Foreign Exchange Companies
KARACHI/ISLAMABAD: State Bank of Pakistan has decided to introduce structural reforms in the Foreign Exchange Companies’ sector.
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.
SBP allows banks to establish Exchange Companies to discourage smuggling and hoarding of dollars.
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 (MCR) 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.
Caretaker govt launches crackdown against smugglers: SBP allows banks to set up foreign exchange companies
Meanwhile, the caretaker government has launched a nationwide crackdown against smugglers and hoarders.
The government teams have seized Afghanistan-bound trucks laden with sugar. The sweetener was to be smuggled to Afghanistan.
In recent weeks, the value of the US dollar, sugar, flour, and some other items has soared substantially. The government has linked all this mess with smuggling and hoarding.
Therefore, according to the Interior Minister Sarfaraz Bugti, the government has initiated an action throughout the country. He said that the government agencies have already identified smugglers and hoarders.
During the ongoing crackdown, the people involved in smuggling and hoarding will be arrested.
