Foreign Currency Purchase Limits for Individuals in Pakistan

By DTD- On Dec 30, 2024

ISLAMABAD: Exchange Companies are allowed to sell foreign currency to individuals by a maximum of up to $10,000 per day and USD 100,000 per annum or equivalent to any other currencies subject to compliance with regulatory requirements.

The company will obtain an undertaking from the customer, at the time of each transaction, that the customer has not already reached the daily and yearly limits and these limits will not be breached after the current transaction.

The company will ensure, through the placement of appropriate checks in their information systems, that the above limits are not breached at their company’s level, according to the “Regulatory Framework for Exchange Companies (RFEC) issued by the State Bank of Pakistan (SBP).

For all transactions, the Exchange Company will retain a copy of the identification document (in physical or digital form) i.e. Computerized National Identity Card (CNIC), National Identity Card for Overseas Pakistanis (NICOP), Pakistan Origin Card (POC), Passport (having valid visa on it or any other proof of legal stay of a foreigner in Pakistan) as the case may be; after having seen the original document.

For all transactions equivalent to USD 500 or above, the company will carry out biometric verification of Pakistani Nationals and maintain the record thereof. The company shall obtain an original online Verisys slip issued by NADRA, in case the biometrics of any individual cannot be verified by NADRA. For all transactions equivalent to USD 1,000 or above, the company will record the purpose of the transaction and obtain supporting documents. The company shall also record the source of funds.

For all transactions equivalent to USD 2,000 or above, the company will receive contra credit in PKR through bank transfer or cheque from the personal account of the customer. The transaction or instrument reference number and the name of the bank transferring funds or issuing the instrument will be mentioned on the transaction receipt along with the identification document number of the customer.

The company may purchase foreign currency from individuals in a “Ready” value date only. Where the transaction is equivalent to USD 2,500/- or above, the Company will retain a copy of the identification document i.e. Computerized National Identity Card (CNIC), National Identity Card for Overseas Pakistanis (NICOP), Pakistan Origin Card (POC), Passport (having valid visa on it or any other proof of legal stay of a foreigner in Pakistan), as the case may be.

Outward Remittances

The Company is authorized to effect outward remittances only on personal accounts of individuals i.e. personal financial transactions. The Company is not allowed to effect any outward remittances on account of trade and commercial transactions of any nature including payments against services, commission, etc., whether on account of individuals or on behalf of corporate clients.

The Company can effect outward remittances up to 75 percent of the inward home remittances mobilized by it during the preceding month.

Paid-up apital

SBP has increased the minimum paid-up capital value of the Exchange Companies from Rs. 500 million to Rs. 1 billion. In September 2023, the paid-up capital was increased from Rs. 200 million to Rs. 500 million. A capital deficient Company is required to meet the shortfall of Rs. 600 million by December 31, 2025, Rs. 800 million by December 31, 2026, and Rs. 1 billion by December 31, 2027. The State Bank of Pakistan (SBP) has undertaken a comprehensive review of the existing regulatory instructions.

The updated framework elaborates corporate governance structures, sets forth internal controls & IT systems requirements, and strengthens the supervisory & enforcement regime.

Further, it updates reporting requirements and provides a single, unified source of regulatory guidance for the Exchange Companies. The framework will replace the existing Exchange Companies Manual and will become effective from January 01, 2025. In order to ensure full compliance with the attached framework, ECs will formulate and align their policies, procedures, and systems by June 30, 2025.