The central bank has urged owners of bureaux de change to comply with new regulations on capital requirement or leave the guild and consider a change of career.
All entities applying to set up bureau de change should be informed that establishment situations have changed since the Money and Credit Council last approved a guideline in August, said Hamid Tehranfar, the deputy governor for banking supervision.
"Some people had applied for the offices years ago. So, they would be called on later to complete the procedures for attaining charters."
The central bank first raised bureau de change capital requirement in 2012 from 40 billion rials (roughly $4 million at the time) to 200 billion rials. The decision followed widespread objections and was changed once again in August. The minimum capital required for establishing a bureau de change is now 40 billion rials ($1.4 million at official exchange rate). The measure was taken to increase competitiveness in Iran’s foreign exchange market.
Based on the new bylaw, bureaux de change in major cities must raise capitals to 40 billion rials, and those in smaller cities to 20 billion rials. Furthermore, money, foreign currencies, securities or land can be put up as required capital for starting a bureau de change. The new bylaw applies to both individual owned bureaux de change and bank owned ones. The new regulations were clearly not to the satisfaction of bureau owners.
“If certain entities claim that they do not have the needed capital for starting or maintaining bureau de change, they should clearly be operating a different business,” Tehranfar said.
Of the existing bureaux de exchange several are capable of raising the needed capital, Tehranfar said adding that the new regulations may not be to the interest of certain business owners thus “they may seek methods by which they can bend the law.” Further he clarified that such attempts are “unacceptable” and all bureau are required to comply.
Status Quo
Nearly 2,000 bureaux de change have obtained work permits through the National Gold and Jewelry Union, but at the time they failed to provide required government for the police. According to the central bank, they now receive a notice that their permits could be corrected.
Tehranfar said nearly 400 such cases have referred to the Central Bank of Iran and obtained temporary permits so that the police would not inhibit their activities until official charters are issued.
Some bureaux de change already hold temporary permits, which have not yet expired. Since the new regulations were set in August 2014, and the bureaux were given a one year limit to sort out their affairs, they have until August 2015 to complete the procedure.
Additionally, a third group comprising of those whose temporary permits are about to expire have to submit extra documents required and get their permits extended. As the procedure at the Company Registration General Office may take a couple of months, the final outcomes of the procedures will duly be announced, according to the official.
To avoid any problems at the CBI or at the Registration Office, a clear schedule has been laid out so that different groups would be able to sort out their affairs at appropriate times without overlaps.
Some 650 bureux de change have official CBI permits, 150 of which are inactive. Of the remaining, 250-300 bureaux have temporary permits which are about to expire, and an additional 200 have already complied with the newly set regulations of the CBI, Tehranfar said.
