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Tag: remittances

  • Sending foreign exchange overseas for trading illegal: SBP

    Sending foreign exchange overseas for trading illegal: SBP

    KARACHI: The State Bank of Pakistan (SBP) has said that sending foreign exchange outside Pakistan to overseas foreign exchange trading through any payment channel is not allowed.

    The SBP in a circular issued May 18, 2022 said that it had been observed a number of offshore foreign exchange trading, margin trading and contract for difference (CFD) trading websites/apps/platforms (such as OctaFX, Easy Forex, etc.) are offering their products to residents in Pakistan, luring public through social media advertisements to buy their products/services. Such buying by residents of Pakistan is a violation of section 4(1) of the Foreign Exchange Regulation Act (FERA) 1947.

    READ MORE: SBP makes permission must for import of mobile phone, cars

    Further, it has also been observed that banks are facilitating settlement/ payments through their payment channels to such offshore trading platforms.

    The SBP clarified that remittance of foreign exchange directly/ indirectly outside Pakistan to overseas foreign exchange trading, margin trading, and CFD trading apps/ websites/ platforms through any payment channel is not allowed as no general or special permission has been granted by the State Bank under section 5(1) of the FERA.

    READ MORE: SBP may raise policy rate by 100bps to 13.25%

    The central bank invited attention of banks towards section 4(1) of the Foreign Exchange Regulation Act 1947 (FERA), which provides, “except with the previous general or special permission of the State Bank, no person other than an authorized dealer shall in Pakistan, and no person resident in Pakistan other than an authorized dealer shall outside Pakistan, buy or borrow from, or sell or lend to, or exchange with, any person not being an authorized dealer, any foreign exchange”.

    Further, banks attention is also invited towards section 5((1(a)) of the FERA which provides, “Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the State Bank, no person in, or resident in, Pakistan shall— (a) make any payment to or for the credit of any person resident outside Pakistan”.

    READ MORE: Pakistan’s forex reserves fall to $16.37 billion

    In view of the foregoing, banks are advised to ensure compliance of aforesaid sections of the FERA and take all necessary measures, including the following, to stop payments to all such forex trading, CFD trading, margin trading websites/apps/platforms by their customers through any payment channel:

    — Inform their customers regarding inherent risks and illegality of such trading with any such person/entity.

    — Institute a mechanism of ongoing monitoring whereby such trading websites/ apps/ platforms are identified and blocked from making payments through any payment channel.

    READ MORE: Current account deficit swells to $13.78 bn in 10 months

    In case it is observed that a bank has failed to carry out the measures and has facilitated the transactions as outlined above, the State Bank of Pakistan may proceed against that delinquent Authorized Dealer under relevant provisions of the FERA and take any pecuniary or administrative action as deemed necessary.

  • Pakistan receives record monthly high $3 billion as remittances

    Pakistan receives record monthly high $3 billion as remittances

    KARACHI: Pakistan has received a monthly record workers’ remittance of $3.13 billion in the month of April 2022, the central bank said on Friday.

    The State Bank of Pakistan (SBP) said the remittances grew by 12 per cent in April 2022 to $3.125 billion as compared with $2.79 billion received in April 2021. Meanwhile, the country received $2.81 billion in the month of March 2022.

    READ MORE: SBP receives $2.2 bn as workers remittances in February

    The inflow of remittances recorded 7.6 per cent growth to $26.08 billion during the first 10 months (July – April) 2021/2022 when compared with $24.23 billion in the corresponding months of the last fiscal year.

    Pakistanis living in the USA have sent $2.556 billion during July – April 2021/2022, which is 20 per cent higher when compared with $1.4 billion in the same period of the last fiscal year.

    READ MORE: Remittances increase to record $18 billion in 7 months

    The SBP received an amount of $3.67 billion during the first ten months of the current fiscal year from Pakistani workers living in the UK as compared with $1.98 billion in the corresponding period of the last fiscal year, showing an increase of 9.9 per cent.

    Pakistanis living in Saudi Arabia sent an amount of $6.41 billion during the period under review as compared with $5.32 billion in July – April 2020/2021, showing a growth of 1.6 per cent.

    READ MORE: Pakistani overseas workers send $15.8 billion in 1HFY22

    The inflows of remittances from the UAE, however, posted a decline of 3.6 per cent to $4.90 billion during the first 10 months of the current fiscal year as compared with $5.08 billion in the same period of the last fiscal year.

    Pakistanis living in the EU countries have sent an amount of $2.80 billion during the first ten months of the current fiscal year as compared with $2.21 billion in the same period of the last fiscal year, showing a growth of 27.1 per cent.

    READ MORE: PM Imran launches incentive program for remittances

  • Pakistan receives highest ever monthly remittances

    Pakistan receives highest ever monthly remittances

    KARACHI: Overseas Pakistanis workers have sent $2.8 billion during March 2022, which is the highest ever monthly remittances received, the State Bank of Pakistan (SBP) said on Thursday.

    “With $2.8 billion of inflows during March 2022, workers’ remittances continued their unprecedented run of remaining above $2 billion since June 2020. This is the highest ever monthly level for workers’ remittances,” the SBP added.

