Askari Bank increases capital for currency exchange subsidiary

Askari Bank Limited has announced an increase in the authorized and paid-up capital of its wholly-owned subsidiary, Askari Currency Exchange (Pvt.) Limited. 

The decision was approved by the bank’s Board of Directors during a meeting held on August 29, 2024.

According to a disclosure made to the Pakistan Stock Exchange (PSX) on Thursday, the board has approved the enhancement of the subsidiary’s authorized capital from Rs 1 billion to Rs 1.2 billion. Additionally, the paid-up capital has been increased from Rs 700 million to Rs 1 billion.

This move is seen as part of Askari Bank’s strategy to strengthen its currency exchange operations. 

On Augiust 28, the State Bank of Pakistan (SBP) issued license to Askari Currency Exchange (Pvt.) Limited to commence operations. This follows the issuance of a certificate of incorporation by the Securities and Exchange Commission of Pakistan (SECP) on April 19, 2024.

Askari Bank approved the establishment of a wholly-owned exchange company with an initial capital of Rs 1 billion on October 27, 2023.

Last year, the State Bank of Pakistan unveiled a set of reforms related to exchange companies, citing frequent regulatory issues and weaknesses, especially in the operations of exchange companies in category B as well as franchises of exchange companies. 

Under the SBP’s reforms, all exchange companies in categories A and B along with franchises of exchange companies will be consolidated and transformed into a single category with a well-defined mandate.

The central bank also raised the minimum capital requirement for exchange companies to Rs 500 million (free of losses), saying this will strengthen their solvency and infrastructure.