SBP Asks Banks to Make it Easier to Send Remittances for Overseas Pakistanis

State Bank of Pakistan (SBP) has asked all commercial banks to facilitate overseas Pakistanis for sending remittances on the accounts of investments, bills, fees, and charges to different corporations and entities based in Pakistan.

According to the circular, the central bank stated that overseas Pakistan could send their charges and fees through banks’ accounts of electricity companies, gas companies, telecoms, educational institutions and universities accredited by HEC.

Expatriate Pakistanis from different countries can also make payments to super stores, hospitals etc. in their consumers’ accounts in Pakistan. They will be also facilitated to pay bills of their credit cards and premium to insurance companies.

They can also make property in the housing schemes of reputed real estate builders/developers and housing societies doing direct payments on companies’ banks account through installment of property such as residential plots, flats and buildings etc.

They are not allowed to remit money from different countries on the account of equity/participation in an enterprise.

The central bank directed commercial banks to facilitate Pakistanis located in different cities in the country for getting their pensions in bank’s accounts from various governments, public and private organizations based in different countries.

These pensioners are allowed to receive remittances up to Rs. 250,000 per month. Pakistanis having served in different countries now will get easily transferred their pensions in their banks’ accounts.

The central bank also directed banks to facilitate freelancers for getting their remunerations from different countries in their personal accounts in Pakistan.

Benefits of These Measures To Facilitate Overseas Pakistanis

The benefit of these measures to be adopted by banks will facilitate overseas Pakistanis in a way that they will not only carry out their business activities and investments plan in the country but it will also attract handsome remittances inflows to contribute to foreign exchange reserve in the country.

The central bank identified specific issues which overseas Pakistanis are being faced at present. Providing facilities to them will cause additional inflow of remittances in the country.

According to an estimate, remittances inflows in Pakistan could be enhanced to $30 billion from $20 billion per annum if overseas Pakistanis use proper banking channel to remit their money.

It is pertinent to mention here that the central bank has come up with these methods on the directives of PM Imran Khan who took decision to provide incentive of sending remittances for overseas Pakistanis.

SBP Instructions To Banks & Money Transfer Agencies

In this regard, Authorized Dealers (ADs), banks and money transfer agencies, are now allowed to carry out transactions under Business to Customer (B2C) and Customer to Business (C2B) through foreign correspondent entities under their existing/new home remittance agency arrangements.

SBP directed that Ads (Banks and Money Transfer Agencies) shall ensure foreign correspondent entities have a robust infrastructure and the capacity to comply with legal/regulatory requirements pertaining to AML/CFT.

Payments from/to reputed and well-known foreign organizations/entities shall be accepted and processed by the ADs. ADs shall ensure screening of all sending/receiving persons/entities against relevant resolutions of United Nations Security Council (UNSC), Schedules of Anti- Terrorism Act, 1997 etc.

ADs shall receive payments related to abovementioned transactions in existing Non-Resident PKR Account of overseas tie-ups.

Transactions received on behalf of foreign entities may be transferred from one AD to another AD through MT-103/RTGS without prior approval of SBP.

Foreign correspondent entities shall include the following information in the message or payment instruction which should remain with the funds/wire transfer throughout the payment chain:

  • name of the originator;
  • originator’s account number (or unique reference number which permits traceability of the transaction);
  • name of the beneficiary;
  • beneficiary’s account number (or unique reference number which permits traceability of the transaction).

All ADs shall enter into separate agreements with commercial entities to ensure efficient execution of responsibilities and mechanism to resolve disputes between customers and businesses in case of delay of payments etc.

In case where the amount of remittance is not credited/paid to/on behalf of the beneficiary, the beneficiary shall be entitled to a compensation of sixty five (65) paisa per thousand rupees per day for the number of days credit/payment on account of delay. The banks are, therefore, directed to ensure that the amount of remittances is credited/paid to/on behalf of the beneficiary within time frame laid down.