Hundreds of thousands of Umrah pilgrims are flocking to the holy city from all over the world in the holy month of Ramadan.
The peak Umrah season and the Haj season that follows usually give a boost to business and shopping activities in Makkah. Money exchanges are one of the major beneficiaries.
However, there are many exchanges that operate illegally and they earn a huge profit at the expense of licensed ones, according to sources in the industry.
The legitimate businesses blame the government for their inaction in curbing unlicensed money exchanges, which are allegedly involved in earning profit through exploiting and cheating Haj and Umrah pilgrims as well as visitors to Islam’s holiest city.
The strict and difficult procedures involved in securing a license from the Saudi Arabian Monetary Agency (SAMA), the central bank, was said to be a major reason for the burgeoning number of unlicensed firms in Makkah.
According to a report in Al-Watan Arabic daily, there are only seven licensed money exchanges in the city. The rest work without proper licenses from SAMA. Some of them operate on a temporary license while others use a front, such as a grocery store, to cover up their real activities.
One operator at an illegal money exchange told Al-Watan that SAMA must share the blame.
“SAMA’s strict conditions and procedures to issue a license have forced us to engage in the trade in this way. Our efforts to get a license and legalize our operation have been continuing without success for 17 years,” he said, claiming that his firm had managed to get a temporary license in the beginning.
A foreign employee at another money exchange also blamed SAMA for the situation.
A number of workers at these firms pointed out that authorities had earlier served several notices to shut down their firms unless they legalize their activities within a stipulated period of time.
Some of these firms managed to get a temporary license from the municipality office in Misfalah while others ignored the warning.
Those working at licensed firms added that it was very difficult to obtain sanctions from the authorities to open branches in various parts of the city.
“However, unlicensed firms open branches wherever and whenever they wish. There are about 14 unlicensed money exchanges in the Misfalah and Gazza areas alone,” one source said, adding that these exchanges have several branches employing foreigners.
“These firms often exploit and cheat Haj and Umrah pilgrims. Some of them charge rates that are not compatible with that approved by SAMA. The source of their money is also unknown.”
Makkah police had raided and shut down illegal money exchanges at the end of 1428 AH (2007) and 1430 AH (2009) and issued warnings to them.
Police had also taken written pledges from these operators not to resume trading without securing a license from SAMA. However, more and more illegal money exchanges have re-emerged and continued their operations.
Al-Watan said four government departments responsible for monitoring the trade -- the Ministry of Finance, Ministry of Commerce and Industry, the municipality and local police.
But they are allegedly evading their responsibilities of taking punitive action against violators of the law, and several foreign workers are taking advantage of that.
