SBP approval mandatory for opening currency exchange outlets at airports

KARACHI: State Bank of Pakistan (SBP) on Thursday directed exchange companies to take approval from the central bank before opening outlets at any airport in the country.

In a circular, the SBP said that in order to facilitate the Exchange Companies and Exchange Companies of ‘B’ category in timely opening of their outlets (Currency Exchange Booths / Branches) at Pakistani airports under Pakistan Civil Aviation Authority (CAA) license, the following procedure will be applicable with immediate effect:

a. Exchange Companies and Exchange Companies of ‘B’ category desirous of participating in CAA tender(s) for award / renewal of license of currency exchange booth(s) / branch(es) at any Pakistani airport(s) shall obtain in-principle approval from SBP before participating in each CAA tender.

b. Application(s) complete in all respects by Exchange Companies and Exchange Companies of ‘B’ category for obtaining in principal approval to participate in CAA tender(s) must reach Exchange Policy Department at least 7 working days prior to the last date of application submission in CAA tender(s).

Exchange Companies

c. In principle approval for participation in CAA tender(s) shall be given by SBP to those Exchange Companies which have better compliance ratings, financial health, corporate governance etc. as mentioned in Para 3(iii) and (iv) of Chapter 4 of Exchange Companies Manual.

d. Application(s) of Exchange Companies for in-principle approval for participation in CAA tender(s) for opening of currency exchange booth(s) / branch(es) at airports shall be treated independent of their Annual Network Expansion Plan and may be submitted to the Director, Exchange Policy Department any time during the year as per CAA tender timelines.

Exchange Companies of ‘B’ category

e. Exchange Companies of ‘B’ Category are not allowed to participate in CAA tender(s) for award of new license of currency exchange booth(s) / branch(es) as at present they are not allowed expansion of their branch network.

f. Exchange Companies of ‘B’ category holding valid CAA license of currency exchange booth(s) / branch(es) shall apply for permission to participate in fresh tenders at airports/locations where they already operate after expiry of CAA license subject to compliance as applicable to Exchange Companies with requirement of Para 3(iii) and (iv) of Chapter 4 of Exchange Companies Manual.

The SBP said that while submitting the application for participation in CAA tender, Exchange Companies and Exchange Companies of ‘B’ category shall deposit non-refundable fee of Rs.50,000/- per outlet in RTGS Clearing account number 427516 of the State Bank and submit the payment receipt as evidence of having paid the applicable fee.

The central bank warned that failure to comply with the above instructions shall attract regulatory action against the concerned Exchange Company / Exchange Company of ‘B’ Category under the relevant provisions of the Foreign Exchange Regulation Act, 1947.

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