SBP suspends permit of exchange company

KARACHI: The State Bank of Pakistan (SBP) has suspended the permit of an exchange company, ARY News reported. 

As per details, the permit of the Royal International Exchange Company was suspended by State Bank of Pakistan (SBP).

The step was taken by SBP over the exchange company’s violation of rules and regulations.

Earlier, United Bank Limited (UBL) announced to establish its own exchange company. As per details, the announcement came after the Board of Directors (BoD) meeting approved the “establishment of an EC with Rs1 billion as initial paid-up capital, as a wholly-owned subsidiary of UBL”.

The establishment of exchange companies by bank have started after the ban on B-category exchange companies and the SBP has recently permitted banks to set up exchange companies.

Read more: Nexus b/w illegal money exchanges and bankers exposed

“As part of these reforms, leading banks actively engaged in foreign exchange business will establish wholly-owned Exchange Companies (EC) to cater to the legitimate foreign exchange needs of the general public,” the SBP official statement said.

It is pertinent to mention here that a nexus between illegal money exchanges and bankers was exposed in investigations by various agencies.

Illegal money exchanges orchestrated a nexus with various banks for money hoarding, sources said. “Islamabad’s 78 bankers and cashiers have been involved in this illegal arrangement,” according to sources.