Key Points:
- Government mandates facial recognition for all dollar transactions from Jan 1, 2026
- Exchange firms warn leakages will persist without a centralised 1Link-style tracking system
- Buyers can still obtain excess dollars by visiting multiple exchange companies
- Industry estimates $700–800m in untraceable purchases this year alone
- Firms urge the State Bank to create a real-time verification network to curb misuse
KARACHI: Pakistan’s exchange companies have warned that the government’s latest biometric controls—linking all dollar purchases to Nadra and adding mandatory facial recognition from January 2026—will still fail to plug massive leakages unless a centralised, real-time 1Link-style tracking system is introduced.
Despite the government’s decision to route all dollar transactions through Nadra’s biometric system, including newly mandated facial recognition, exchange companies have cautioned that loopholes will remain without a centralised mechanism to track buyers across the entire market.
The government and the State Bank of Pakistan have recently tightened identification and verification protocols in an effort to curb leakages estimated at several hundred million dollars annually, according to Dawn.
According to a notification issued to all exchange companies, the Ministry of Interior and Narcotics Control has directed the incorporation of facial recognition—alongside fingerprint and thumbprint verification—into Nadra’s biometric services.
The dual-modality system will become mandatory from Jan 1, 2026, and exchange firms have been instructed to make the necessary technical preparations.
However, industry leaders argue that the additional layer of biometric security will not prevent individuals from purchasing excess dollars by visiting multiple exchange companies.
“Nadra will receive all information once its software is installed in exchange companies, but this alone cannot stop repeated buying,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP).
He explained that a customer can still obtain extra foreign currency by signing undertakings at different outlets, since these declarations are not visible to other companies. “A buyer can claim at each counter that they have not bought dollars elsewhere, and no system exists to verify this,” he said.
Bostan urged authorities to create a 1Link-like centralised platform—similar to the interbank ATM network—that would instantly flag previous purchases and prevent over-buying. He said he plans to formally request the State Bank to establish such a system.
Uncertainty also persists over whether existing documentation rules will remain in place once Nadra’s system is implemented. Currently, buyers must present their CNIC, travel documents and other paperwork. While exchange firms already record customer biometrics and video footage, this data is kept in-house and shared only with the State Bank or, when required, the FIA.
Bostan claimed that an estimated $1.1–1.2 billion had been purchased through exchange companies this year, but $700–800 million of that remained untraceable—funds he suggested may have been used for illicit purposes. He maintained that only a centralised verification system could effectively eliminate such leakages.
