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State Bank suspends 4 branches of 2 foreign exchange Cos, terminates 13 franchises to curb culture of dollarization

SBP has also started conducting mystery shopping exercise throughout Pakistan to investigate the apprehensions that some ECs are not selling foreign currency to their customers.

ISLAMABAD: In a bid to discourage the ongoing culture of dollarization in the country, the State Bank of Pakistan has suspended four branches of two famous foreign exchange companies (ECs) and terminated arrangements with 13 franchises of other ECs.

In a statement issued on Wednesday evening, SBP said that in view of recent volatility in the exchange rate and the difference between the interbank rate and
the rate offered by Exchange Companies (ECs) and banks to their customers, State Bank of Pakistan (SBP) has increased the monitoring of the foreign exchange operations of ECs and banks.
In this respect, SBP started inspections of a number of exchange companies and banks since Monday (August 1, 2022) On Tuesday (August 2, 2022) SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.

The central bank has also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.

The SBP has also started conducting mystery shopping exercise throughout Pakistan to investigate the apprehensions that some ECs are not selling foreign currency to their customers. A meeting of the Exchange Companies Association of Pakistan has also been called on August 4, 2022.
If needed, SBP would augment its enforcement actions on the ECs and the banks in light of findings of the on-going inspections and mystery shopping.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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