KARACHI, Aug 17: The State Bank has issued a show-cause notice to Noble Exchange Company, Gujranwala, for violating the rules and regulations. The central bank said in a press release issued on Wednesday that the company, despite several reminders, failed to disclose certain information relating to its franchises in its consolidated statements submitted to the SBP.
The SBP has asked the chief executive of the company to explain his position in writing within seven days. Exchange companies are supposed to disclose details of businesses undertaken not only by them but also by those that are franchised by them. Failure to disclose details of the business of franchises often means hiding of some deals that might have been conducted in violation of SBP rules.
Noble Exchange Company is one of the mainstream foreign exchange companies i.e. those who operate with a minimum paid-up capital of Rs100 million and are allowed to undertake not only cash buying and selling of foreign currencies but also electronic transfer of money to and from Pakistan. The companies working under their franchise, however, cannot make electronic transfers of money.
Only recently the SBP issued show-cause notices to nine mini exchange companies or exchange companies in B category that operate with a minimum paid-up capital of Rs2.5 million and that can only buy and sell cash foreign currencies.
The SBP has become a bit more aggressive in monitoring exchange companies after these companies have been found involved in promoting the business of hundi or informal transfer of foreign exchange from overseas Pakistanis back home.
