The State Bank of Pakistan has decided to introduce structural reforms in the Exchange Companies sector to strengthen governance, internal controls, and compliance culture in the sector.
The SBP wants banks actively engaged in foreign exchange business to establish wholly owned Exchange Companies to cater to the legitimate foreign exchange needs of the general public, a statement by the central bank said.
Various types of existing exchange companies and their franchisees will be consolidated and transformed into a single category of ECs with a well-defined mandate.
Additionally, the minimum capital requirement for Exchange Companies has been increased from Rs200 million to Rs500 million.
The ECs of category ‘B’ (ECs-B) and franchisees of exchange companies have been offered the following options to transform into mainstream ECs:
ECs-B may graduate to ECs after meeting all regulatory requirements, within three months; otherwise, their license would be canceled.
Franchisees of ECs 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.
