The State Bank of Pakistan, on Saturday made a change in the Foreign Exchange Manual, according to which, the banks would now be able to work as money exchanges.
Previously the banks could not directly get involved in the exchange business, unless they had a certified exchange of their own.
According to the new manual, the banks can now buy and sell foreign currencies directly. There is no limit to the amount one can get exchanged from the banks, but for any transaction greater than $10,000, the condition of submission of a declaration to the customs authorities, is mandatory.
According to the new policies, banks can even sell foreign exchange to any person travelling abroad, under the limit set by the government. SBP notified the banks to have abundant currency reserves to cater to the needs of the general public.
SBP did not comment about the future of the exchange companies, but it is clear from the new policies that the exchange business will take a hit.
Secretary-General Exchange Companies Association of Pakistan Mr. Zafar Paracha said that there are some officials in the government, that he knows of, who want to close down the exchange companies, as they think that the exchanges manipulate the exchange rate.”
He added that the general public is going to suffer because of these steps as the bank charges a higher fee, as compared to them.
Paracha further added that the exchange companies provide $10 to $11 billion to the country annually and if the government shuts us down then 25,000 jobs, which are directly related to the exchange market, will be lost and another 60,000 people which are indirectly related, will also suffer.