Remittances

1. How would I send money home to my family? What are the charges for sending the remittance?

In Pakistan, Remittances refers to inflows of migrants’ and short-term employee income transfers (personal remittances).

Remittances play a crucial role in Pakistan’s economy, providing a much-needed inflow of dollars to boost foreign exchange reserves. At $19.3 billion, Pakistan ranks fifth in the world that receives the most remittances every year.

Pakistan receives most of its remittances from the Gulf countries, but within the region, Saudi Arabia and the UAE stand out. According to the Pew Research Center, Saudi Arabia was the leading source of remittance for Pakistan with $5.8 billion being remitted in 2016. Other leading countries were the UAE ($5.7 billion), the UK ($1.7 billion), the US ($1.33 billion), Kuwait ($1 billion), Canada ($565 million), Singapore ($531 million) Qatar ($483 million), Oman ($403 million), Bahrain ($305 million), Spain ($251 million), Italy ($248 million), Germany ($193 million), Australia ($122 million) and Afghanistan ($119 million).

Remittances play a major role in stabilising Pakistan’s external sector, as they make up almost half the import bill and cover the deficit in the trade of goods account. However, they have come under pressure due to global economic slowdown.  In the given circumstances, the State Bank of Pakistan has been trying to devise ways to increase home remittances.

The Government of Pakistan realises the importance of timely receipt of these remittances by the families of migrants and migrant workers and it has launched different initiatives to facilitate the flow of remittances through the legal channels.

2. Why It Makes Sense to Use Legal Remittance Networks

Alternative remittances could also mean unreliable transfers

Most people choose alternative remittance networks as they are often free or cheaper than legal remittance options. A friend or acquaintance may be prepared to deliver your cash at no cost if they are travelling to your home country. It may be perfectly acceptable if you trust the person and can be certain that your money will be delivered when you want, where you want and to whom you want.

However, what if your friend or acquaintance turns out to be untrustworthy? What if you have been tricked into using an intermediary who steals your funds? And even if they are trustworthy, what if they lose the money or are robbed in transit?

From a myopic viewpoint, alternative remittance services may be cheap or even free but they are not necessarily safe and secure. To a large extent you are risking your hard-earned money because there is no guarantee and you are entirely dependent on the schedule of the person who is delivering the money. If you need to transmit funds urgently or regularly, alternative remittances are not only risky but unreliable too.

Alternative remittances are illegal

‘Hundi’ or ‘hawala’ as it is called in Arabic-speaking countries involves the practice of money being transferred from one location to another via a network of dealers or brokers, based on the principle of honour rather than surety. Since such remittances operate outside the ambit of statutory financial regulations, they are highly susceptible to corruption and have been outlawed in some countries, based on anti-money laundering compliance programmes.

The advantages of money transfer organizations

Over the years, remittance networks have evolved from traditional modes of transfer to digital modes of money transfer. Thanks to the rise of affordable digital remittances, there is less reason for people to favour alternative remittances, which brings us to the compelling advantages of money transfer through legal channels.

3. Pakistan Remittance Initiative- PRI

In order to provide for an ownership structure in Pakistan for remittance facilitation, State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance launched a joint initiative called Pakistan Remittance Initiative (PRI). This initiative shall take all necessary steps and actions to enhance the flow of remittances.

The initiative has been taken to achieve the objective of:

1. Facilitating, Supporting, Faster, Cheaper, Convenient & Efficient flow of remittance
2. To create investment opportunities in Pakistan for Overseas Pakistanis:

• Inter Bank Fund Transfer (IBFT)
  Apart from RTGS, through ATM Switch, instant A/C credit facility is also available for beneficiaries through Inter Bank Fund Transfer (IBFT). Now the turnaround time for account credit has considerably reduced to maximum 30 minutes provided correct beneficiary account number (IBAN) is mentioned in the payment instructions.

• Cash Over the Counter (COC)
  PRI facilitated banks to introduce cash over the counter (COC) payments of Home Remittances being a popular mode of collecting remittances in Pakistan. All major banks have already started COC payments for remittances. This is an instant service introduced by PRI and has a great impact in

Foreign Exchange Remittance Card - OVERSEAS PAKISTANIS FOUNDATION

Remittances by Overseas Pakistanis, through normal banking channels, are a vital source of balance of payments support for the country. Funds channelled through Hundi or other means bypass legal conduits and deprive the country of much needed support. Cognisant of the problem of diminishing home remittances the government has initiated concerted program to facilitate those Overseas Pakistanis who remit money through normal banking channels. Towards this end, a special package of Foreign Exchange Remittance Card (FERC) has been introduced by the Ministry of Finance in September 2001 to facilitate the overseas Pakistanis community. OPF has been nominated as the implementation authority.

Further information can be found in this pamphlet.

Incentives

Overseas Pakistanis remitting foreign currency equivalent to US$2,500 to US$ 50,000 per annum are entitled to the following incentives:

• Five categories of remittance cards as per amount remitted.
• Free Issuance and Renewal of passport on urgent basis.
• Separate counters for special handling at arrival and departure lounges at all International Airports in Pakistan.
• Duty credit can also be utilised for seven items with fixed duty i.e., television, deep freezer, refrigerator, microwave oven, cooking range, washing machine and air conditioner.
• Duty Credit in Pak. Rupees as per category of remittance card.

