SBP restricts cash dollar sales, orders direct transfers to accounts

The State Bank of Pakistan has restricted cash dollar transactions, directing banks and exchange companies to transfer foreign currency directly into buyers’ accounts. The move aims to promote a cashless economy, the SBP said in a circular issued on Friday. According to a report by Dawn News.

Under the new rules, individuals purchasing dollars for deposit into foreign currency accounts will no longer receive cash. Buyers without such accounts will not be able to purchase cash dollars. If a cheque is issued for the transfer, it may take at least five days to clear, while transfers within the same bank are immediate.

Individual buyers cannot purchase more than $500 without providing a stated purpose, biometric verification, and supporting documents. Travelers, students, and those going for Haj or Umrah must submit full documentation for purchases exceeding $500.

Exchange companies noted that the circular benefits bank-owned outlets, allowing them to attract more customers, while independent money changers face operational limitations. Currency experts said transactions in euros or pounds will face longer delays, with cheques taking 20-25 days to clear if deposited in accounts at different banks.

Money changers added that they are restricted from holding cash dollars in bank accounts, forcing them to sell directly in the banking market, limiting their ability to compete with banks’ exchange companies.