• Makes account-to-account transfer mandatory for dollar deposits
• Individuals no longer allowed to buy cash dollars from open market

KARACHI: The State Bank of Pakistan (SBP) has decided to limit cash dollar transactions and instructed banks to transfer dollars directly into the accounts of the purchasers. Exchange companies, however, said the decision will not affect the purchase of dollars for travel or other purposes.

The SBP issued a circular with amended instructions related to foreign currency transactions for individuals. “In order to promote cashless economy, it has been decided that, henceforth, all FCY (foreign currency) sale transactions to resident citizens of Pakistan for the purpose of deposit into FCY account will be executed through account-to-account transfer,” the SBP circular stated.

Exchange companies explained that the move means individuals buying dollars for deposits will no longer receive cash; instead, the amount will be transferred directly to their accounts. Those without foreign currency accounts will not be able to buy cash dollars.

“If you buy dollars from an exchange company for deposit in an FCY account, the company will issue a cheque of that amount, which will be deposited in the FCY account of the bank,” said the owner of an exchange company.

If a buyer receives a cheque from an exchange company, it will take at least five days for clearance when deposited into the FCY account. However, if the buyer has an FCY account in the same bank as the exchange company, the dollars will be transferred immediately.

There are restrictions for individual buyers: they cannot purchase more than $500 without providing the purpose, biometric verification and supporting documents. Travelers, students and individuals going for Haj or Umrah must provide complete documentation to buy over $500.

“Now, an exchange company cannot sell even $500 cash to any individual without stating the purpose,” said an exchange company representative.

Independent exchange companies said the circular will benefit bank-owned exchange companies, as the SBP has been encouraging banks to open their own outlets. The new rules will help banks’ exchange companies attract more customers.

Currency experts said individuals buying euros or pounds will face longer delays. Any euro or pound purchased from an exchange company will be issued via cheque, which will take 20-25 days to clear if deposited in the buyer’s FCY account.

“Even if you buy foreign currency from a bank’s exchange company, but your FCY account is in another bank, the transaction will take at least five days,” a currency expert said.

Money changers said the SBP circular prevents them from holding cash dollars in banks’ accounts, meaning they will have to sell directly in the banking market. “We could perform the same transactions as banks’ exchange companies, if we were allowed to hold dollars in our bank accounts,” said another money changer.

Published in Dawn, November 16th, 2025