Home Remittances: Rs 10b diverted to pay banks
Aftab Ahmed
Islamabad: The government has diverted Rs 10 billion funds from the allocation of subsidy, agriculture, and NDAM to reimburse t.t charges to banks on home remittances.
Last year, the State Bank of Pakistan (SBP) had hiked the profit margins of international and domestic commercial banks and currency dealers to bring home remittances through the legal channel.
The government had also taken this measure to counter the risk of a striking drop in the foreign currency inflows, better management of home remittances in Pakistan, and foreign exchange reserves to respond to the coronavirus pandemic.
The government had doubled the transfer fee to 20 Saudi riyals (around $5) to pay to the international fund transfer firms on a transaction amounting to $100-200 to Pakistan.
It had also believed that an increase in transfer fees would help control illegal transactions. It also helped address concerns of the Financial Action Task Force (FATF).
The banks receive telegraphic transfer charges against home remittances. The government had from it from 10 to 20 SAR for transactions between $100 and 200. This reimbursement for telegraphic transfer charges was also available only to banks and microfinance banks.
The Cabinet Division informed that the subject Additional Agenda item was received in the Cabinet Division after the deadline of seven days before the meeting, as stipulated in Rule 18(6) read with Rule 23(4) of the Rules of Business, 1973.
Therefore, the Secretary Finance Division requested the Chairman ECC, considering it on an urgent basis. The Chairman ECC allowed the request to table it in the meeting.
Finance Division in Islamabad briefed the forum about the case and requested ECC for Technical Supplementary Grant (TSG) amounting to Rs 10 billion from IB2057-Provision for medical equipment, NDMA & Agriculture, Demand No.56-Subsidies, and Miscellaneous Expenditure in favor of Cost Center KA-1081-Reimbursement of TT Charges to Banks in Pakistan on Home Remittances, Demand No.60-other expenditure of Finance Division.
The Economic Coordination Committee (ECC) of the Cabinet considered the summary the Finance Division submitted “technical
Supplementary Grant of Rs 10 billion for reimbursement of T.T. Charges on Home Remittances, and approved the proposal.
