State Bank of Pakistan amends exchange companies Rules
'Pakistan Times' National News Desk

KARACHI: State Bank of Pakistan has amended the rules and regulations of the Exchange Companies to ensure their role in the country’s economy and has directed the Companies to strictly comply with these instructions to escape regulatory action.

The Central Bank, in its circular issued on Friday, drew attention of Exchange Companies to F.E. Circular No.8 dated July 8, 2006 in terms of which all permissible inflows/ outflows of Exchange Companies were required to be routed through either their Nostro Accounts with banks abroad or their FCY Accounts maintained with Commercial Banks in Pakistan.

It has now been decided that all permissible inflows/ outflows of Exchange Companies are to be routed only through FCY Accounts maintained with Commercial Banks in Pakistan.

All Exchange Companies are therefore required to close all their existing Nostro Accounts with banks abroad and bring back the balances held in those accounts into their FCY A/Cs in Pakistan latest by May 31, 2008.

All Exchange Companies are required to report the compliance of the above instructions to Exchange Policy Department alongwith documentary evidence.

2. The State Bank has decided that with immediate effect an Exchange Company will be allowed to effect outwards remittances on behalf of bonafide customers for permissible transactions only to the extent of 75 percent of the home remittances mobilized by the company during the preceding month so that Exchange Companies could focus on their primary function of promoting home remittances.

In this respect, all Exchange Companies are required to report the above on the enclosed format by 5th day of every month, the circular said.

3. Attention of the Exchange Companies is also invited to EPD Circular No.6 dated April 01, 2005 wherein the revised procedure for export of FCYs other than US Dollars was prescribed. Henceforth Exchange Companies are not allowed to export cash in U.K Pound Sterling, Euro and UAE Dirhams, the SBP communique said.●