KARACHI: The State Bank of Pakistan (SBP) has implemented stricter reporting measures for monthly foreign exchange returns submitted by banks, aiming to ensure more accurate data on remittances.
This decision, announced on Wednesday, comes in response to inconsistencies observed in the reporting of workers’ remittances by authorized dealers (banks).
SBP pointed out that many banks had been reporting the country of location of the head offices of money transfer companies, rather than the original country of the remitter. For example, money transfer companies such as IME Malaysia may facilitate the transfer of funds from the UAE, but the remittances are being reported as originating from Malaysia, which distorts the actual country-wise remittance statistics. This misreporting has led to discrepancies in the data, making it difficult to assess the true flow of remittances across borders.
To address this issue, SBP has now directed all authorized dealers to accurately report the original country of the remitter when submitting data through the Integrated Treasury Reporting System (ITRS). This move is aimed at improving the transparency and accuracy of remittance data in the country. The SBP also noted that due to the necessary developments on the IT side and the requirement to gather data directly from money transfer companies, banks will begin reporting based on the original country of remitter starting from July 2020.
Moreover, to ensure that the data remains comparable over time, SBP has mandated that authorized dealers report revised remittance data for the period between July 2019 and June 2020 by July 15, 2020. This adjustment will help establish a more accurate historical record of remittances, enabling policymakers and analysts to better understand the trends and sources of remittance inflows to Pakistan.
SBP’s stricter reporting requirements are expected to lead to more reliable statistics, which will be crucial for assessing the role of remittances in the country’s economy, particularly in the context of foreign exchange reserves and economic stability. These reforms are part of SBP’s broader efforts to improve transparency and ensure that Pakistan’s remittance data accurately reflects the real economic flows.