SBP makes account-to-account transfers mandatory for foreign currency deposits

The State Bank of Pakistan (SBP) has revised regulations governing the sale of foreign currencies, directing exchange companies (ECs) to make account-to-account transfers mandatory for residents purchasing foreign currency for the purpose of depositing it into their foreign currency (FCY) bank accounts.

In a circular issued to exchange companies on Friday, the central bank referred to existing guidelines under Para 5, Chapter 7 of the Regulatory Framework for Exchange Companies (RFEC), noting that the instructions have now been amended.

“In order to promote cashless economy, it has been decided that, henceforth, all FCY sale transactions to resident citizens of Pakistan for the purpose of deposit into FCY account will be executed through account-to-account transfer,” read the circular

The above-referred Para of RFEC stands amended accordingly, it added.

Previously, exchange companies were allowed to sell foreign currency in cash even if the customer intended to deposit it into an FCY account, subject to ID verification, biometric requirements for $500 and above, and mandatory bank-funded PKR payments for FCY purchases of $2,000 or more.

Experts said that following the revision, money changers would not give cash for FCY deposits. “Now, they’ll transfer directly,” they said.

Commenting on the move, Syed Ali Imran, a corporate and investment banking professional, in his post on social media platform, noted that the regulation “betters traceability and AML controls” by shifting deposit flows entirely onto banking rails, “making source and destination easier to verify”.

Imran added that the measure will also support stronger macro-level monitoring. “Cleaner reporting of FX deposits helps macro surveillance and policy calibration,” he said, highlighting that reduced reliance on physical cash would simultaneously lower operational risks for exchange companies, including theft and reconciliation issues.

He described the shift as a step that “incentivises formal banking as it encourages customers to use bank accounts and electronic transfers, strengthening financial inclusion over time.”

However, the transition may pose short-term challenges.

“People without bank accounts or who rely on cash will face friction to deposit FX. Though this regulation is for account holders, which however it will now be through cross cheque,” he added.

The SBP instructed all exchange companies to ensure that the revised guidelines are communicated to relevant staff and implemented in full compliance.