KARACHI: State Bank of Pakistan has decided to introduce structural reforms in 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 legitimate foreign exchange needs of general public.

Furthermore, various types of existing exchange companies and their franchisees will be consolidated and transformed into single category of exchange companies with well-defined mandate.

In addition, minimum capital requirement for Exchange Companies has been increased from Rs 200 million to Rs 500 million. Exchange companies of category 'B' (ECs-B) and franchisees of exchange companies have been offered following options to transform into mainstream exchange companies:

ECs-B may graduate to exchange companies after meeting all regulatory requirements, within three months otherwise, their license would be cancelled.

Franchisees of exchange companies may either merge or sell operations to concerned franchiser company, within three months after meeting all regulatory requirements. For above purpose, ECs-B and franchises of exchange companies will submit their conversion plan and seek NOC from SBP within one month.

Above reforms have been introduced to provide better services to general public and bring transparency and competitiveness in exchange companies' sector. This is expected to strengthen governance, internal controls and compliance culture in sector.

Published in The Daily National Courier, September, 07 2023

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