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

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.