Branchless Banks Asked to Give Rs. 100 of Mobile Balance on Remittances

State Bank of Pakistan (SBP) has asked branchless banking (BB) players to give free airtime of Rs. 100 to their account holders, who arrange to receive remittances of minimum $100 from their overseas senders.

The central bank also announced to give an incentive to BB companies, which is a Rs. 50 grant to be provided to them against the services of processing $100 remittances and processing a Rs. 100 airtime for the account holder.

SBP circular stated,

Against each 100 USD being received as Home Remittances, BB providers will arrange to extend air time of amount equal to PKR 100 in Home Remittances Account (HRA) holder’s registered SIM. For providing the air time of each Rs.100/- GoP will provide a smart grant of Rs. 50 to concerned BB provider on account of technical upgradation of their systems & operations for Financial Inclusion.

The decision was taken to facilitate swift and cost effective inflow of Home Remittances through BB channels and to increase financial inclusion through enhanced usage in BB/mobile wallets; To that end, SBP has decided to introduce a new category of Home Remittance Account under the ambit of Branchless Banking Regulations.

The fresh instructions were issued to all Branchless Banking (BB) provider banks including Commercial Banks, Islamic Banks and Microfinance Banks (MFBs) termed as Financial Institutions (FIs) or banks.

New Regulations

• All individuals having a Pakistani nationality can receive Home Remittances through m-wallet accounts from different countries. Individuals can maintain only one account at his/her CNIC at a bank.
• An individual or remittances account holder can receive an amount of Rs. 1,500,000/- credit in HRA through Home Remittances.
• Debit from an HRA to any other account may be made up to Rs.100,000/- per day .
• The transaction limit for withdrawal of cash is Rs. 50,000 per day and the total Cash withdrawal limit per month is Rs. 500,000.
• Banks shall provide electronic mini statement/statement of account on customers’ demand and/or within the frequency set under relevant SBP requirements.

The beneficiaries would be able to withdraw cash from ATMs, respective bank branches or thousands of BB agents. They would also be able to make digital payments to settle their utility bills etc. by using their m-wallets.

M-Wallet Holders Can be Converted to HRA Holders

Existing m-wallet holders intending to open HRA shall be required to undergo a one time registration process (to be designed by the FIs) including information on intended senders and relationship with beneficiaries and expected originating remittance countries.

The existing m-wallet holders who register for Home Remittances Account through mobile applications or other remote means shall be required to personally visit a nearby agent once for face to face contact and for cash withdrawal from their HR Account.

Important Guidelines for BB Players

• NADRA’s Biometric Verification shall be conducted at the time of opening an account to activate the HRA instantly.
• The cost of such verification should not be passed on to the customer to encourage inflow of remittances.
• BB players shall ensure compliance of requirements for inward and outward wire/fund transfers outlined under AML/CFT Regulations and other laws as amended from time to time.
• BB players shall take necessary action(s) in accordance with law including filing Suspicious Transaction Reports (STRs) with FMU in case any unusual transaction/activity or high risk factor is observed.
• BB providers are advised to upgrade their systems, controls and procedures to incorporate the requirements laid down for the Branchless Banking Home Remittances Accounts within one month.
• The banks and microfinance banks are advised to ensure compliance with these instructions as non-compliance shall be dealt with, in accordance with the relevant provisions of law.

Branchless Banking on The Rise

Branchless Banking industry has progressed remarkably during the last few years. As of June 2017, more than 27.3 million mobile wallets (branchless banking accounts) have been opened while branchless banking agents have increased to 402,000.

This growth has resulted in providing basic banking services close to the customers’ locations, thereby saving their time and travelling costs. It is high time to leverage technology-led-banking to provide tailor made solutions to the masses for satisfying their financial needs.