Islamabad, Aug 5, 2025: In a significant move to boost formal remittance inflows, the federal government has sanctioned a supplementary grant of Rs. 30 billion to restart incentives under the Pakistan Remittances Initiative (PRI). The initiative, which had faced funding delays earlier this year, is now being revived following a directive from Prime Minister Shehbaz Sharif.
Previously, the Finance Ministry had held back funding for the scheme due to budgetary constraints and rising fiscal pressure. Last fiscal year, Rs. 87 billion had been earmarked, yet the State Bank of Pakistan (SBP) submitted claims worth Rs. 200 billion—majority under the Telegraphic Transfer (TT) Charges Scheme. The funding gap resulted in a temporary suspension of subsidies, contributing to a notable dip in remittance inflows during July.
Despite the pause, remittances surged to an all-time high of $38.3 billion in FY25, marking a 27% increase compared to the previous year, while export earnings remained flat at $32 billion.
However, starting July 1, 2025, the government has revised the subsidy structure. The minimum transaction eligible for rebate has been increased to $200, while the rebate itself has been standardized to SAR 20—replacing the earlier SAR 20–35 slab. Additionally, the Exchange Companies Incentive Scheme (ECIS), which offered Rs. 4 per dollar, has been discontinued.
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The SBP has now been tasked with presenting a detailed cost-benefit analysis for gradually phasing out the subsidy program. It has also been directed to consolidate various payment gateways in a bid to strengthen formal remittance channels and reduce reliance on informal money transfer networks.
This latest funding injection is expected to encourage overseas Pakistanis to utilize official banking channels, ultimately stabilizing foreign exchange reserves and supporting economic growth.
