A growth rate of 15-20% for remittances is insufficient, says Mandviwalla. ILLUSTRATION: JAMAL KHURSHID
ISLAMABAD: Federal Minister for Finance Saleem Mandviwalla Tuesday directed Pakistan Remittances Initiatives (PRI) to integrate all A-category exchange companies into the mainstream system to meet the target of $20 billion in remittances.
According to a statement issue here, the finance minister took the decision with an aim to promote legal channels for home remittances from Pakistanis working abroad. He said that a growth rate of 15-20% for remittances was insufficient and PRI must come up with a plan for achieving the target while focusing on the potential of exchange companies and an analysis of direct and indirect incentives.
PRI was launched as a joint initiative of the State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance with the purpose of facilitating, supporting, faster, cheaper, convenient and efficient flow of worker’s remittances into Pakistan.
Among one of the many steps that PRI is taking to enhance the flow of remittances are the envisioning, implementation and operation of a remittance hub for Pakistan.
The hub amongst will ensure that all remittances are received, processed and disbursed in a timely and convenient manner making the remittance hub the medium of choice for all remitters to send remittance transactions.
Published in The Express Tribune, March 6th, 2013.
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As soon as the Exchange Companies are added to the channels, we will see a massive increase in inbound remittances, primarily black money being reintroduced through the legal channel. Banks have resisted this for the longest time now. There is no need to add Exchange Companies to the payout channel as it will not add any sizeable number of payout locations.
Alternately, the dear Minister should work on ensuring strong marketing efforts, jointly by all the local banks, in the international markets, highlighting the speed, efficiency of the new remittance flows to Pakistan as well as the fact that is mostly free for the remitter, under the FREE SEND MODEL introduced by the PRI. Banks can afford to give 10% of their Remittance-based income to this fund, for atleast 2 years, to sponsor / finance marketing efforts in key locations such as UAE, Europe, USA, Canada, etc. Marketing to Pakistani expats is not as expensive as there as specific, low-cost channels / marketing locations available to do so.
How much is the maximum time during which family could get the money? From USA, thru UBL it takes five to seven days and exchange rate is two Rs less than the inter bank rate. For example at this time UBL exchange rate is Rs 96.05 as of march 6th and you do not have to pay any fee to send money. It will take five to seven days.(If the recipient bank account is in any other bank) I think the exchange rate can be improved and time can be decreased if the banks want to. Can PRI force some changes?
Statements like these should be offensive to any Pakistani, especially those living abroad. Growth in remittances are coming from Pakistanis leaving Pakistan and the major chunk of it is coming from the slave labor in the Arabian Peninsula.
Other than that, if they simply allow the Official rate to reflect the real value of rupee, people would use Pakistan Banking Sector to send money. Who wants to subsidize a Govt's expense at their already suffering family's cost.