Forex inflow through ‘hundi’ goes unchecked: Earthquake victims
By Shahid Iqbal
KARACHI, Oct 19: Inflow of foreign exchange coming through illegal channels –- hundi or hawala — for the support of earthquake victims is not being checked, said an official source at the State Bank.
He said that banks were well-equipped with checking system ‘Swift Code’ installations but the inflows through ‘hundi’ could not be checked despite strict money laundering laws in the country.
The official maintained that the money laundering laws were being adhered to despite an emergency situation currently prevailing in the country. However, the official admitted there were no options available with the banks to check inflow of forex through hundi or hawala.
He said that there were no special instructions from the government to further tightening of laws to prevent illegal transactions of foreign exchange. After the earthquake, remittances through banking channel and illegal hundi or hawala started increasing and it was feared that the foreign exchange flows which became a very sensitive issue after 9/11 could crop up again.
“But the situation is so pathetic in the north of Pakistan that nobody would like to raise these questions at the moment,” said the SBP official.
Both the banks and exchange companies said that the inflow of dollars from overseas Pakistanis, to support their quake-affected brethren, had picked up and they expected that it would increase further.
Banking sources said that remittances from Middle East, the United Kingdom and United States had increased and the month of Ramazan might witness more inflows. Traditionally the inflows remain higher during this month but the earthquake was an additional factor for higher inflows, they added.
During the first quarter (July-Sept) of this fiscal overseas workers remitted more than $1 billion.
“The number of individuals selling foreign currencies has increased. In my observation overseas Pakistanis are sending money to help people affected by the earthquake,” said Amir Abbas, a currency dealer at Saddar area.
Anwar Jamal of a leading exchange company also confirmed that remittances had increased but it did not have any impact on exchange rates. The greenback remained stable in both inter-bank and open market. On Wednesday the US dollar traded at Rs60.10 to a dollar in the kerb market and in the inter-bank it stood at Rs59.72.
“Remittances through hundi remained higher during the last five days mostly coming from Middle East and Canada,” said a currency dealer. He said that for the last couple of years restrictions on money transfer had become easier the world over. He said delivery of money at home was safer and added that despite low margin of profit the business was flourishing.
