August 18, 2022 (MLN): In order to facilitate the disbursement of home remittances, the State Bank of Pakistan (SBP) has allowed Exchange Companies (ECs) to act as sub-agents of Authorized Dealers (ADS) for the disbursement of home remittances in PKR to beneficiaries.
According to an SBP circular issued on Wednesday, ECs have been allowed to enter into agreements with ADs to act as their sub-agents for disbursement of home remittances in Pakistani currency (PKR) to beneficiaries, received by ADS through their international tie-ups.
As home remittance disbursement sub-agent of ADs, ECs have been advised to ensure that no home remittances-related incentive, as provided by the Government of Pakistan, shall be claimed by the ECs for the transactions disbursed as sub-agent of an AD.
ECs shall also not recover any funds from remittance recipients. However, ADs can share with ECs any part of the incentive for home remittances, as provided to ADs by the government.
In addition, all such transactions shall be recorded by the ECs in their Core Business Application on a real-time basis; however, ECs are not required to report such disbursements to SBP under ITRS, as ADs are reporting such transactions to State Bank under ITRS.
The amount disbursed under such agreement shall not be accounted for calculation of the outward remittance limit, as prescribed in Para 9(iii) (c) ibid.
As per the SBP’s circular, all other terms and conditions shall remain unchanged. ECs’ failure to comply with the above instructions shall attract enforcement action against the concerned Exchange Company under the relevant provisions of the Foreign Exchange Regulation Act 1947.
