KARACHI, July 8: The State Bank on Saturday asked all exchange companies to close down their Nostro accounts opened with exchange companies abroad by July 25, 2006.

The State Bank issued a circular saying that in view of the difficulties at the initial stage in opening of Nostro accounts with the banks abroad, the exchange companies were allowed to open such accounts with exchange companies abroad for related purposes.

“It has now been decided that all such Nostro accounts with exchange companies abroad will be closed by July 25, 2006,” said the circular.

The circular further added that the foreign currencies on account of home remittances or against export of foreign currencies (other than US dollar) should either be received in exchange company’s Nostro accounts with the banks abroad or in foreign currency accounts maintained with banks in

Pakistan.

The exchange companies will be further required to report, on transaction-to-transaction basis, with the relevant dates of export of foreign currencies (other than US dollar) and date of receipt of credit, the name of branch and the bank.

The SBP also decided that from July 10, 2006 (inclusive), all exchange companies will ensure that a minimum of 10pc of foreign currencies exported by them and a minimum of 10pc of foreign currencies received by them on account of inward home remittances, in equivalent US dollars, must invariably be sold in the inter-bank market on an ongoing basis.

The SBP asked all exchange companies to submit report about aggregate foreign currencies mobilised by them and the amounts sold in the inter-bank market along with the name of the counter parties at relevant dates. The report would be submitted on last day of each month.