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Senate Committee Probes Dollar Outflows on Visa Debit Card Transactions
Senate Finance Committee raises concerns over dollar outflows via Visa debit cards. Chaired by Senator Saleem Mandviwala, committee demands bank reports and hints at potential legislation.
ND
by News Desk
2025-01-06
Senate Committee Probes Dollar Outflows on Visa Debit Card Transactions

The Senate Standing Committee on Finance has directed all banks to provide detailed reports on dollar outflows linked to Visa debit card transactions. The decision was made during a meeting chaired by Senator Saleem Mandviwala on Monday, which focused on curbing unnecessary dollar outflows amidst the country’s ongoing economic challenges.

Key Issues Raised

During the meeting, Senator Saleem Mandviwala questioned whether the outflows on Visa debit cards had gone unnoticed. He highlighted concerns over transactions where local currency payments appeared to be contributing to dollar outflows.

“Our total outflow on cards last year was $1.4 billion, which has now been reduced to $800 million after we capped foreign usage at $30,000 per year,” said the Governor of the State Bank of Pakistan (SBP).

The Chairman of the committee, however, emphasized the issue of outflows on local currency transactions, citing examples where deductions from debit cards seemed to flow to Visa systems abroad.

Breakdown of the Discussions

  • Senator Mandviwala’s Concerns: The senator claimed that significant amounts, like the Rs. 6,000 deducted from his debit card, appeared to flow to Visa.
  • SBP’s Response: The SBP Governor clarified that such deductions are bank fees, not dollar outflows. ATM transactions, for instance, involve local bank fees, not foreign currency transfers.
  • Potential Misconceptions: The SBP denied claims that $1 billion could be withdrawn annually in dollars through Visa cards.

Legislative Implications

Senator Mandviwala expressed concerns that the current oversight might not be sufficient to address these outflows. “If no action is taken to curb such outflows, we may have to consider legislation,” he said, hinting at stricter regulatory measures in the future.

Background

The issue arises amidst Pakistan’s efforts to stabilize its economy and control the use of foreign exchange reserves. With $800 million in annual dollar outflows on debit card transactions, the government aims to prevent further pressure on its reserves while ensuring transparency in financial transactions.

Next Steps

The committee has sought comprehensive data from banks on the specifics of these transactions. Observers believe that this scrutiny could lead to new regulations or legislation aimed at controlling foreign exchange outflows and enhancing transparency in banking systems.
Tagged:

PakistanEconomy

SenateFinanceCommittee

DollarOutflows

VisaTransactions
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