Admissibility

• The duty credit is admissible to a Pakistani national holding Foreign Exchange Remittance Card (FERC) once during validity of card.
• The duty credit can be utilized for the accompanied, unaccompanied baggage or any purchase from any duty-free shop.
• The duty credit under this scheme is not utilizable on import of vehicles.
• Utilisation of duty credit is endorsed by Customs on the passport of a FERC holder.
• The incentives are available for one year from the date of issuance of remittance cards.

Eligibility Criteria

Following is the Eligibility Criteria for Remittance Card.

• The applicant should be a Non-Resident Pakistani.
• Remitted amount in Foreign Currency should be equivalent to US$ as per table below for issuance of Remittance Cards.

Remittance is acceptable which has been made to a Pakistan Rupee Account or which has been converted into Pakistan Rupee from a Foreign Currency Account through bank.

Following are not eligible for FERC:

• Infant, Minors and persons below the age of 18 year are not entitled for FERC.
• Students are not entitled for FERC.
• Amount remitted in Foreign Currency Account in Pakistan and not converted/encashed into Pak Rupee Account through the bank.
• Receipts of amount exchanged from Money Exchange Companies are not acceptable.
• ATM Receipts without the identification of the Remitter’s name.

How to Apply

• The application form can be obtained from OPF website, Pakistan Missions abroad, OPF Head Office Islamabad and through Regional Offices located at Karachi, Quetta, Lahore, Multan, Peshawar and Mirpur (AJ&K).
• The Pakistan Mission dispatch the application form to OPF Head Office Islamabad for issuance of FER Card after proper verification.
• OPF issues the card and dispatch to concerned Pakistan Mission for onward deliverance to the applicants.
• Card will not be dispatched to the applicant abroad.
• One year back receipts of remitted amount will be accepted from the date of application for issuance of FER Card.

Delivery

• OPF would return the prepared Remittance Cards to the concerned Pakistan Mission through diplomatic bag.
• FERC would be dispatched to the given address in Pakistan on the request of the applicant in writing.
• No Remittance Card would be dispatched on the individual address abroad.

Focal Person

Assistant Director (FERC)

• 0092 51 9048288-289
• This email address is being protected from spambots. You need JavaScript enabled to view it.

Related Links

• Pakistan Remittance Initiative (PRI)
• State Bank of Pakistan (SBP)
• Federal Board of Revenue (FBR)
• Baggage Rules
• Customs Rules/ Acts

Register Online

http://210.56.29.82/wp/login.aspx

4. Further remittance options

Banking Channel

If you have a Bank account, you can send remittances back through your bank. Most Pakistani banks have branches in middle east and major destination countries worldwide.

Western Union

https://www.westernunion.com

MoneyGram

https://www.moneygram.com/

Transfast

https://www.transfast.com/pakistan/send-money

Azimo

https://azimo.com/en/how-it-works

MoneyCorp

https://www.moneycorp.com/en-gb/campaigns/partners/partner-euros/

Telenor Easy Paisa

https://www.easypaisa.com.pk/international-home-transfer-through-easypaisa-shop

5. Contacts: Pakistan Remittance Initiative- PRI

PRI Banks

6. PRI- Frequently Asked Questions (FAQ)

Can I send money to a bank without having a bank account in Pakistan?

Yes, you can. The beneficiary will receive the remittance in cash form.

What is the difference between Money Exchange and Banks?

There is no difference between the two as long as they are both certified. If you provide me your city, I can assist you in locating the nearest branch or exchange.

How many foreign accounts are available in Pakistan?

Currently Pakistan Banks are offering 4 foreign currency accounts.

1. USD
2. GBP
3. EURO
4. YEN

Is Western Union affiliated with PRI?

 No, at this time Western Union is not affiliated with PRI.

Does the PRI come under the laws of State Bank or Government?

It is a joint initiative of 3 entities; State Bank of Pakistan, Ministry of overseas Pakistanis and Ministry of Finance

If the sender is sending the remittance in cash to cash mode, can the beneficiary collect the remittance from any other bank besides the beneficiary bank?

 No, in cash to cash mode, beneficiary can only collect the remittance from the beneficiary bank.

Are there any taxes on Remittance?

 No, there are no taxes.

What is the turnaround time (TAT) to receive remittance in Pakistan?

Cash to Cash: As low as 10 min
Account to Account: Minimum 24 Hours to maximum 48 Hours

What conversion rates will be applied on remittances?

The same conversion rates will be applied at the time of sending the remittance. Sender needs to confirm the rates with the affiliated bank or Exchange Company at the time of sending the remittance.

What are the charges for sending the remittance?

If you are remitting below $200 there will be charges, which the sender entity will confirm you at the time of remittance. If sending entity is on free send model then and sending remittance equals to or above $200 then it is free of cost. Otherwise, charges will be informed by the sending entity.