Fee for setting up exchange company raised KARACHI: The State Bank of Pakistan (SBP) has increased the fee for establishing an exchange company by five times making it an expensive ride to set up a new entity.
The SBP also raised other charges on exchange companies significantly. For example, the licence renewal fee for money changers will now be half a million as opposed to no fee in the past.
Through a circular issued on Monday, the SBP said the fee for establishing a exchange company will now be Rs1 million compared to just Rs0.2m in the past.
“We will request the SBP to bring down the fee and other charges that have been increased manifold,” said Forex Association of Pakistan President Malik Bostan.
The SBP argues that monitoring the affairs of exchange companies across the country requires funds. Money changers say the SBP had indicated that the fees would go up, but the size of the increase is bigger than expected.
“The licence renewal fee will be charged at the rate of Rs500,000 from exchange companies and Rs250,000 from exchange companies of the ‘B’ category at the time of the submission of their request for the renewal of licence,” said the SBP.
A leading money changer said the business of exchange companies has expanded and is now bigger than what it was a few years back.
“I believe the SBP has taken the right decision. The central bank needs money to monitor, guide and check the entire setup of hundreds of exchange companies,” Exchange Companies Association of Pakistan Chairman Zafar Paracha said.
However, he maintained that the SBP should also extend support to exchange companies by accepting their long-standing demands.
The SBP said a non-refundable processing fee of Rs50,000 per every new outlet will also be charged from an exchange company at the time of the submission of its Annual Network Expansion Plan for approval.
A non-refundable outlet relocation fee of Rs25,000 per outlet currently applicable to exchange companies will also be applicable to exchange companies of the ‘B’ category, said the SBP.
A non-refundable processing fee of Rs25,000 per outlet will be charged on account of the substitution of an outlet’s location.
The decision has been taken in order to improve the compliance level and ensure rationalised expansion of the sector.