The Board of Directors of Bank of Khyber (BoK) announced on Friday that it will establish an Exchange Company (EC) as a wholly-owned subsidiary, becoming the 10th banking entity to make such an announcement to date.
The development was shared by the bank in its notice to the Pakistan Stock Exchange (PSX).
“The State Bank of Pakistan (SBP) in line with its regulatory directives has encouraged banks to establish currency exchange companies to facilitate and improve the currency exchange and related financial services through formal banking channels,” read the notice.
“Accordingly, Board of Directors of the Bank of Khyber in their meeting held on Friday, November 03, 2023 has approved for establishment of an EC with an authorized share capital of Rs1,000 million subject to approval and clearance from SBP and completion of other regulatory compliance requirements,” it added.
The bank shared that the EC will be its wholly-owned subsidiary and will operate as an EC within the framework prescribed by the SBP.
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.
The SBP has also raised the minimum capital requirement for EC from Rs200 million to Rs500 million, raising the barrier to entry for the private sector.
As per the bank’s latest financial results, BoK announced a profit before tax of Rs 4,682 million for 9MCY23.