ISLAMABAD (November 28 2006): The government is likely to authorize the State Bank of Pakistan (SBP) to impose monetary penalties on foreign exchange companies for violation of Foreign Exchange Regulation Act (FERA), 1947, sources in Finance Ministry have said.
For this purpose, the Ministry has proposed amendments in the Act to be considered by the Cabinet in its meeting to be held on Wednesday. According to Banking Companies Ordinance, 1969, the SBP monitors the affairs of foreign exchange companies and can cancel their licenses for violation of rules and regulations, but can not impose monetary penalty due to lack of such provision in the rules.
“The SBP does not have the powers to impose monetary penalties, and has to approach a court of law for proceeding against a person, company, firm, corporation or organization for any violation. This entails both time and resources,” sources said.
This issue becomes more acute in case an immediate action is required, especially in dealing with the foreign exchange companies, where the only recourse left with the SBP is to suspend or cancel the license of the concerned company. This course is more than warranted, sources added.
In order to address such issues, they said, the Federal Government should authorize the SBP to impose monetary penalty for violation of any provision of the amended rules and regulations under the Act.
They said that the Federal Cabinet may approve amendment in the provision of the Act by inserting a new clause '23-k' to penalize the foreign exchange companies.
After approval of amendments in the Act, the SBP, after serving a show-cause notice to the concerned person, company, firm, corporation or organization, to be replied with two weeks, and giving it an opportunity of being heard personally, may impose fine up to one million rupees.
If the company, person, corporation, firm or organization fails to reply within the given time, an officer of SBP, not less than a Joint Director, may impose further fine of one thousand rupees for each day, sources said.
They said that Commerce Ministry would give a presentation to the Cabinet on the Free Trade Agreement (FTA) with China, while Foreign Minister Khurshid Kasuri, or Secretary Foreign Affairs Riaz Muhammad Khan, would brief on the composite dialogue with India, the latest round of which was held in India a few days ago.
The Cabinet will also consider amendments in Family Law, 2006, federalization of Basima-Khuzdar Road (110), and request for allotment of 15 acres land for construction of a 200-bed Sughra Shafi Medical Complex in Islamabad.
The Cabinet would approve co-operation/collaboration agreement between defunct Export Promotion Bureau (EPB) and the Foundation Exporter Argentina, signing of the protocol on the preferential tariff scheme for (TPS-OIC)/Pretas) among the participating member states.
The Cabinet would accord approval to sign an agreement between Pakistan and Zimbabwe on deputation of Pakistan Armed Forces personnel to Zimbabwe, besides ex post facto approval and ratification of the agreement on establishment of SAARC Arbitration Council.