SBP Seeks Collaboration of Exchange Companies with Foreign Entities 

In order to increase the flow of home remittances, State Bank of Pakistan (SBP) has allowed and encouraged exchange companies to explore new agency arrangements with foreign entities including banks and currency wire transfer on a non-exclusive basis. The exchange companies are instructed to comply with the due diligence and other requirements of the prescribed framework and approach this department along with draft agreements for seeking regulatory input on such agreements. Earlier, the banking regulator instructed exchange companies to overcome structural weaknesses which could impair the ability of exchange companies to effectively mobilize funds from overseas. Therefore, in order to facilitate exchange companies in their diligence process and bring uniformity & discipline in agency arrangements of exchange companies, it is considered necessary to provide fundamental structure of agency arrangements through the below guidelines. The exchange companies are authorized to deal in foreign currency notes, coins, postal notes, money orders, bank drafts, travelers’ cheques, transfers and other businesses as allowed by SBP.