“SAMA could impose the new condition on the new operators who want to enter the money exchange business for the first time,” Al-Eqtisadiah reported.

Adel Multani, a senior money exchange businessman in Makkah, said that SAMA’s new condition is very difficult to implement as far as old money exchangers are concerned.

“I am certain that the SAMA regulations and conditions are aimed at serving the interests of this profession. But it is very difficult for old money exchangers to find SR2 million in capital. We have been doing this business since several decades. I request SAMA to give us exemption and impose the new condition for those who want to open new money exchanges,” he said.

According to Multani, the condition of SR2 million capital is not the only hurdle facing those operating money exchanges.

“SAMA is not allowing us to open new branches even though we are ready to meet the terms and conditions in this respect. The local banks are also not extending to us cooperation in doing the business. Most banks do not respond positively to our requests to make available smaller currencies such as those in the denominations of SR5 and SR10,” he said while drawing attention to the fact that banks are flouting specific directives from SAMA in this respect.

“Due to this situation, several money exchange operators are forced to collect smaller currencies from those in their friendship circle,” he said while identifying this as one of the major problems faced by those operating money exchanges in Makkah.

On his part, Faras Abdul Jabbar, another money exchange businessman in Makkah, urged SAMA to resume disbursing smaller currencies to money exchanges instead of directing them to approach local banks.

“There has been tremendous demand from citizens for smaller denomination of currencies. Many parents want to have possession of these currencies to give their sons as petty cash for their spending while going to school. But we are not in position to fulfill these requirements most often,” he said.

According to Abdul Jabbar, the new directives would put an end to many money exchanges which are operating illegally.

“SAMA has said applications for opening new exchange should be done online. This would help the banking regulator to closely monitor the money exchange sector,” he said.

In spite of his objection to the new SAMA regulation for a minimum SR2 million capital for money exchanges, Abdul Jabbar said that such a regulation would help put an end to the illegal activities in this crucial sector. He also cited the practice followed by a number of citizens as an example.

“These citizens allow foreigners to run money exchanges as part of a cover up business. There are reports about variations in the exchange rates pursued by these foreigners. There was a black market in place when some of the money exchanges had been shut down in the Haram Central Area two and a half years ago,” he said while noting that the Umrah pilgrims and visitors to the Haram Mosque were the victims of this illegal activity.