1. Authorisation to deal in foreign Exchange:-
(i) Section 3(I) of the Act vests powers in the State Bank to authorise any person to deal in foreign exchange. Authorisations to deal in foreign exchange are ordinarily granted by the State Bank to those scheduled banks about whom it is satisfied that they have adequate trained staff and have made other arrangements to ensure that they will be able to conduct their dealings in foreign exchange to its satisfaction and comply fully with its requirements.
(ii) The State Bank may, without assigning any reason, refuse to grant or may withdraw, if already granted, any authorisation to deal in foreign exchange if, in its opinion, adequate arrangements do not exist to secure compliance with the Exchange Control regulations or if there has been failure to comply with them.

2. Types of Licenses:-
Authorisations are granted by the State Bank in the form of licenses which may be of two kinds:
(i) a limited licence authorising dealings only in certain currencies and/or certain types of transactions as may be specified in the licence, or
(ii) a general licence authorising dealings in all foreign currencies and in all approved transactions.
A list of Authorised Dealers in Foreign Exchange is given in Appendix IV.

3. Applications for Authorised Dealer's Licence :-
Applications from scheduled banks for grant of Authorised Dealers Licence should be made to the Director. Each application should be accompanied by the latest balance sheet of the bank and should contain information on all the relevant points including availability of trained staff. Applications for issue of licenses to their other branches should contain information about expected turn-over of foreign exchange business of the concerned branch, availability of trained staff and particulars of their branch(es) in the vicinity which are authorised to deal in foreign exchange.

4. Authorised Dealers to engage in Transactions within the Scope of their Authorisations:-
An Authorised Dealer shall, in all its dealings in foreign exchange, comply with such general or special instructions which the State Bank may give from time to time and shall not engage in any transaction involving foreign exchange which is not in conformity with the terms of its authorisation.

5. Authorised Dealers should satisfy that no Contravention or Evasion of the Provisions of the
Act is contemplated :-
An Authorised Dealer shall, before undertaking any transaction in foreign exchange within the scope of its authorisation, on behalf of any person, require that person to make such declarations and to give such information as will reasonably satisfy it that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the Act or of any rules, directions or orders made thereunder. If any person refuses to comply with any such requirement or makes only unsatisfactory compliance therewith, the Authorised Dealer should refuse to undertake the transaction and should, if it has reason to believe that contravention or evasion of the provision of the Act is contemplated, report the matter to the State Bank.

6. Applications for Authorised Money Changer's Licence :-
Applications for grant of licence to act as an Authorised Money Changer should be made to the area Exchange Control Office of State Bank of Pakistan where the applicant's business is located. The applications should contain full particulars as regard to business conducted by the applicant, the location of the business premises, the names and addresses of the proprietors/partners/directors of the applicant and the same may be routed through an Authorised Dealer (Bank authorised to deal in foreign exchange) who should enclose a confidential report on the financial standing and credibility of the applicant and its suitability for grant of Authorised Money Changer's Licence. The grant of an Authorised Money Changer's licence will be subject to the following terms and conditions:-

(i) Applicant will be required to pay Application Processing Fee of Rs. 300,000/- for grant of fresh licence and a fee of Rs. 50,000/- for annual renewal of the licence through Pay Order drawn in favour of State Bank of Pakistan. The applications for renewal of the licences will be made in the second week of June each year before the expiry of the licence. in case application for renewal is not made within the above time limit, the relative licence shall be treated to have lapsed and the concerned party will be required to obtain fresh licence on payment of prescribed fee.
Ref. F.E. Cir. 46

(ii) The paid up capital in case of a company should not be less than Rs. 1,000,000.00 as per audited accounts of the company and in case of individual/partnership firm, the net worth should not be less than Rs. 500,000.00 as per the wealth statement filed with the Income Tax Department.

(iii) Authorised Money Changer's licence shall be granted only to the Pakistan nationals and resident Pakistani firms/companies who are paying income tax.

(iv) Authorised Money Changers' activities will be restricted to purchase of foreign currency notes and coins and foreign currency travellers cheques issued in Pakistan and sale of foreign currency notes and coins only.

(v) Authorised Money Changer's commercial name should not include words such as bank, financial institution, investment company, trading company, real estate company or any word indicative of activities other than money-changing business.

(vi) An Authorised Money-Changer will not be permitted to under take banking business e.g. acceptance of deposits, advancing of loans, issuance of letters of credit, discounting of bills of exchange, purchase or sale of stocks or securities, release of foreign exchange for travel abroad on various accounts as defined in Chapter XVII of Foreign Exchange Manual (7th Edition, 1992) as modified through F.E. Circulars from time to time, purchase or sale of gold and silver in any form or the precious metals or any other banking activities.

(vii) Dealings between Authorised Money Changer and Customers should be supported by receipts/vouchers for all transactions. A notice advising customers of the necessity of obtaining receipts for all purchases (by AMCs) of foreign currency notes/coins and travellers cheques or sale (by AMCs) of foreign currency notes and coins shall be prominently displayed by the AMCs. The Authorised Money Changers will fix their own exchange rates for purchase of various currency notes/coins and travellers cheques and sale of foreign currency notes and coins. They will prominently display the rates applicable to purchases and sales daily at their Counters, in the format of Exchange Rates Chart as per App.V-1).

(viii) All purchases and sales made by Authorised Money Changers in terms of this authorisation will be on their own risk and responsibility. They will make their own arrangements to procure the stock of various currency notes and coins for meeting their daily requirement as also to dispose of their surplus holdings. They should also make arrangement to ensure that the foreign currency notes handled by them are genuine. The Authorised Money Changers will not be entitled to make any purchase of foreign currency notes/coins from any Authorised Dealer against payment in rupees.

(ix) Authorised Money-Changer shall, upon State Bank's directive, provide all data, information, books of accounts and other record relating to this business at any time and for any particular period to the State Bank.

(x) Any change in the business premises of the Authorised Money Changer for which the licence is granted or opening of new branches will require prior approval of the State Bank. Separate fee for each new branch at the scale prescribed in item (i) above will be required to be paid.

(xi) Business should be conducted in a suitable independent office measuring not less than 10' x 10' in size in which no other business activity of whatsoever nature will take place. Proper counter(s) shall also be installed for public convenience. This requirement, however, will not be applicable on Hotels and Curio Shops. State Bank will have the right to declare any premises unsuitable for working as a money changer's office, if it is not suitably located in a public place.

(xii) Authorised Money Changers will be required to affix a board outside the business premises in uniform size of 5' x 3' back ground of which will be in white and title of firm will be in blue and green in the format as per App.V-2.

(xiii) The State Bank may withdraw the licence granted to any Authorised Money Changer if the latter:
(a) Does not commence its activities within three months from the date of grant of the licence.
(b) Stops its activities for a period of three consecutive months.
(c) The liquidity or solvency is endangered or if it declares bankruptcy.
(d) Does not comply with any of the conditions mentioned above/directives issued by the State Bank from time to time or has contravened any of the Exchange Control Regulations.

(xiv) Tax defaulters will not be eligible for grant of licences.

(xv) The licences will not be issued to persons involved in illegal activities as per police report.