Cabinet Panel Approves Forex Regulation Bill
The Cabinet Committee for Disposal of Legislative Cases has approved the forex regulation bill, clearing an update to the law that governs foreign exchange in Pakistan.
The committee, chaired by Federal Minister for Law and Justice Senator Azam Nazeer Tarar, gave its approval at a meeting in Islamabad on Friday. Senior officers of the relevant ministries and departments attended the meeting.
The bill revises the legal framework that sets penalties and financial fines for violations relating to foreign exchange. The Express Tribune reported that the committee reviewed the proposed changes before approving the bill.
What the forex regulation bill changes
The Foreign Exchange Regulation (Amendment) Bill 2026 amends the Foreign Exchange Regulation Act, which has governed foreign currency dealings in Pakistan since 1947. The State Bank of Pakistan administers the law, which sets the rules for buying, selling and moving foreign currency in and out of the country.
The amendment updates the penalties and fines that apply when those rules are broken. The full text of the changes has not been published yet, and the bill must still pass through the federal cabinet and parliament before it becomes law.
Clearer penalties matter because foreign exchange violations can drain reserves and distort the currency market. Pakistan’s foreign exchange reserves stood at $21.52 billion at the end of October, according to the State Bank, and the government has worked to rebuild them under its IMF programme.
The rupee has steadied in recent weeks, gaining ground against the dollar. A firmer penalty framework gives the central bank and investigators clearer ground when they act against illegal currency trading.
Other decisions from the meeting
The committee also approved a legal and administrative package that moves plant protection functions to NAFSA. It approved a proposal on leave prior to retirement in the Armed Forces, including payment in place of the unavailed portion of such leave.
UrduPoint reported that the committee deferred the draft Press Council of Pakistan Act 2026 for further consultation. The draft law will return to the committee after the relevant ministries complete their review.
The committee also approved replacing references to the Federal Government with the names of the relevant competent authorities in laws administered by the Securities and Exchange Commission of Pakistan.
Why the bill matters for trade and banks
Foreign exchange rules touch every part of Pakistan’s trade. Exporters bring in dollars, importers pay them out, and banks handle the transactions in between. Pakistan’s banks reported profits of Rs505 billion in the first nine months of 2026, a slight fall from a year earlier, and they handle most foreign exchange transactions for businesses.
Pakistan reaffirmed a $5 billion bilateral trade target with Turkiye this week, with more Turkish investment sought in special economic zones. Trade on that scale needs clear rules on how foreign currency moves, and penalties that match the size of the market.
The government has also cut its domestic debt, which fell to Rs57.7 trillion in the July-September quarter, as it works to steady public finances. The forex bill fits the same drive: tighter rules, clearer penalties and steadier reserves.
Frequently asked questions
What is the Foreign Exchange Regulation (Amendment) Bill 2026?
It amends the legal framework that sets penalties and financial fines for violations relating to foreign exchange in Pakistan.
Who approved the bill?
The Cabinet Committee for Disposal of Legislative Cases, chaired by Law Minister Azam Nazeer Tarar, approved it at a meeting in Islamabad on Friday.
What else did the committee approve?
It approved a package moving plant protection functions to NAFSA and a proposal on leave prior to retirement in the Armed Forces, including payment in place of unavailed leave.
Why was the Press Council bill deferred?
The committee deferred the draft Press Council of Pakistan Act 2026 for further consultation with the relevant ministries.
What happens next?
The bill moves to the federal cabinet and then to parliament, where it must pass before it becomes law.
