated that use of cryptocurrency in transactions is not recognized as legal.

Virtual currencies give an edge of anonymity to the person who is using it for transactions and hence cryptocurrency can be used easily for any illegal activity.

According to external relations department at top Financial authority, it would be unwise to indulge in any digital currency transaction or investment as there is unpredictable price fluctuation, increased risk of hacking and cybersecurity issues and their closure can put you in a loss.

Exchange companies believe that this new ruling should apply to the buyers of dollars from the market whereas they should be permitted to purchase dollars without any restriction.

In an interview to Dawn news, Malik Bostan, President Forex Association of Pakistan said, “We are ready to support the country. Whatever we can do but we have requested the central bank to hear our grievances related to this decision.”

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