KARACHI-State Bank of Pakistan (SBP) introduced structural reforms in the Exchange Companies’ sector for providing better services to general public and bringing transparency and competitiveness in the sector.
As part of the reform process, said a statement issued here on Wednesday, the minimum capital requirement for exchange companies has been increased from Rs200 million to Rs500 million. Following the introduction of the reforms, leading banks actively engaged in foreign exchange business have to establish wholly owned exchange companies to cater to the legitimate foreign exchange needs of general public, it added.
As per envisaged reforms, various types of existing exchange companies and their franchisees would be consolidated and transformed into a single category of exchange companies with a well-defined mandate. The central bank has offered the Exchange Companies of category ‘B’ (ECs-B) and franchisees of exchange companies different options for their transformation into mainstream exchange companies. ECs-B may graduate to Exchange Companies after meeting all regulatory requirements within three months and failing in that may lead to cancellation of their licence, the statement outlined adding that franchisees of Exchange Companies may either merge or sell operations to the franchiser company concerned within three months after meeting all regulatory requirements. The central bank has given one month time to the ECs-B and franchises of exchange companies to submit their conversion plan and seek NOC from SBP for the purpose. The SBP spokesperson informed that the structural reforms have been introduced to provide better services to the general public and bring transparency and competitiveness in the Exchange Companies’ sector. The reforms were expected to strengthen governance, internal controls, and compliance culture in the sector, he added.