MCB Bank Limited, in its notice to the Pakistan Stock Exchange (PSX), has announced to establishment of an Exchange Company as a wholly-owned subsidiary. The notice stated that the Board of Directors of the bank vide its resolution( dated September 15 2023) has approved to establish an Exchange Company, with Rs1 billion – initial paid-up capital. The Exchange company will be a wholly-owned subsidiary of the bank.
The development awaits approval & clearance by the State Bank of Pakistan (SBP) and other regulatory compliance requirements. Earlier, the United Bank Limited (UBL) also announced to establishment of an Exchange Company as a wholly-owned subsidiary.
The State Bank of Pakistan decided to introduce structural reforms in the Exchange Company sector to strengthen controls due to the massive fall in value of Rupee in the open market. The central bank stated that in line with these efforts, leading banks (engaged in foreign exchange business) will establish wholly-owned Exchange Companies to cater to the legitimate foreign exchange requirements of the public.
SBP also raised the minimum capital requirement for Exchange Company to Rs500 million from Rs200 million. According to financial results of MCB Bank Limited, the bank achieved a 65 per cent year-on-year increase in Profit Before Tax, reaching Rs53.84 billion, for the half-year ending (June 30, 2023).