KARACHI, June 30: The State Bank said on Wednesday that more than 90 per cent of 375 licensed money changers had either set up mini exchange companies or had got franchise with the mainstream exchange companies or established such companies on their own.

The State Bank had asked all the licensed money changers to opt for any of the three options by June 30, 2004 as after this date they would not be allowed to operate as money changers.

"A small percentage of AMCs (authorized money changers) have indicated their intention to exit the money changing business altogether," said a press release issued by the State Bank on Wednesday.

"Only about 28 AMCs have remained undecided, resulting in lapse of their authorization to transact the money changing business. Such AMCs will not be able to continue their business legally in their own right. They can, however, continue to have the option of negotiating franchise/booth arrangements with the established exchange companies."

With the successful completion of this phase of bringing exchange business under the corporate discipline, a vast majority of such transactions will now come under proper documentation.

It will also be subject to the internationally accepted norms of Know Your Customer policy, identification/detection of suspicious transactions and will provide support to the efforts against money laundering, says the SBP release.

The release further says that from July 1, 2004, money changing business will be transacted, in addition to banks, through exchange companies only. "All money changers, who were earlier authorized to transact exchange business under licence from the State Bank, have ceased to function from the close of business on June 30, 2004." SBP sources say the central bank will seek help from law-enforcement agencies to stop operations of illegal money changers.