KARACHI, July 8: The State Bank of Pakistan has bound exchange companies to take prior permission for all transactions of $50,000 and above.

The SBP issued a circular to this effect on Tuesday apparently to get some control over fast eroding value of rupee.

“It has been decided that the exchange companies will be required to take prior approval of the State Bank for all transactions of $50,000 or above (or equivalent in other foreign currencies) on account of outward remittances or sale of foreign currencies to the customers,” said the circular.

The SBP said the decision was taken to further strengthen monitoring mechanism of transactions made through the exchange companies.

However, this requirement will not be applicable on sale of foreign currency to the banks or exchange companies.

The exchange companies were advised to forward their related requests to the SBP along with complete details of the transaction, including particulars of the customer like name, address, CNIC, amount and purpose of the transaction.

“Failure to comply with the above instructions will attract severe regulatory action under related rules and regulations,” said the SBP circular.

Same rule will be applied to ‘B’ category exchange companies.