KARACHI: Remittances by overseas Pakistanis are likely to continue growing in the current and next financial year and cross the $20 billion mark because of intensifying competition among banks, enhanced services standards of banks and improved level of awareness among expatriates.
The number of banks branches opening in different countries has increased significantly, whereas different channels were established by banking companies in collaboration with various money transfer services, showing a double digit growth of 16.5 percent in the closing financial year with remittances inflow recorded at $18.4 billion. The role of Pakistan Remittances Initiative (PRI) under the supervision of SBP is laudable to bring all banks at one platform instead of letting them doing business separately, said National Bank of Pakistan and Global Home Remittance Management Group/Corporate Communication Division Senior Executive Vice President (SEVP) Khalid Bin Shaheen, in a programme ‘Boss’ aired recently on Business Plus.
The PRI provides an umbrella to all commercial banks with strong support because it gives directions to banks to operate effectively in brining remittances homeland from various countries, he explained. Under this department, leading banks have signed many tie-ups with global foreign exchange and money transfer companies to channelise this business towards its growth and expansion.
National Bank of Pakistan (NBP) has grown significantly our business of remittances in this period despite cutting-edge competition within the bank industry with the products of NBP Fori Cash, NBP Fori Transfer and new products NBP Fori Accounts, Khalid maintained.
These products could compete well with all leading banks to contribute a vital role for national cause with all available branches in various parts of the country. Now, the bank has attained a strong footing in this particular business in the presence of those banks having established business for decades, he added.
Overseas Pakistanis are sending remittances from various countries, however, more than 60 percent of the remittances inflows do come from Middle East countries and the rest of 40 percent arrive from other world.
Out of $1.6 billion remittances in July, remittances from Saudi Arabia recorded at $474 million; from UAE recorded at $367 million and from Gulf Cooperation Countries (GCC) countries recorded at $197.86 million.
This is because of the reason that the government exported skilled and semi skilled manpower to Middle East countries in past many years which created a strong presence of Pakistanis in these markets.
The tie-ups in Middle East countries with local banks in collaboration with Pakistani government made a room for our country to establish a comprehensive business case, remarked Khalid.
Earlier from the PRI, Pakistan was lacking an efficient system at banks to bring remittances in hassle free environment without unnecessary delays. It was used to take 10 to 15 days for money transfer from one country to Pakistan, on the contrary, the channel of Hawala and Hundi was effective than old banking channel. Khalid said, “Now we can say the remittances could rapidly and instantly transfer from different countries to Pakistan, even in the home place of overseas Pakistan as the level of Pakistani banks and NBP, of course, is standing at par with international banks.”
Remittances are the second line of the economy, which brings foreign exchange in the country. It is going to surpass foreign exchange the country receives from exports to be first lifeline in coming years, the senior vice president informed.