March 16, 2003	Sunday	Muharram 12, 1424

KARACHI, March 15: The State Bank will issue two more licences to foreign exchange companies early next week — as money changers will stop exporting foreign currencies from Monday. The SBP had stopped them from exporting foreign currency — and assigned this job to two foreign exchange companies in mid February. But it had to allow one more month for currency export by money changers on the protest of the Forex Association of Pakistan — a body grouping some money changers.

The central bank on Saturday decided to issue licences to Al- Sahara Exchange Company and Data Exchange Company — both based in Karachi. President of Forex Association of Pakistan Malik Bostan told Dawn that the decision to issue the licences was taken at a meeting between a group of money changers and some SBP officials.

The money changers including the chief executives of Al-Sahara Exchange Company and Data Exchange Company had called on head of treasury of SBP Zafar M. Shaikh and Executive Director Farhat Saeed to allow them to continue to export foreign currencies for another 15 days. The SBP had earlier informed money changers that they would not be allowed to export foreign currencies after March 15. “Instead of allowing us to continue to export foreign currencies the SBP officials insisted that some of us must start working as exchange companies,” Bostan told Dawn.

Chief Executive of Al-Sahara Exchange Company Mehboob Moti and head of Data Exchange Company Haji Anees Pardesi admitted to Dawn that they had initially sought SBP permission to continue to export foreign currencies as money changers. But when they were told this was not possible at all they agreed to start operating as exchange companies. “We will start operating from Tuesday,” said Mehboob Moti adding that initially he will start operations with the main branch of his company located at I.I. Chundrigar Road in Karachi. Head of Data Exchange Company Haji Anees Pardesi said his company would also start working from early next week initially from its main office in the Stock Exchange Building.

Both companies are starting operations with an initial paid-up capital of Rs100 million but their chief executives say they plan to enhance it afterwards.

Currently two exchange companies namely H&H Exchange Company of Haji Haroon and NBP Exchange Company — a subsidiary of National Bank — are in operation. With Al-Sahara and Data Exchange companies set to start working from next week the number will rise to four.

Exchange companies are being introduced in Pakistan to replace some 480 plus licensed money changers to ensure a closer super-vision of foreign exchange inflows and outflows by the State Bank. Unlike money changers these companies are also allowed to deal in electronic transfer of money to and from Pakistan — but they are supposed to document their transactions to check money laundering.

MONEY CHANGERS: Forex Association of Pakistan President Malik Bostan said money changers had no reservations now on the SBP decision to stop them from exporting foreign currencies. This is a U-turn in his earlier reported remarks that money changers will move courts if they are kept out of this business.

Now Bostan says the SBP has removed the fears on the basis of which he had made this remark in mid-February when the SBP had stopped export of currency by money changers. “Even in the past all money changers were not involved in export of currency. Only five of us were doing this on their behalf,” he said implying that as the stage is set for the most of these companies to start operations as exchange companies — the question to oppose the SBP ban on export of currency by money changers does not arise.

“This confirms the popular belief about Bostan that he had made a hue and cry about the ban on currency export by money changers only to ensure that a few of them who are in this business may gain time to start operations as exchange companies,” said a source in SBP recalling how the SBP had to allow the money changers one month time to continue to export foreign currencies within 24 hours after imposing a ban on it on February 15.

Money changers take out non-dollar currencies from Pakistan to sell them in Dubai and bring their dollar equivalent back home. This is referred to as export of currency. Up till now both money changers as well as exchange companies were exporting non-dollar currencies but from next week only exchange companies will be doing this.