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SBP suspends authorisation of 2 currency exchange companies over 'serious violations'

  • Central bank advises both firms to strengthen internal control functions, submit report of corrective measures
Published November 18, 2022
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The State Bank of Pakistan (SBP) on Friday announced it has suspended the authorisation of M/s Orient Exchange Company-B (Pvt) Limited and M/s Best Way Exchange Company-B (Pvt) Limited, with immediate effect.

The central bank's suspension will apply for three months "due to serious violations of regulatory instructions".

The SBP also advised both companies to strengthen internal control functions and submit a report of corrective measures.

“Both ECs, their head offices, all branches/outlets have been restricted from undertaking any kind of business activity during the suspension period," the central bank added.

The development comes as SBP also expanded its scope of investigation into alleged exchange-rate manipulation beyond eight banks with the inspection team working towards the end of the month as its deadline.

“Our inspection team is working on this (investigation against banks for manipulating exchange rates) and we have given it the end of the month as the deadline,” SBP Governor Jameel Ahmad had said while talking to reporters earlier this week.

Last month, the SBP had said it will soon complete an investigation into alleged manipulation by commercial banks of foreign exchange operations in the country.

The investigation came after Pakistan's rupee fluctuated wildly, particularly recently, hitting record lows against the US dollar in September before suddenly rising towards the end of that month, leading authorities to suspect manipulation by banks and exchange companies.

Recently, the rupee has remained largely stable in the inter-bank market.

Last month, the SBP suspended, with immediate effect, the authorization of ‘B’ Category Exchange Company M/s Mega Currency Exchange Company Limited till further orders due to serious violations of the State Bank’s regulations and instructions.

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samir sardana Nov 19, 2022 12:39am
THE QUESTION IS HOW SBP DETECTS THESE CASES ? IS IT VIDE SBP INSPECTIONS & AUDITS ? OR 3RD PARTY SPECIAL OR CONCURRENT AUDITS ?OR IS THERE A E- SURVEILLANCE SYSTEM ? THERE IS A LIMIT TO THE NATURE & SCOPE & EXTENT OF SBP INSPECTIONS. 3RD PARTY AUDITS ARE NOT VIABLE ,AS THE CURRENCY TRADERS WILL NOT PAY FEES TO HIGH QUALITY AUDIT FIRMS SO SBP HAS TO HAVE AN E-SURVEILLANCE SYSTEM TO MONITOR THESE TRADERS/CHANGERS, VIA DAILY //WEEKLY REPORTAGE - & REMOTE ONLINE AUDITS WHEREIN AN AUDITOR/SBP, CAN ACCESSS THE SERVERS OF THE CURRENCY CHANGERS. FOR THIS PARADIGM,CURRENCY CHANGERS WILL NEED TO INVEST IN TECH - & TO OFFSET THAT, TEH GOP CAN GIVE SOME TAX BREAKS E-SURVEILLANCE OF CURRENCY CHANGERS WITH COMPREHENSIVE MIS,WILL ENSURE THAT CURRENT CHANGER PUNTERS CANNOT HOLD USD,WHEN PKR IS FALLING . IF THE CURRENCY CHANGERS HAVE TO SURRENDER USD IN 24 HOURS + IF THEY ARE REQUIRED TO KEEP ID & TAX ID OF PAKISTANIS IN THE COUNTRY - THAT WILL TAKE OUT A LOT OF THE EASY PUNTING !
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