Central Bank gets tough against errant forex dealers

The Central Bank is flexing its muscles against errant forex dealers, temporarily suspending on Thursday the licence of Prasanna Money Exchange (Pvt) for selling foreign exchange higher than prescribed levels.

In a public notice on Monday, the Central Bank warned licenced money exchange dealers of action including suspension or cancellation of their licences if they sold foreign currency over and above the rate offered by licenced banks.

While banks have been trading the dollar at Rs.295-298 per dollar, money exchange dealers have been selling at higher rate – sometimes as high as Rs.350-400 per dollar.

The Central Bank said pursuant to complaints from the public and upon investigation it was observed that Prasanna Money Exchange (Pvt) Ltd had offered higher exchange rates and thereby attempted to purchase foreign currency from its customers at higher rates than the exchange rates offered to them by licensed banks and that they were in violation of the Directions issued to Authorized Money Changers under the Foreign Exchange Act No. 12 of 2017 (FEA).

“The public is informed that any transaction with the Prasanna Money Exchange (Pvt) Ltd during the period of suspension is considered as a contravention with the provision of the FEA,” it said, adding that the regulator has intensified its on-site investigations at Authorized Money Changing outlets and will stand ready to suspend/revoke permits of Authorized Money Changers who do not adhere to the Directions issued under the Foreign Exchange Act.