KARACHI: Despite the government’s move to link all dollar transactions with Nadra, including a new facial-recognition requirement, exchange companies warn that loopholes for misuse will persist unless a centralised 1Link-style system is introduced to track buyers across the market.

The government and the State Bank have been introducing stricter controls in a bid to plug leakages amounting to hundreds of millions of dollars.

“In order to ensure uniform, consistent, enhanced security across identification and verification protocols, the Ministry of Interior and Narcotic Controls (MoI&NC) has directed to incorporate facial recognition, in addition to finger/thumb print, for biometric verification services obtained through Nadra,” said a notification issued to all exchange companies.

The dual-modality biometric verification will be required by the interior ministry with effect from Jan 1, 2026. “Exchange companies are advised to take necessary administrative and technical measures to ensure timely compliance with the above requirement,” the notification added.

However, exchange companies argue that even with facial recognition, the flight of dollars will continue unless a centralised 1Link-style system is created for buyers and sellers of foreign currency.

Buyers can still get excess dollars via repeated undertakings, Bostan says

“Nadra will get all information about dollar transactions after installation of the software in exchange companies, but it is not enough since a buyer can still purchase dollars from different exchange companies,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan.

He said a buyer could currently obtain extra dollars simply by signing an undertaking that they had not bought foreign currency from anywhere else. “This undertaking is not visible to other exchange companies, from where the same customer can buy more dollars by again giving the same undertaking,” he explained.

“I have asked the high-ups to establish 1Link like ATMs. Under that system, a buyer cannot purchase more from other exchange companies as the data will be available through this link,” Mr Bostan said, adding that he would formally write to the State Bank to request such a system.

He said there was so far no clarity on whether existing documentation requirements would continue after the Nadra system is installed. At present, a buyer must present their CNIC, travel documents and other relevant papers. Each exchange company already records biometric data and video of customers but retains this information in-house and does not share it, except that transactions are reported to the State Bank.

“We produce these evidences to the FIA if the agency requires them on a complaint against any customer,” Mr Bostan said.

He claimed that at least $1.1bn to $1.2bn had been bought this year, but that $700m to $800m of this remained untraceable, suggesting those funds may have been used for illegal activities. He insisted that such leakages could only be effectively plugged through a 1Link-style central system.

Published in Dawn, December 12th, 2025