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Money Exchanges Given a Free Hand to Attract More Remittances

by August 2, 2019 Affairs

The State Bank of Pakistan (SBP) has asked the foreign exchange companies to take necessary measures to attract direct remittances from the countries where the inflow is minimal.

A delegation of exchange companies association led by Malik Bostan held a meeting with the SBP Executive Director Syed Irfan Ali Shah on Thursday.

During the meeting, the matter of lower remittances from various European and Asian countries came into discussion.

Briefing about the meeting, Bostan told media that the central bank has given them a freehand to increase the remittances from such countries where a large number of Pakistanis were living and working, but the remittance inflow (through official channels) was nominal.

Spain, for instance, is a country where a large number of Pakistanis reside. However, the remittances from Spain were around $11 million in June 2019, he said.

He named Japan, Switzerland, Belgium, Sweden, and Italy among the countries where Pakistani expats were in large numbers, but they did not use official channels to send remittances.

The remittances from such countries came in the range of $1.1612 million each in June, he added.

It was also highlighted that the exchange companies in Pakistan are allowed to collaborate with only five international money transfer companies like MoneyGram and XpressMoney. In contrast, the banking channels attract remittances through 170 of such companies.

Resultantly, the SBP has allowed the money exchanges to sign contracts with other international money transfer companies in those countries.

The State Bank will instantly approve the agreements, he said.

He said that the exchange firms intend to offer ‘cash’ incentives to the workers in such countries to attract remittances.

Bostan said that they have compelled the central bank to consider their old demand of paying a rebate of Rs. 6 per dollar to attract workers’ remittances.

He hoped that the two initiatives will increase the remittances from $2 billion to $67 billion a year.

Source: Pro Pakistani