KARACHI (May 26 2004): The State Bank of Pakistan (SBP) has in principle decided that the existing authorised moneychangers may be allowed to establish 'B' category exchange companies (EC (B)).
The minimum paid-up capital requirement for these EC (B) will be Rs 25 million and will have to keep 15 percent of its paid-up capital as reserve requirement with the SBP.
“The main objective behind the establishment of EC (B) is to bring the existing authorised moneychangers' business within the realm of exchange companies so that smooth transition of their existing business is achieved,” according to a release issued by the SBP on Tuesday.
It is reiterated that the licences of the existing moneychangers would stand expired as on June 30, 2004, and they would cease to function as moneychangers wef, July 1, 2004.
“EC (B) would be allowed sale and purchase of foreign currency notes and coins only and would function under the following broad outlines,” the press release further stated.
The EC (B) will be required to be incorporated with the Security & Exchange Commission of Pakistan (SECP) as private limited company.
Only authorised moneychangers may be allowed to form EC (B).
Application and processing fee of Rs 100,000 will be payable to the SBP, which would include permission to open up to five branches.
For additional branches, the company will be required to pay an additional fee of Rs 25,000 for each branch.
It will be mandatory that at least five existing authorised moneychangers should join hands to form an EC (B). Once an EC (B) is allowed to commence its operations, authorised moneychangers who have forwarded the request for establishment of the said EC (B) will have to surrender their licences of authorised moneychangers at the time of issuance of licences for the EC (B).
All applications submitted to the EPD directly or through the SBP BSC's offices should contain copies of individual moneychanger licences, proposing to form an EC (B).
The step would also ensure documentation of the currency business in the country while also assuring that various types of risks associated with it are properly addressed and covered.
Detailed procedure for application for EC (B)'s licence and applicable rules & regulations shall soon be conveyed through an FE circular, said the release.