KARACHI: The State Bank of Pakistan (SBP) has decided to introduce ‘structural reforms’ in the Exchange Companies’ sector in order to provide “bring transparency and competitiveness” in the sector, ARY News reported on Wednesday.
According to a statement issued by the central bank today, the 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 state bank noted.
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 Rs200 million to Rs500 million.
The SBP also pointed out a transition process for exchange companies, their franchises, and category B exchange companies (ECs-B) to become mainstream ECs.
“ECs-B may graduate to exchange companies after meeting all regulatory requirements, within three months; otherwise, their license would be cancelled,” it added.
It added, “Franchisees of exchange companies may either merge or sell operations to the concerned franchiser company, within three months after meeting all regulatory requirements”.
The SBP concluded by saying that the ECs-B and Franchises of Exchange Companies will submit their conversion plan and seek NOC from SBP within one month.
It is pertinent to mention here that the caretaker government has announced the commencement of a crackdown against greenback smuggling following the identification of facilitators linked to government officials.
To combat dollar smuggling, hoarding, and organized crime, the caretaker government decided initiating a comprehensive crackdown.
The identification of facilitators and patrons among government officials has already taken place, and a list has been compiled for this purpose.
A day earlier, it was reported that the US Dollar (USD) rate dropped in the open market after an administrative crackdown and deployment of plain-clothed law enforcement personnel at exchange companies across the country.
Read More: Dollar smugglers to be dealt with iron fist in Pakistan
“The law enforcement personnel monitoring dollars’ sale and purchase in exchange companies,” secretary exchange companies body Zafar Paracha has said.
Plain-clothed law enforcement personnel have been deployed on the premises of exchange companies across the country.
“We had requested to the administration to deploy plain-clothed officials outside the exchange companies,” President Forex Association of Pakistan Malik Bostan stated. “Our members had complained that the black mafia agents giving headache to them,” he said.
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