ISLAMABAD / QUETTA: With the campaign against the dollar hoarding and money laundering gaining momentum, the Federal Investigation Agency (FIA) on Thursday raided four currency exchange outlets in Islamabad and Quetta and seized currency notes worth millions of rupees.

Informed sources said FIA teams raided two outlets running without licence in Islamabad and seized their records, foreign currency and millions of rupees in cash.

The seized foreign currencies included American and Australian dollars, euros, pounds, UAE dirhams, Qatari riyals and Chinese yuans.

Criminal proceedings have been initiated against owners of the illegal currency exchange business offices located in F-10 Markaz and Blue Area.

The raid was just the latest in a series of similar actions targeting currency changers and illicit money transfer services and is aimed at curbing money laundering and related activities. On April 12, the FIA had seized Rs420m form hundi and hawala dealers in Karachi.

“Another major exchange company, similar to Khanani and Kalia International (KKI), is operating out of Dubai,” an FIA official had said at the time, adding that the owner of the said company goes by his alias, ‘Rangila’.

The now defunct KKI was one of the largest and most sophisticated exchange companies in Pakistan. It was said to have run a parallel money transfer system for transferring money out of the country through illegal hundi and hawala channels.

On April 10, the FIA had arrested one suspect in Rawalpindi and seized foreign currency. An FIR was registered against the money changer and an investigation launched. In a similar crackdown the same day, an FIA team had impounded a vehicle from Peshawar Road in Rawalpindi and recovered foreign currency worth Rs2.4m from it.

On April 7, FIA had seized currency worth Rs40m and arrested three people in Lahore. Six teams of FIA were constituted which carried out raids simultaneously at all money exchanges in Lahore and inspected their records.

The information minister Fawad Chaudhry had announced earlier this month on Twitter that “a full-fledged operation against dollar hoarding and speculative currency trade” would be launched by the FIA, as signs of panic started appearing in foreign currency markets after the US dollar touched Rs148 in open trading.

A spokesperson for the State Bank of Pakistan (SBP) had then said that there was no law to arrest any person for buying dollars or keeping foreign exchange as investment, but if any institution was found involved in currency hoarding to manipulate the exchange rate, it could be investigated.

“We have a mechanism with the FIA to probe a case if there is any violation of banking laws and the SBP can ask FIA to investigate such violations,” he had added.

In Quetta, FIA officials raided two currency exchange outlets in Kandhari Bazaar for allegedly being involved in creating an artificial shortage of US dollars. They arrested two dealers and seized currency notes worth millions of rupees.

The two currency exchange outlets were also allegedly involved in hawala and hundi business.

Speaking at a press conference later, Director of FIA Quetta Altaf Hussain said that the seized currency included 50m Pakistani rupees, 58,000 US dollars, 34,000 Saudi riyals, 41,000 UAE dirhams and Afghan, Indian and Australian currency notes.

He identified the arrested currency dealers as Habibullah and Shah Wali. He said the record of the two currency exchange outlets had been taken into custody.

Mr Hussain claimed that these outlets had created an artificial crisis by vanishing US dollars from the open market.

He said one of these companies had 18 offices and six of them had been shut down.

Published in Dawn, April 19th, 2019