KARACHI: The State Bank of Pakistan (SBP) has allowed Exchange Companies to sell 20 percent of their inward workers’ remittances to customers to meet their demand.
According to Malik Bostan, Chairman, Exchange Companies Association of Pakistan (ECAP), this was decided in a meeting held Thursday at SBP head office. The meeting of heads of Exchange Companies was chaired by SBP Governor Jameel Ahmed and other SBP officials also attended the meeting to discuss various issues related to the currency market.
The SBP also asked Exchange Companies to strictly comply with the regulatory instructions, otherwise, they will face legal action.
After the meeting, Malik Bostan said currently, as per the SBP directives, ECs are bound to surrender 100 percent of the workers’ remittances in the interbank. “However, during the meeting with Governor SBP on Thursday, we requested the SBP to reduce this limit up to 50 percent as ECs are facing massive shortage of the greenback in the open currency market due to high demand,” he added.
On the request of Exchange Companies, the Governor SBP has allowed them to sell 20 percent of their inward workers’ remittances to customers and the remaining 80 percent inward remittances will be surrendered in the interbank market, he maintained.
During the meeting, SBP Governor Jameel Ahmed said the SBP’s vigilance teams will make surprise visits to Exchange Companies to check the operational procedures. He asked Exchange Companies not to conduct any transaction without receipt and biometric verification. In addition, ECs ensure the CCTV must be operational during the trading hours.
Malik Bostan requested the government to review the trade policy with Afghanistan as approximately $2 billion is being sent to Afghanistan against the official and unofficial trade and the entire burden is on Pakistan’s forex reserves.
The federal government should immediately open barter trade and establish Letter of Credit in local currency. At the same time, cash dollar trade with Afghanistan should be completely banned, he added.
He said recently the Afghan government has asked for immediate conversion of Pakistani rupees into any foreign currency or Afghani currency and after this announcement, Afghani traders and public are converting Pakistani rupees into foreign currency on a large scale.
“We have already directed the all-exchange companies to buy and sell dollars as per the rate set by ECAP and ensure the compliance of SBP instructions,” he added.
Bostan said customers are selling in black market instead of selling to exchange companies as the rate in black market is Rs 10 to Rs 15 higher than exchange companies.