Daily Times

KARACHI: State Bank of Pakistan in coordination with is improving system for timely payment of remittance to the accounts of recipients in order to encourage overseas Pakistanis so that they could transfer money through official channels instead of Hundi/Hawala, said Jamil Ahmed, Deputy Governor, State Bank of Pakistan.

Addressing the event of awareness campaign launched by National Bank of Pakistan against insecure Hundi/Hawal, Jamil Ahmed asked banks to reduce their charges related to remittances to attract more people towards the banking channels. Besides, use of social media for marketing services for remittance may yield better results, he advised.

Remittances are life line for external account balance and play important role in order to keep the balance of payment deficit in check, he said adding remittances through official increased by 16 percent between 2009 and 2017, making Pakistan the largest recipient of remittances. ” It is indeed heartening to note that focused efforts of all stakeholders resulted in an increase in home remittances by 13.2% during the first two months of FY 18 after a fall of 3.1% in FY17. There is a need to maintain this momentum and positive growth trajectory in coming months,” he noted.

He noted that the focused area of inflow of remittance are being given priority. UAE, Saudi Arabia and other gulf countries contribute 87 percent to the remittance.

Earlier, addressing the participants, President of NBP, Saeed Ahmed said that the country facing challenge of balance of payment deficit and to meet this challenge the remittance play an important role. “Inflow of remittance could be much improved if banks adopt system of fastest payment of remittances to the recipients”, Ahmed observed.

Hundi/Hawala is used by a large number of overseas Pakistanis due to lack of proper information which affects the country gravely, he noted adding “If all remittances come via banking channels, our forex reserves will increase resulting better financial stability and improved standing of Pakistan in the International market.”

Talking about the campaign launched, President NBP said the docu-drama (Hundi ko lagao kundi) is not just about increasing the Remittance business of National Bank of Pakistan but the motive is much greater. “The idea is whatever money is coming into the country is routed through legal channels so Pakistan as a country can fully benefit.

Hundi / Hawala is illegal but mainly popular due to the perceived convenience it offers to the customers. Banks need to service the customers with an exceptional efficiency to compete, match and even surpass parallel services. The Banking industry need to enhance use of digital/branchless services. People need to be made aware and educated to use legal channels to transmit and receive money thru formal banking channels.”

He conceded that there were inefficiencies in the banks’ payment systems which are “difficult to handle but not impossible”.

Published in Daily Times, September 22^nd 2017.