The central bank in a circular issued on Thursday stated that exchange companies could conduct branchless banking activities as agents of authorised financial institutions (commercial, Islamic and microfinance banks).
It has been a long-standing demand of the exchange companies to allow them to conduct certain banking functions at their wide network of over 1,500 branches across the country.
“Exchange companies that intend to offer branchless banking agent services may approach any financial institution authorised to provide branchless banking services,” said the circular.
Exchange companies can start providing these services as and when the financial institution has been approved by the Banking Policy and Regulations Department of the SBP for appointing that exchange company as the agent.
Exchange companies will intimate such arrangement and submit related agreement to Exchange Policy Department for information.
The SBP said that any exchange company will not portray itself as banking company or authorised financial institution as defined in Branchless Banking Regulations.
Meanwhile, exchange companies expressed satisfaction over the State Bank’s decision.
“Due to this decision, customers will get a number of facilities under one roof which will certainly boost branchless banking,” said Malik Bostan, Chairman Forex Association of Pakistan.
“Loans could be repaid through these branches and can receive instalments of approved loans once the customer gets branchless banking account number,” said Bostan, adding that utility bills could be paid along with transfer of money to the remotest areas.
It will also help and promote tourism as the tourist would be able to get money from their accounts in the remotest areas where the exchange companies have their offices, he said.
“We have over 1,500 locations across the country which would boost the branchless banking business while it will also improve our earnings,” said Bostan.
Overseas Pakis-tanis will get special benefits through the services as they can send remittances, pay bills and send their money at different destinations through an exchange company.
Newly elected Secretary General of Exchange Companies Association of Pakistan (ECAP) Zafar Paracha appreciated the SBP move, saying: “We are going to meet the SBP governor this week with more demands which would be beneficial for both the banking and exchange companies.”
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