KARACHI: State Bank of Pakistan (SBP) on Friday suspended authorization of two exchange companies for serious violation of regulatory environment.
The central bank suspended the authorization of M/s Orient Exchange Company-B (Pvt) Limited and M/s Best Way Exchange Company-B (Pvt) Limited.
READ MORE: Poll suggests SBP to keep benchmark policy rate unchanged at 15pc
The SBP suspended the companies for three months due to serious violations of regulatory instructions.
SBP has advised both the companies to strengthen their Internal Control Functions and submit a report, of corrective measures to be taken in this regard, to SBP.
Both Exchange Companies, their Head Offices, all branches/outlets have been restricted from undertaking any kind of business activity during the suspension period.
The central bank had initiated harsh action against the exchange companies in order to ensure legal mode of transactions for foreign currencies.
REAR MORE: Action against banks for overcharging on LCs by month-end
On October 27, 2022, the SBP suspended the authorization of M/s Mega Currency Exchange Company – B (Pvt) Limited.
Similarly, on September 13, 2022, the central bank suspended the authorization of two Exchange Companies, namely, Swiss International Exchange Company-B (Pvt.) Limited and Great Union Exchange Company-B (Pvt.) Limited.
On March 25, 2022, the SBP suspended with immediate effect the authorization of an Exchange
Company namely M/s Noble Exchange International (Pvt) Limited till further orders for violation of SBP rules and regulations.
Recently, the SBP and Federal Investigation Agency (FIA) have agreed to take joint action against illegal exchange companies.
It was agreed by the both that concerted joint effort is required to apprehend and implicate the illegal foreign exchange operators and speculators across the country.
READ MORE: SBP introduces reporting system for illegal foreign exchange activity
SBP and FIA have jointly initiated action against illegal foreign exchange operators in Pakistan. To this effect, joint teams from SBP and FIA shall identify and take penal/legal action against the perpetrators so as to curb speculation and the grey market.
The teams, while remaining within the legal mandate allowed to them by the relevant laws, would crack down on all illegal foreign exchange operators and businesses across Pakistan.
READ MORE: Pakistan remittances decline by 15.7% in October 2022
Banks and Exchange Companies are authorized by the SBP to carry out Foreign Exchange business in Pakistan. Involvement of any person or entity, other than banks and Exchange Companies, in foreign exchange business is illegal under the Foreign Exchange Regulation Act, 1947. The illegal foreign exchange business also adversely affects the open market exchange rate and increases the gap between the interbank and open market exchange rate.
