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SBP Announcement: CNIC not needed for sub-$5000 foreign exchange deals

KARACHI (February 11 2010): The State Bank of Pakistan (SBP) on Wednesday announced that sellers and buyers of foreign exchange up to $5000 will be exempted from providing computerised national identity card (CNIC). Earlier, the SBP had stated that all transactions at exchange companies must be reported to SBP on the same day, and CNIC be obtained from all clients.

The condition of CNIC was hurting the licence holder exchange company business, besides reducing the inflow of foreign currency in the regular channel. However, on Wednesday the central bank clarified that it has not imposed restriction of CNIC on all foreign exchange transactions, and asked the exchange companies to obtain CNIC only on foreign exchange transactions equivalent to 5,000 dollars or more.

The decision was taken during a meeting between representatives of Exchange Companies Association of Pakistan (ECAP) and the State Bank of Pakistan held at SBP head office on Wednesday. The meeting was attended by ECAP Chairman Malik Bostan, Haji Haroon of H & H exchange, FIA director Muazzam Jan and director foreign exchange Samar Husnain.

The SBP also assured the representatives of exchange companies that the central bank would fulfil the daily dollar and other foreign exchange requirements of the exchange companies to stabilise the rupee. However, it said that daily reporting of all transaction was compulsory.

Regarding exemption of 0.3 percent withholding tax on cash withdrawals from exchange companies' bank accounts, the central bank assured them that soon a meeting between Federal Board of Revenue and exchange companies would be arranged to solve the issue.

During the meeting, the SBP instructed the exchange companies to minimise gap between interbank and open market dollar rate so that it should not be higher than Rs 0.50. The representative of exchange companies assured the SBP and FIA that they would make all efforts to stabilise the rupee.

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