Biometric authentication dramatically cuts flow of smuggled USD into Afghanistan
Mandatory biometric authentication for large cash withdrawals in U.S. dollars have caused the volume of dollar-buying on the open market to decline drastically, Dawn reports, possibly marking a victory in the battle against terrorism funding.
The new controls imposed by the State Bank of Pakistan to curb the flow of illicit funding into Afghanistan from between $7 million and $8 million daily to between $2 million and $3 million.
The market has also been chilled by attention from the country’s Federal Investigation Agency (FIA), according to the report. The SBP directive for the National Database and Registry Authority (NADRA) to implement biometric authentication came after Pakistan’s federal government instructed the FIA to intervene in the outflow of dollars across the Afghan border.
To purchase over $500, people in Pakistan can use NADRA’s e-Sahulat service, which checks the applicant’s biometrics against the NADRA database to issue a certificate used for the transaction, until November 5.
Currency traders suggested that while the changes have surely decreased the amount of money smuggled into Afghanistan, it would likely also drive currency trading to illegal markets.
The volume of foreign currency bought and them smuggled out of the country was contributing to instability in the value of the rupee.