SBP Announces More Incentives to Attract Foreign Currency Remittances
The State Bank of Pakistan (SBP) has revised its incentive structure to further encourage Commercial Banks, Microfinance Banks (MFBs), and Exchange Companies (ECs) to enhance their efforts in mobilizing home remittances.
Under the new structure, Exchange Companies (ECs) will receive a base rate of Rs. 2 for each USD of home remittances surrendered to SBP-designated banks. Additionally, ECs will be paid Rs. 3 for each incremental USD surrendered, for growth in home remittances up to 5 percent or $25 million (whichever is lower) compared to the previous year. For incremental remittances above 5 percent or over $25 million, ECs will receive Rs. 4 per USD.
Starting in 2022, ECs are allowed to maintain separate foreign currency accounts for each Money Transfer Operator (MTO). These accounts can be used to receive home remittances related to commission/fee or exchange gains, provided that all such funds are surrendered to the interbank market on the same day.
However, the incentives under this scheme are applicable only to the foreign exchange generated through home remittances. The SBP will evaluate the performance of ECs on a monthly basis and reimburse payments accordingly. Any required adjustments will be made on a consolidated basis in the last quarter of the Fiscal Year.
These revisions will take effect from October 01, 2024. The operational instructions for implementing the incentive scheme for ECs will be communicated separately.
For Commercial Banks and Microfinance Banks (MFBs), a different incentive scheme has been announced. To further motivate these institutions to increase remittance inflows, the SBP will reimburse SAR 20 for all eligible home remittance transactions of $100 and above. An additional reimbursement of SAR 8 per incremental eligible transaction will be made for up to 10 percent or $100 million growth in home remittances over the previous year (whichever is lower). For growth exceeding 10 percent or $100 million in home remittances over the previous year, an additional reimbursement of SAR 7 per incremental eligible transaction will be provided.
The SBP will also evaluate the performance of Commercial Banks and MFBs on a monthly basis and reimburse payments accordingly. Any required adjustments will be made on a consolidated basis in the last quarter of the Fiscal Year.
These revisions will also take effect from October 01, 2024. The operational instructions related to the implementation of the T.T. charges scheme will be communicated separately.
