KARACHI, July 29: “Please don’t insult our intelligence by thinking that we do not understand what is happening in the market,” State Bank Deputy Governor Tawfiq A. Husain warned heads of exchange companies on Friday. He gave the warning to heads of 25 foreign exchange companies during a frank discourse held immediately after their meeting with SBP Governor Dr Ishrat Husain.
Tawfiq A. Husain, under whose portfolio falls departments of the central bank dealing with foreign exchange companies, lamented that some of these companies “are still involved in business malpractices”, a source privy to the meeting told Dawn. “We don’t want to degrade them by naming,” he said and warned, “do not pose innocent -— as if you are doing no wrong.”
The SBP had summoned heads of foreign exchange companies to remind them that it has been a year now since they were asked to induct professional management, computerize their branches and promote a corporate culture. SBP Governor Dr Ishrat Husain during his meeting with the heads of exchange companies asked them individually what progress they had made so far in this regard. Quoting inspection reports of these companies, he said that they had done very little towards what they were asked to do a year ago.
Later, Dr Husain, who had to join Dr Salman Shah at a meeting convened to discuss ways of pulling the stock market out of crisis, handed over the exchange companies to his deputy.
But before this, he gave the exchange companies enough doses of polite, yet firm, observations on their incompetency. The most important point he made was that most exchange companies still had up to 90 per cent of their family members on the board of directors, which is not acceptable. He asked them to also bring in competent and professional people on the board. Besides, while making individual inquiries, he noted with shock that some exchange companies are headed by non-graduates and even non-matriculates. He reminded them that they were supposed to induct professionally skilled people in the top management.
The SBP deputy governor, who remains in frequent touch with them, reminded them of their responsibility to be fair in their day to day transactions and adhere to the rules and regulations introduced by the central bank.
Immediately after holding meetings with the SBP governor and his deputy, all 25 foreign exchange companies sat together to think of their future agenda. They appointed Muhammad Naeemuddin, managing director of NBP Exchange Company, their chairman till the time new office-bearers of the Exchange Companies of Pakistan are elected.
Talking to Dawn, Munaf Kalia of KKI Exchange Company said Mr Naeemuddin would hold the ECAP elections preferably in September. He said that Mr Naeemuddin would also frame bylaws of the ECAP, update its constitution and set some codes of conduct as part of overall reforms of the foreign exchange companies.
