Allied Bank Limited (ABL) unveiled its plans on Wednesday to establish a wholly-owned exchange company, with an initial capital of Rs 1 billion.
This significant decision aligns with the provisions outlined in Sections 96 and 131 of the Securities Act, 2015, and Regulation 5.6.1 of the Pakistan Stock Exchange (PSX) Rule Book.
The announcement was made following a board of directors’ circular resolution dated September 27, 2023. According to ABL’s official stock filing, the establishment of this exchange company, with an initial paid-up capital of Rs 1,000 million (Rs 1 billion), remains subject to approval and clearance by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).
This development comes in the wake of recent measures aimed at curbing illicit activities within the black market. The SBP’s subsequent pledge to usher in structural reforms in the exchange companies’ sector underscores the gravity of the situation.
The core objective of this crackdown was to tighten oversight of the open market while fortifying governance structures, internal controls, and compliance protocols within the sector. The minimum capital requirement for exchange companies has been raised from Rs 200 million to Rs 500 million, with the additional requirement that the capital be free of losses.
It’s worth noting that ABL now joins the ranks of major banks eager to participate in this transformative shift. United Bank Limited (UBL), Meezan Bank, MCB Bank Limited (MCB), and Bank AL Habib (BAHL) have all recently signaled their intentions to establish their own forex companies. Habib Bank Limited (HBL) and the National Bank of Pakistan (NPB) had already ventured into exchange companies before the introduction of these new regulatory measures by the SBP.
