State Bank grants licences to two new exchange companies

The State Bank of Pakistan (SBP) has issued licenses to two new exchange companies, namely MCB Exchange (Private) Limited and Habibmetro Exchange Services Limited, allowing them to begin operations.

MCB Bank Limited informed the Pakistan Stock Exchange (PSX) through a notice on Wednesday that the State Bank of Pakistan has issued the License for Commencement of Operations to M/s MCB Exchange Company (Private) Limited.

MCB’s board had approved the decision to establish MCB Exchange Company, with an initial investment of up to Rs1 billion on September 18, 2023.

Similarly Habib Metropolitan Bank Limited disclosed in a notice to the PSX that the State Bank of Pakistan has issued the ‘License for Commencement of Operations’ to M/s HABIBMETRO Exchange Services Limited.

The board of Habib Metropolitan Bank approved the establishment of an Exchange Company with an initial paid-up capital of up to Rs1 billion on October 10, 2023.

Earlier, on March 22, the SBP granted operational licences to exchange companies established by Bank AL Habib Limited (BAHL) and Allied Bank Limited (ABL).  

The SBP also granted a no objection certificate (NOC) to the Bank of Punjab for the establishment of an exchange company under the name BOP Exchange Company (PVT) Limited.

The establishment of the own exchange companies by the country’s commercial banks is in line with the reforms introduced by the SBP last year to curb illicit practices in the currency market. 

It is better to recall that the central bank, in September 2023, made a decisive move, and with the full force of the state launched a crackdown on exchange companies. 

The SBP also unfurled a sweeping set of reforms targeting exchange companies and ordered the top ten banks to set up exchange companies. 

While the National Bank of Pakistan and Habib Bank already had their own exchange companies, Meezan Bank, Allied Bank, Habib Metropolitan Bank, Bank Alfalah, Faysal Bank, Askari Bank and Bank Al Habib were also ordered to set them up. 

The primary objective of these reforms was tightening control over the open market and fortifying governance, internal controls, and compliance standards within the sector.