Foreign remittances: National Bank gearing up to play a bigger role

The bank has seen its foreign remittances rise phenomenally in past two years.

KARACHI: National Bank of Pakistan – with remittances surpassing $1 billion a year – is gearing up for further growth in this area of its business and has expedited payment process by putting online 1,000 branches.

In an interview with The Express Tribune, chairman of NBP Exchange Company Khalid Bin Shaheen said NBP has made 22 new tie-ups with international banks and exchange companies to boost its remittances in coming years. Most of these tie-ups are in the Middle east which alone accounts for 60% of total remittances.

Shaheen said he encashed his old contacts that he made during last eight years or so, working with another bank in the Middle East region.

These new tie-ups will soon make contribution to the growth in the bank’s remittance department, he said. Al Rajhi Bank – the World’s largest Islamic bank – National Commercial Bank of Saudi Arabia, Bank AlBilad Saudi Arabia and Xpress Money are a few names in the list, he said.

Shaheen said it usually takes beneficiaries three to 15 days before their payments were remitted at NBP while other banks were faster. To expedite the transactions, NBP has put 1,000 branches online, he said, the remaining branches will be made online by the end of this quarter.

NBP has already launched NBP Fori (fast) Cash and NBP Fori Transfer, Shaheen said. Through NBP Fori Cash, a cash payment of up to half a million can be made by about 1,300 branches all over Pakistan – that too without an NBP account.

NBP already has Western Union on its network, he said, the addition of Xpress Money will further enhance its remittance network.

“Our remittances were about $200 to $300 million two years ago; we have now crossed $1 billion and can compete with other banks,” Shaheen said.

There was a time when about 15,000 people would go overseas for work every month, Shaheen said, in the last two to three years that number has doubled – a strong indication that remittances will continue to pour in, he said.

One of the reasons why remittances have increased recently is due to the unrest in the Middle East region as many Pakistanis thought it unsafe to keep their money abroad, he said. They transferred the money to Pakistan and invested here.

Additionally, the export of Pakistan’s manpower; Shaheen said is also a big factor that has helped increase the country’s foreign reserves. In 2009 alone, half a million people went overseas and a good percentage of that total was skilled workers, he added.

Shaheen – who joined NBP in June of 2009 – said NBP has been able to improve its market share from 5%, two years ago, to about 11% now. The bank has seen significant growth in this department, he said. especially if compared with how much growth other banks have recorded.

Published in The Express Tribune, December 27^th, 2011.