Islamabad, Sep 15: The State Bank of Pakistan (SBP) has proposed performance-based incentives for banks and exchange companies to encourage higher remittance inflows through formal banking channels.
An additional reimbursement of 8 SAR per incremental eligible transaction would be made for growth up to 10% or $100 million over the previous year, whichever is lower.
A further reimbursement of 7 SAR would be provided for growth exceeding 10% or $100 million.
Concerns were raised during the meeting about whether a cost-benefit analysis had been conducted, as the scheme could have significant financial implications for the national exchequer.
In response, the central bank clarified that this scheme had been in place for years and had proven effective in increasing remittances, bringing in nearly $30 billion annually.
The reduction in the base rate, from 30 SAR to 20 SAR, would also help lower the government’s overall Telegraphic Transfer (TT) charges.
The SBP representative also explained other proposed revisions pertaining to exchange companies.
The Finance Division informed the committee that the government, through SBP and the Pakistan Remittance Initiative (PRI), has implemented various schemes to encourage remittances via formal channels.
These schemes were revised in 2023, resulting in consistent growth in remittance inflows. For FY 2024, remittances saw a positive cumulative growth of 10.7% year-on-year, totalling $30.3 billion, compared to $27.3 billion in FY 2023.
