Attention of the Exchange Companies (ECs) and Exchange Companies of ‘B’ Category (ECs – B) is invited to Para 1 (iii) Chapter 6 of Exchange Companies Manual 2017 in terms of which they are required to have proper documentation of all business transactions and activities.

In order to further strengthen the regulatory AML/CFT 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/ECs – B and Banks, ECs and ECs – B shall ensure as under:

1. Each outlet of ECs and ECs – B shall be allocated working capital keeping in view the business needs by the head office of the respective exchange company.
   
   
2. ECs and ECs – B shall conduct the exchange business only from such premises as approved by the State Bank. ECs and ECs – B shall not provide delivery services to the customers.
   
   
3. 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.
   
   
4. Only bank accounts shall be used for movement of PKR between the cities.
   
   
5. The movement of cash PKR (within a city) and FCY (across Pakistan) shall be undertaken only by the authorized employee(s) in company’s owned vehicles, through air transit or by Cash-in-Transit Company.
   
   
6. The movement of cash PKR and FCY by the franchises of ECs shall 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.
   
   
7. The movement of cash PKR and FCY by the franchises shall only be carried out by the authorized individuals, who have been registered with and authorized by the respective Franchiser.
   
   
8. 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.
   
   
9. The documentary evidences of travel(s) of authorized employee(s) / registered individuals (for franchises), including tickets issued in their names or receipts issued by Cash-in-Transit Company shall be maintained by ECs and ECs – B.
   
   
10. 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.
    
    

Exchange Company shall develop and implement Standard Operating Procedures (SOPs), duly approved by their Board of Directors, in light of the above instructions. The SOPs shall, at the minimum, cover all the guidelines attached at Annexure-I.

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

All other instructions on the matter shall remain unchanged.

Failure to comply with the above instructions shall attract regulatory and legal action under the relevant provisions of Foreign Exchange Regulation Act, 1947.


Encl: As above