*ISLAMABAD: *The State Bank of Pakistan (SBP) has clarified that there wasno change in instructions regarding the purchase of foreign currency notesby banks.
In a statement issued on Monday, the SBP stated that the foreign exchangepolicy and its operations in Pakistan are formulated and regulated inaccordance with the provisions of Foreign Exchange Regulations Act, 1947(FERA).
For the purpose of ensuring compliance with the provisions of the act,instructions to banks are issued in the form of notifications, circularsand circular letters, the statement read, adding that theseinstructions/circulars etc. are made part of the Foreign Exchange Manual.
“SBP is in process of revising the Foreign Exchange (FE) Manual in a phasedmanner. In this respect, seven chapters (1, 2, 3, 4, 5, 7 & 20) of FEManual have been revised and circulated through FE Circular, dated November29, 2018, in the first phase. In phase II, three chapters (8, 9 & 11) havebeen revised through FE Circular No. 03 of 2019, dated July 16, 2019,” theSBP stated.
It further noted that one of these revised chapters, 11, includesregulations on ‘Dealings in Foreign Currency Notes and Coins etc. by theAuthorized Dealers (banks)’.
“With respect to revised Chapter 11, it has come to our notice that thereare some confusions/ misinterpretations regarding Para 2 suggesting thatSBP has allowed the banks to sale/ purchase foreign currencies to/frompublic by amending the regulations.
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“In this regard, it is clarified that no such amendment has been made. Itwould be pertinent to mention here that even before the recent revision inChapter 11, every authorized branch was permitted to deal in foreigncurrency notes, coins, deposits, credits, drafts, traveller’s cheques,letters of credit and bills of exchange, expressed or drawn in Pakistancurrency but payable in any foreign currency.
“Since Chapter 11 of the FE Manual specifically governs regulationsregarding dealings in foreign currency notes and coins etc. by theauthorized dealers, therefore, the instructions related to sale/purchase offoreign currency notes have been added in chapter 11 with emphasis onauthorized dealers regarding compliance with AML/CFT regulations.”
The existing instructions issued by SBP, vide Notification No.F.E.1/2012-SB dated 16th June 2012, regarding currency declaration to theCustoms authorities by the inbound travellers on an amount exceeding$10,000, or equivalent in other currencies, have also been incorporated inrevised Chapter 11, the SBP concluded.
