New SBP policy permits only one type of exchange company

September 20, 2023 (MLN): The State Bank of Pakistan (SBP) has streamlined the operations of exchange companies by permitting only one type of exchange company to conduct business, governor SBP stated in his keynote address at a ceremony held to award in-principle approval (IPA) to 5 Digital Retail Banks today.

This is aimed at fostering a more controlled and transparent environment within the exchange industry.

SBP has also taken a tough stance on non-compliant exchange companies, revoking licenses of those found operating outside the legal framework.

The governor emphasized that those exchange companies that have not acquired licenses fall under the jurisdiction of government authorities for necessary action.

Furthermore, in a bid to further regulate the sector, B-category exchange companies have been granted a 30-day window to convert into A-category entities.

The possibility of mergers with A-category companies looms large, as SBP strives to create a more consolidated and secure environment within the exchange industry.

Moreover, he stated that the SBP has taken decisive action against exchange companies engaging in illegal activities.

SBP has also raised the paid capital requirement for exchange companies from Rs200 million to a substantial Rs500m, which has garnered attention, especially from large banks venturing into the exchange business with substantial investments.

Which includes MCB Bank Limited (PSX: MCB), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL).

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