Bank Alfalah Limited (PSX: BAFL) has received approval from its Board of Directors to establish an exchange company with an initial paid-up capital of Rs2 billion.
The bank will raise the required capital by issuing 200 million ordinary shares at a price of Rs10 per share, as revealed in a filing on the Pakistan Stock Exchange (PSX) on Tuesday.
This exchange company will function as a wholly-owned subsidiary of Bank Alfalah. However, this decision is subject to approval and clearance from the State Bank of Pakistan (SBP) and other regulatory compliance requirements.
This move is part of a broader effort to combat illicit activities in the black market. The SBP is implementing structural reforms in the exchange company sector to strengthen oversight, governance structures, internal controls, and compliance procedures.
The SBP has also increased the minimum capital requirement for exchange companies from Rs 200 million to Rs 500 million, with the added condition that the capital must be free of losses.
Bank Alfalah joins several major banks, including United Bank Limited (UBL), Meezan Bank, MCB Bank Limited (MCB), Bank AL Habib (BAHL), Allied Bank Limited (ABL), and Faysal Bank Limited (FABL), in their pursuit to establish their own forex companies.
Notably, Habib Bank Limited (HBL) and the National Bank of Pakistan (NPB) had ventured into exchange companies before the implementation of these new SBP regulatory measures.