Amid the presence of a grey market of the dollar, the State Bank of Pakistan (SBP) on Wednesday decided to introduce structural reforms in order to bring “transparency” in the 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”, a press release issued by the central bank stated.
Under the reforms, various types of existing exchange companies and their franchises will be consolidated and transformed into a single category of “Exchange Companies” with a well-defined mandate.
Moreover, the minimum capital requirement for exchange companies has been increased from Rs200 million to Rs500 million.
Here are the Exchange Companies reforms
• ECs-B may graduate to Exchange Companies after meeting all regulatory requirements, within three months; otherwise, their license would be canceled.
• 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 a no-objection certificate (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 SBP stated.