According to the circular, EC with capital of Rs200 million or above will be eligible for network expansion. PHOTO: FILE
KARACHI: The State Bank of Pakistan (SBP) sent a circular on Monday, to all exchange companies (EC) in the country, regarding the ‘Network Exchange Policy of Exchange Companies’, highlighting the rules for establishment and operations of new exchange companies. The central bank claimed that the new rules introduced will simplify procedures and consolidate the existing network.
According to the circular, any EC desirous of opening new branches, franchises, payment booths and currency exchange booths shall submit an ‘Annual Network Expansion Plan’ (ANEP), approved by its board of directors by September 30 each year for the next calendar year. Approval for the said plan shall be granted by the Exchange Policy Department after scrutinising the company’s past record and current health.
According to the circular, EC with capital of Rs200 million or above will be eligible for network expansion, while new companies with a capital of less than Rs200 million will initially be allowed a maximum network of 20 only.
The circular highlighted new criterion for capital adequacy for each company: each branch is required to maintain Rs5 million, each franchise Rs3 million and each payment booth/currency exchange booth Rs2 million. Exchange companies who do not fulfil the paid-up capital requirement in relation to their existing network must fulfil the capital requirement by December 31, 2014.
Published in The Express Tribune, June 4th, 2013.
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