KARACHI: The Federal Investigation Agency (FIA) Commercial Bank Circle has arrested two suspects in a targeted operation against an alleged illegal foreign currency exchange and hawala network.
Deputy Director Fahad Khwaja confirmed the arrests of Faisal Abu Bakar and Ali Raza during the raid.
Authorities recovered significant amounts of undeclared foreign and local currency from the suspects. The seized items include 44,000 US dollars, 45,000 UAE dirhams, and 5.4 million Pakistani rupees.
Initial investigations have uncovered suspicious transactions worth nearly one billion US dollars linked to the network. The probe points to systematic violations of foreign exchange regulations and anti-money laundering laws.
The suspects were allegedly involved in forwarding, clearing, and unauthorised currency exchange activities. Deputy Director Khwaja stated that both individuals had been engaged in these illegal operations for the past three to four years.
Further questioning revealed their involvement in hawala and hundi systems for the purchase and sale of foreign currency outside official banking channels. Evidence also emerged of their connections to individuals in Dubai, China, and Malaysia.
FIA officials described the operation as part of a broader crackdown on illicit financial flows that undermine Pakistan’s banking sector and foreign reserves. Such networks often facilitate capital flight, tax evasion, and potential terror financing channels, though no direct links to terrorism were mentioned in initial briefings.
The Commercial Bank Circle team acted on specific intelligence regarding large-scale unauthorised transactions routed through commercial banking facilities. The suspects reportedly used legitimate-looking forwarding and clearing businesses as fronts for currency trading.
Pakistan’s foreign exchange reserves have remained under pressure in recent years, with the State Bank of Pakistan repeatedly emphasising strict enforcement against illegal transfers. Unofficial estimates by economic observers suggest billions of dollars leave the country annually through hawala and similar informal systems, affecting the current account balance and rupee stability.
Market sources in Karachi’s financial circles noted that such operations typically target exporters, importers, and overseas Pakistanis seeking faster or undocumented transfers. The recovered 44,000 USD and 45,000 dirhams represent a fraction of the total suspected volume, officials believe.
The FIA has initiated further tracing of transaction beneficiaries and facilitators. Deputy Director Khwaja said teams are examining digital records, bank statements, and communication data to identify the full extent of the network.
Legal proceedings against the arrested individuals have commenced under relevant provisions of the Foreign Exchange Regulation Act and Prevention of Money Laundering Act. Both suspects are in FIA custody and will be produced before a court for remand.
This operation comes amid heightened regulatory scrutiny on currency dealers and exchange companies across major cities. The State Bank of Pakistan has in recent months tightened licensing requirements and monitoring of outward remittances.
Analysts suggest that continued FIA actions of this nature could help reduce the parallel economy and strengthen official remittance channels, which remain a critical lifeline for Pakistan’s external account. Remittances from overseas Pakistanis exceeded 30 billion dollars in recent fiscal years, but leakages through informal routes continue to pose challenges.
The FIA indicated that investigations remain active, with possible further arrests expected as more facilitators are identified. Officials have appealed to the public and business community to use only authorised banking and exchange channels for foreign currency transactions.
Future phases of the probe may examine potential links to larger international networks operating between the UAE, East Asia, and Pakistan’s port city.