This comes as a surprise to all of us, the State Bank of Pakistan (SBP) have now laid the roots to the elimination of exchange companies from the currency business by allowing banks and their entire branches to buy and sell foreign currencies the general public all across the country hence, eliminating the chances of being exploited in that regard. The State Bank issued revised chapters of Foreign Exchange (FE) Manual on Saturdayin which they have provided details about the currency business and have hence assigned the role of exchange companies to the banks. Furthermore, it should be noted that banks were not allowed deal with foreign currencies whatsoever and the function was in turn carried out by foreign exchange companies.
Moreover, regarding the said matter a new headline has surfaced recently, detailing that on the purchase of foreign currency notes by the general public, the State Bank has said that all incoming people, whether Pakistani or foreign national can bring along with them any amount of foreign currencies and such other atrocities, but the amount cannot exceed that of $10,000 for which they will have to submit a declaration of the amount they are carrying with themselves.On the matter the State Bank of Pakistan said “Such currencies or instruments may be freely purchased by the Authorised Dealers (banks) against payment in PKR. Authorized dealers may also purchase foreign currencies withdrawn by the account holders from their foreign currency accounts and from the walk-in-customers against payment in PKR subject to fulfilment of applicable AML/CFT regulations,”
The banks have also been instructed that a constant amount of foreign currencies should always be available to sell to the public so no damage can be caused to the customer and an efficient way if exchange can be used. The manual specifically said that “It is the responsibility of authorised dealers to ensure adequate foreign currency is available with their authorised branches at all times for meeting the requirements of their customers”.
Moreover, what affect this will have on the overall situation, only time will tell but we can all agree that the many foreign exchange service providers will not be happy with the regulation that is being setup, so we can expect a huge wave of different businessmen, showing anger on the new decision. Moreover, the Secretary of General ExchangeCompanies Association of Pakistan, Mr Zafar Paracha said that it can clearly be seen that Exchange companies are not required in the country. He also added that “ The general public will no doubt suffer since they easily buy foreign currencies from exchange companies and sell them without hurdles. Banks are unable to take care of millions of people for buying and selling of foreign currencies,” adding that banks will charge higher margins than those of the foreign exchangers. He said banks are paid Rs12-14 per remittance from abroad while exchange companies provide this service without this cost. So it would be safe to say that both sides will suffer because of the new regulation ready to be set in place, Good Luck Pakistan.