Government sets aside Rs80bn to incentivize home remittances

September 15, 2023 (MLN): The caretaker federal government has allocated Rs80 billion in terms of incentives/schemes for home remittances to encourage the flow of remittances through formal channels, Caretaker Finance Minister Dr Shamshad Akhtar revealed on Friday during a televised address. 

Of Rs80bn, Rs20bn has been released to the State Bank of Pakistan today, she added.

She further highlighted that the central bank already offers five schemes to encourage remittances. 

Under the first scheme, those sending remittances above $100 can receive them without charges or fees.

The other scheme offers remittance senders points for every remittance, which they can use to access services and goods from various government institutions at discounted rates.

According to the third scheme, the government will also provide incentives to exchange companies.

Under the fourth scheme, incentives are given in exchange for marketing efforts to encourage sending remittances through legal means by financial institutions.

The fifth scheme is a lucky draw in which cash prizes will be awarded through a lottery among those who send more remittances through legal means.

To note, workers' remittances have decreased by 23.74% YoY in August to $2.09bn, compared to $2.74bn in the same month of last year, the latest data issued by SBP revealed today.

Meanwhile, on a monthly basis, workers' remittances increased by 3.15% MoM compared to $2.03bn in July.

The inflows mainly came from Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States of America, with Saudi Arabia being the largest contributor at $490.1 million.

On a cumulative basis, in 2MFY24, the total remittances stood at $4.12bn compared to $5.26bn worth of inflows received in 2MFY23, depicting a fall of 21.57% YoY.

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