KARACHI: In order to promote documentation and transparency in the foreign exchange transactions, the State Bank of Pakistan (SBP) has made it mandatory that Pakistan Rupee consideration of currency exchange (CE) transactions between Exchange Companies (ECs), Exchange Companies “B” category and franchises of Exchange Companies will be conducted through the bank accounts.
The State Bank on Friday has announced to amend amended foreign exchange regulations’ Paras 9 (i)(b) of Chapter 3 and Para 12 (i)(a) of Chapter 8 of Exchange Companies Manual, in terms of which, they are allowed to purchase/ sale foreign currencies from each other, as per their scope of business.
In terms of revised regulations, it has been made mandatory for Exchange Companies, Franchises of Exchange Companies and Exchange Companies of ‘B’ Category to settle Pakistan Rupee consideration of all foreign currency purchase/ sale transactions conducted among themselves through their bank accounts.
“Pakistan Rupee consideration of currency exchange transactions amongst ECs, ECs-B and franchises of ECs will be conducted through the bank accounts of respective ECs, ECs-B and franchises of ECs”, a circular issued by SBP said.
Besides, stress has been laid on ensuring that CCTV Systems of Exchange Companies and Exchange Companies of ‘B’ Category should be functional at all times (i.e., 24 hours a day and 7 days a week) as required under existing regulations.
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However, in order to ensure transparency, it has been advised that Exchange Companies and Exchange Companies of ‘B’ Category shall not carry out any business activity during the period in which CCTV system is non-functional at any of their outlet for any reason, including technical faults, until the functionality of the CCTV system is restored.
Moreover, minimum preservation period of video recording through CCTV system has been enhanced from two to six months or until the inspection of the company by SBP, whichever is earlier. This would ensure availability of CCTV recording for audit/ inspection purposes.
Accordingly, the relevant Paras of Exchange Companies Manual would stand amended as under:
Para 9(i)(b):
Purchase and sale of foreign exchange in “Ready”, “Tom” and “Spot” value dates from/ to other Exchange Companies. Further, Exchange Companies, including their Franchises, shall settle Pakistan Rupee consideration of all foreign currency purchase/ sale transactions conducted with other Exchange Companies, Franchises of Exchange Companies, and Exchange Companies of ‘B’ Category only through their bank accounts.
Para 12(i)(a)
Exchange Companies of ‘B’ Category are authorized to deal in purchase and sale of foreign currency notes and coins from individuals, Exchange Companies and Exchange Companies of ‘B’ category in ‘Ready’ value only. Further, Exchange Companies of “B” Category shall settle Pakistan Rupee consideration of all foreign currency purchase/ sale transactions conducted with other Exchange Companies, franchises of Exchange Companies and Exchange Companies of “B” Category only through their bank accounts.
Copyright Business Recorder, 2022