KARACHI: Sept 6 : At a time when forex exchanges’ credibility is at the lowest ebb, the State Bank of Pakistan has decided to introduce structural reforms in the Exchange Companies’ sector and
as part of these reforms, leading banks actively engaged in foreign exchange business will establish wholly owned Exchange Companies to cater to the legitimate foreign exchange needs of general public.
Furthermore, various types of existing Exchange Companies and their franchisees will be consolidated and transformed into a single category of Exchange Companies with a well-defined mandate. In addition, the minimum capital requirement for Exchange Companies has been increased from PKR 200
million to PKR 500 million. The Exchange Companies of category ‘B’ (ECs-B) and franchisees of Exchange
Companies have been offered the following options to transform into mainstream Exchange
Companies:
ECs-B may graduate to Exchange Companies after meeting all regulatory requirements, within
three months; otherwise, their license would be cancelled.
Franchisees of Exchange Companies may either merge or sell operations to the concerned
franchiser company, within three months after meeting all regulatory requirements
For the above purpose, the ECs-B and Franchises of Exchange Companies will submit their conversion
plan and seek NOC from SBP within one month.
The above reforms have been introduced to provide better services to the general public and bring
transparency and competitiveness in the Exchange Companies’ sector. This is expected to strengthen
governance, internal controls, and compliance culture in the sector.
The agencies reports have disclosed that forex exchanges without any exception are engaged in Hundi These reports had resulted in hinting of bringing transparency in forex business by the army chief in Karachi.
SBP instead deleting forex exchanges mafia is going to give it a new form by allowing the banks to setup wholely owned forex exchanges. The question one should ask from SBP why it does not restrict forex exchange business through authorised banks?.
