Home Latest News State Bank Mandates Biometric Verification for Purchasing $500 or More

State Bank Mandates Biometric Verification for Purchasing $500 or More

by Newsweek Pakistan

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Central bank says measure aimed at curbing ‘undesirable’ outflow of cash and enhancing transparency of transactions by exchange companies

The State Bank of Pakistan on Wednesday announced a series of regulatory measures, including requiring biometric verification of anyone seeking to purchase $500 or more from the open market, to curb the outflow of cash and stem the rupee’s devaluation.

“These regulatory measures will help to improve documentation of sale of foreign currency by exchange companies and place a check on undesirable outflow of foreign currency,” read a statement issued by the central bank. It said that under the new restrictions, any person traveling to Afghanistan would not be allowed to carry more than $1,000 per visit, with a maximum annual limit of $6,000.

“Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to $500 and above and outward remittances,” it said. “This requirement will be applicable with effect from Oct. 22, 2021,” it added.

The apex bank had also mandated exchange companies to sell foreign currency and make outward remittances—of $10,000 and above—against receipt of funds through cheques or banking channels only.

Prior to the imposition of biometric requirement, any Pakistani could purchase dollars from exchange companies by providing a copy of their national identity card. Observers say the State Bank’s steps hope to stop the outflow of dollars from Pakistan into Afghanistan, as that had significantly increased dollar demands in the open market and destabilized the rupee’s exchange rate.

The central bank has, over the past few months, undertaken several steps in a bid to stem the spiraling devaluation of the Pakistani rupee, but has been unable to make much headway. The Pakistani rupee was trading at roughly Rs. 171 to the U.S. dollar in the open market on Thursday morning.

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