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The remittance inflows can be increased by more than $5 billion to $20 billion to Pakistan through the introduction of incentives and various innovative services for Pakistanis working in different Gulf counties, experts said.
As per State Bank of Pakistan’s (SBP) statistics, the remittances inflows from these countries decreased to $14.28 billion in the outgoing financial year 2022-23 as compared to inflows of $17.22 billion received in the financial year of 2021-22, showing a staggering 17 percent year-on-year or a massive loss of $2.94 billion foreign exchange to the country.
According to experts the planned incentives for overseas Pakistanis will encourage them to use the banking channels and the country will be able to receive remittances of significant value within a short period of time.
Pakistan’s remittances stand at $2.2bn in June, 3.9% higher month-on-month
Talking exclusively to Business Recorder, Ibrahim Amin, a financial consultant and Chairman of Dellsons Associates, pointed out that remittances are consistently decreasing to Pakistan from Gulf countries in spite of the fact that the number of workers moving to these countries has been on the rise.
Apart from Roshan Digital Accounts, banks should also collaborate with fintech operators for attracting remittances from overseas Pakistani doing blue-collar jobs through easy-to-use Apps and SMS-based services, he suggested.
The inflows of remittances shifted to non-banking channels commonly known as the Hawala/Hundi due to high margins on the exchange rates offered by them to the families of overseas Pakistanis residing in different cities of the country, resulting in the consistent drop in inflows through banking channels, he added.
The government’s withdrawal of the incentive to banks (that is 20 Riyal rebate as a remittances fee on the remittances originating from KSA) may also have diverted some inflows to informal channels, he further stated.
Ibrahim Amin suggested that the government in collaboration with private banks and fintech operators should take an aggressive approach to bring back the remittance inflows o the track of formal banking channels to capitalize its impact on macroeconomic indicators such as foreign exchange reserves and the stability of the Rupee versus Dollar.
The innovative and digital service will play an instrumental role in reclaiming the potential inflows of handsome remittances to the country from the Gulf region, he added.
The banking regulator and banks should take different stakeholders onboard to engage overseas Pakistanis in the successful execution of innovative services. Overseas Pakistanis in Gulf countries should be assembled on a regular basis on different occasions to create awareness and relationships with them. In this way, they will be informed about the innovative services and incentives offered by the banks and the government to facilitate them, he suggested.
As the private sector, Dellsons Associates has engaged four major banks including United Bank Limited, Habib Bank Limited, Bank Alfalah and Dubai Islamic Limited to incentivize Pakistani workers in Gulf countries to use proper channels, he added.
In this regard, we have plans to build relationships with overseas Pakistanis mainly in GCC states through seminars and meet-ups with them to train them using various digital financial services of the Pakistani banks for sending remittances to their relatives in their homeland.
In 2022, as far as 0.741 million Pakistani workers moved to Gulf countries in diverse fields with the Kingdom of Saudi Arabia only receiving 0.541 million laborers from Pakistan. In the first half of 2023, 0.189 million workers also shifted to Gulf countries from different cities of Pakistan, according to data released by the Bureau of Emigration and Overseas Employment.
The share of overseas Pakistani workers in overall remittances inflow stands at 52% from the overall inflows of $27.02 billion reported in FY23.
Chairman Dellsons Associates said the remittances inflows could be increased by $5 billion additional from this region during this fiscal year and some $ 10 billion in the next few years if concrete measures are rolled out by the government in collaboration with the private sector and other stakeholders, which can significantly improve the foreign exchange inflows and offset the current account deficit alike.
Facilitating communities in the Gulf region along with sustainable policies is indispensable to motivate overseas Pakistanis to utilize informal banking channels besides the launch of easy-to-use innovative services, he concluded.
Incentives, innovative services: Remittance inflows from GCC states may soar to $20bn: experts
KARACHI: The remittance inflows can be increased by more than $5 billion to $20 billion to Pakistan through the...
www.brecorder.com
