March 26, 2024 (MLN): The State Bank of Pakistan (SBP) has issued the no-objection certificates to Askari Bank Limited (PSX: AKBL) and Meezan Bank Limited (PSX: MEBL) for establishing exchange companies.

AKBL's exchange company will operate under the name Askari Currency Exchange (Private) Limited, while MEBL's will operate under the name Meezan Exchange Company (Private) Limited.

The banks disseminated this information through notices issued to the Pakistan Stock Exchange (PSX) today.

"We are now pleased to inform you that the SBP has issued License for Commencement of Operations to Meezan Exchange Company (Pvt.) Limited," said MEBL.

On September 15, 2023, the Board of Directors of MEBL approved the establishment of an Exchange Company with an initial paid-up capital of up to Rs1 billion.

Similarly, on October 27, 2023, the Board of Directors of AKBL approved the establishment of an Exchange Company with an initial paid-up capital of up to Rs1bn.

"SBP has conveyed its 'No Objection' to Askari Bank Limited for establishing an exchange company in the name of Askari Currency Exchange (Private) Limited," said AKBL.

It is pertinent to note that both the exchange companies would be a wholly owned subsidiary of the respective banks.

This development comes after the SBP introduced reforms for the banks engaged in foreign exchange business to establish wholly owned Exchange Companies (ECs) to cater to the legitimate foreign exchange needs of the general public.

This action taken by the central bank comes in response to various regulatory issues that have been observed in the operations of ECs.

With this initiative, the SBP aims to consolidate and transform various types of ECs into a single category with a well-defined mandate.

Last week, SBP issued NOC to Bank AL Habib Limited (PSX: BAHL) and The Bank of Punjab (PSX: BOP) for establishing exchange companies.

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Posted on: 2024-03-26T09:16:34+05:00