RIZWAN BHATTI

KARACHI: The State Bank of Pakistan (SBP) has restricted Exchange Companies from movement of Pak rupee between the cities through company’s own transportation.

According to FE Circular No. 05 of 2018, issued Friday, Exchange Companies should ensure that only bank accounts are used for movement of PKR between cities.

The SBP has also asked for proper documentation of inland currency transportation to further strengthen the Anti-Money Laundering and combating the Financing of Terrorism (AML/CFT) regulatory requirements.

The SBP has directed Exchange Companies to develop and implement Standard Operating Procedures (SOPs) for movement of Pakistan Rupee (PKR) and Foreign Currencies (FCY), duly approved by their Board of Directors. As per Exchange Companies Manual 2017, all exchanges companies (ECs) including ‘B’ category are required to have proper documentation of all business transactions and activities.

According to a circular, in order to further strengthen the AML/CFT regulatory requirements for documentation and record keeping, it has been decided that, henceforth, while carrying out transactions requiring movement of Pakistani Rupees (PKR) and Foreign Currency (FCY) within company’s authorized network, with other ECs and banks shall ensure proper documentation.

As per SBP directives, all ECs are required to conduct the exchange business only from such premises as approved by the State Bank.

The purpose for the movement of cash PKR and FCY shall be properly documented and recorded, after necessary authorization in system on real time basis by the head office and only bank accounts shall be used for movement of PKR between the cities, it added.

The movement of cash PKR (within a city) and FCY (across Pakistan) to be undertaken only by the authorized employees in company’s owned vehicles, through air transit or by Cash-in-Transit Company.

The movement of cash PKR and FCY by the franchises of ECs will be processed under the permission from the head office of respective EC and such movement of cash PKR and FCY shall be documented in their system, SBP said.

The movement of cash PKR and FCY by the franchises will only be carried out by the authorized individuals, who have been registered with and authorized by the respective Franchiser.

The SBP said that during the movement of cash PKR and FCY, the system generated vouchers or receipts along with the authority letter shall be available with authorized employee (s)/registered individuals (for franchises) or Cash-in-Transit Company.

The documentary evidences of travel of authorized employees/registered individuals (for franchises), including tickets issued in their names or receipts issued by Cash-in-Transit Company shall be maintained by exchange companies.

In case of cash PKR or FCY withdrawals from banks, the copy of cheque, duly authenticated by the authorized staff of the relevant EC’s branch/franchise/head office, shall be carried by the authorized employee(s)/registered individuals (for franchises) or Cash-in-Transit Company.

ECs will maintain the record of all transactions relating to movement of Pakistani Rupees (PKR) and Foreign Currency (FCY) which will be examined during the course of on-site examinations. Any movement of cash PKR and FCY in violation of abovementioned instructions will be deemed unauthorized and illegal.

The SBP has warned that failure to comply with these instructions will attract regulatory and legal action under the relevant provisions of Foreign Exchange Regulation Act, 1947.