SBP Ends Remittance Incentive Schemes for Banks After IMF Pressure

The State Bank of Pakistan (SBP) has abolished two incentive schemes for banks linked to home remittances after their growing cost attracted scrutiny from the International Monetary Fund (IMF), marking a significant shift in the country’s remittance policy.

In separate circulars issued on Thursday, the central bank announced the discontinuation of the Sohni Dharti Remittance Programme (SDRP) and the Telegraphic Transfer Charges Incentive Scheme (TTCIS) with effect from July 1, 2026.

Under the SDRP, overseas Pakistanis earned reward points for sending money through formal banking channels. The SBP said no new reward points will be awarded for remittances sent from July 1 onward. However, points accumulated until June 30, 2026, can still be redeemed until June 30, 2027, after which the program will be completely discontinued.

The SBP also ended the TTCIS, under which banks received incentives for processing eligible remittance transactions. Despite the scheme’s discontinuation, banks will continue to provide qualifying remittance services free of charge to both senders and beneficiaries.

The TTCIS had grown to an annual cost of Rs. 100 billion to Rs. 120 billion. The sources said the IMF questioned the continuation of the scheme because the payments were no longer linked to banks’ performance, particularly as digital money transfer technologies have become more widely available.

The move does not affect the Pakistan Remittance Initiative (PRI), another major remittance facilitation program that remains in place. Industry sources said banks continue to earn significant income under the PRI, although the exact amount has not been officially disclosed.

Pakistan has witnessed record growth in workers’ remittances in recent years, supported by higher overseas employment and stronger inflows from Gulf countries. Remittances reached about $40 billion in FY2024-25 and are projected to increase further to $41 billion to $42 billion during FY2025-26, making them one of Pakistan’s largest sources of foreign exchange.