Islamabad: In order to enhance the flow of domestic remittances through formal channels and improve foreign exchange liquidity in the interbank market, the State Bank of Pakistan and the Pakistani government have introduced various policy measures from time to time.
In the same spirit and with federal approval, SBP has launched a new incentive program for Exchange Corporations (ECs). Under the program, exchange companies will be required to hand over 100 percent of domestic remittances mobilized in the interbank market, and in return, they will receive PKR 1 for every dollar returned.
Exchange companies, with the help of remittance operators, send remittances back to domestic bank accounts. Earlier, ECs were required to hand over at least 15% of domestic remittances in the interbank market.
To implement the scheme, the State Bank of Pakistan has now revised its regulations on exchange company payments for inward remittances. The cash exchange company will refund 100% of the foreign currency equivalent to US dollars it receives for remittance into the country in the inter-bank market on the same day.
As EC mobilizes a large number of domestic remittances, the scheme will help to improve foreign exchange liquidity in the interbank market, and the incentives provided are expected to encourage all exchange companies to bring in more and more domestic remittances by reaching out to a wider group of people . Remitters and their beneficiaries in Pakistan.
