The State Bank of Pakistan (SBP) has issued a no-objection certificate (NOC) to Faysal Bank Limited, one of the country’s largest Islamic banks, to establish a wholly-owned Exchange Company (EC).

Faysal Bank shared the development in its notice to the Pakistan Stock Exchange (PSX) on Wednesday.

“We are pleased to inform you that the SBP has conveyed its ‘No Objection Certificate’ to Faysal Bank Limited for establishing an exchange company in the name of M/s. Faysal Islam’ Currency Exchange Company (Private) Limited,” read the notice.

Back in September, Faysal Bank Limited (FABL) announced to establish an EC as a wholly-owned subsidiary.

“The Board of Directors of FABL in its meeting held on September 27, 2023, has approved the establishment of an EC with an initial paid-up capital of Rs1,000 million,” read the notice

Last month, the central bank also issued NOCs to Habib Metropolitan Bank Limited, Allied Bank Limited and MCB Bank Limited for establishing an exchange company.

In September, the SBP, in its bid to strengthen controls amid the massive fall in rupee’s value in the open market, decided to introduce ‘structural reforms’ in the EC sector.

“As part of these reforms, leading banks actively engaged in foreign exchange business will establish wholly-owned Exchange Companies (EC) to cater to the legitimate foreign exchange needs of general public,” said the SBP in a statement.

Following this, some nine banking entities to date have announced they will establish an EC as a wholly-owned subsidiary, the most recent of which was Bank of Punjab.