The Bank of Khyber (PSX: BOK) announced on Friday that it will set up a wholly-owned Exchange Company with an initial paid-up capital of up to Rs1 billion.
In a stock filing on the Pakistan Stock Exchange (PSX), the BOK stated that its board had approved the establishment of an exchange company during their meeting held on November 03, 2023.
However, the board’s decision is subject to approval and clearance by the SBP and the completion of other regulatory compliance requirements.
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BOK’s initiative is a crucial component of a wider campaign by the State Bank of Pakistan (SBP) aimed at curbing illicit activities within the underground market.
The SBP has recently introduced structural reforms within the exchange company sector to enhance regulatory oversight, bolster governance frameworks, fortify internal controls, and tighten compliance protocols.
Furthermore, the SBP has raised the minimum capital requirement for exchange companies from Rs 200 million to Rs 500 million, with the additional stipulation that the capital must be unencumbered by prior losses.
Earlier, major banks including United Bank Limited (UBL), Meezan Bank, MCB Bank Limited (MCB), Bank AL Habib (BAHL), Allied Bank Limited (ABL), Faysal Bank Limited (FABL), Bank Alfalah (BAFL), Habib Metropolitan Bank, Askari Bank Limited and Bank of Punjab announced their plans to establish their own forex companies.
The SBP issued no-objection certificate (NOC) to ABL and MCB for establishing their exchange companies. Allied Bank’s exchange company will be named ABL Exchange Company (Private) Limited and MCB’s as MCB Exchange Company (Private) Limited.
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.