    The latest number of remittances showed the inflows grew by 28.3 per cent in March 2022 when compared with $2.19 billion in February 2022.

    Meanwhile, the inflows also grew by 3.2 per cent in March 2022 when compared with $2.72 billion in the same month of the last year.

    Analysts attributed the record remittances to the holy month of Ramazan and festival of Eid ul Fitr. They said that overseas Pakistanis send money to their relatives ahead of festival. Furthermore, the worldwide high prices of end products also one of the reasons for record remittances during March 2022.

    Overall the country received $22.95 billion during July – March 2021/2022 as compared with $21.44 billion in the corresponding months of the last fiscal year, showing an increase of 7 per cent.

    Remittances inflows during March 2022 were mainly sourced from Saudi Arabia ($678 million), United Arab Emirates ($515 million), United Kingdom ($401 million) and United States of America ($300 million).

    — SBP receives $2.2 bn as workers remittances in February

    — Remittances increase to record $18 billion in 7 months

    — Exchange companies get incentive for dollar surrender

    — Incentives approved for exchange companies on dollar surrender

    — Pakistan’s remittances fall by 6.6% in November 2021

  • Remittances increase to record $18 billion in 7 months

    Remittances increase to record $18 billion in 7 months

    KARACHI: The inflows of workers’ remittances have increased to record $18 billion during the first seven months (July – January) 2021/2022, the State Bank of Pakistan (SBP) said on Friday.

    The remittances registered an increase of 9.35 per cent during the period under review when compared with $16.46 billion received during first seven months of the last fiscal year.

    READ MORE: Exchange companies get incentive for dollar surrender

    The SBP said that during the first seven months of 2021/2022, remittances have risen to a record $18 billion.

    At $2.14 billion in January 2022, workers’ remittances remained above $2 billion for the 20th consecutive month.

    READ MORE: Incentives approved for exchange companies on dollar surrender

    Remittances declined by 5 per cent compared to January 2021, partly reflecting an easing of travel restrictions. Compared to the previous month, they fell by 14.9 per cent due to seasonality.

    READ MORE: Pakistan’s remittances fall by 6.6% in November 2021

    Remittance inflows during January 2022 were mainly sourced from Saudi Arabia ($540 million), United Arab Emirates ($374 million), United Kingdom ($320 million) and United States of America ($208 million).

    READ MORE: ECC approves loyalty program for home remittances

  • Pakistan’s remittances fall by 6.6% in November 2021

    Pakistan’s remittances fall by 6.6% in November 2021

    KARACHI: The inflows of foreign remittances sent Pakistan’s workers have registered a decline of 6.6 per cent Month on Month (MOM) to $2.352 billion in November 2021 when compared with $2.518 billion in October 2021.

    According to statistics released by the State Bank of Pakistan (SBP), the remittances, however, grow 0.6 per cent in November 2021 when compared with $2.339 billion in November 2020.

    The SBP said: “With $2.4 billion of inflows during November 2021, workers’ remittances continued their strong streak of remaining above $2 billion since June 2020.”

    READ MORE: ECC approves loyalty program for home remittances

    Remittances inflows during November 2021 were mainly sourced from Saudi Arabia ($590 million), United Arab Emirates ($452.5 million), United Kingdom ($305.8 million) and the United States of America ($237.8 million).

    Cumulatively, the remittances grew by 9.7 per cent to $12.9 billion during first five months (July – November) 2021/2022 of the current fiscal year as compared with $11.77 billion in the corresponding period of the last fiscal year.

    READ MORE: FBR not to ask source of remittances sent through ECs

    The SBP said that the proactive policy measures by the government and SBP to incentivize the use of formal channels and altruistic transfers to Pakistan amid the pandemic have contributed towards the sustained inflows of remittances since last year.

    PM Imran launches incentive program for remittances
  • ECC approves loyalty program for home remittances

    ECC approves loyalty program for home remittances

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet of Thursday approved a loyalty program to encourage overseas Pakistanis to send remittances home through legal channels.

    The ECC meeting was chaired by the Finance Minister Shaukat Tarin. The finance ministry tabled the summary regarding incentives /rewards to overseas Pakistanis remitters under National Remittance Loyalty Program (NRLP) which has been branded as Sohni Dharti Remittance Program.

    The remitters will be awarded points against remittances sent by them to Pakistan through legal channels.

    After due deliberations, the ECC recommended that the option of cash redemption may only be offered to those overseas Pakistani remitters who return to Pakistan permanently.

    However, Overseas Pakistanis shall be qualified to avail services (such as PIA ticket, Mobile phone duty payment etc) against redemption of the accumulated points awarded under NRLP.

    Ministry of National Food Security and Research (NFS&R) presented a summary to update the forum about the cotton seed prices during the months of August and September 2021. The domestic prices remained above the threshold set, barring for couple of days due to rains. The ECC expressed satisfaction that farmers are getting their due prices.

    Ministry of National Food Security and Research (NFS&R) tabled a summary regarding allocation/release of 280,000 MT of wheat to the Utility Stores Cooperation (USC) till December 2021. A quantity of 90,000 MT has already been provided as an interim arrangement whereas the remaining 190,000 MT will be provided from PASSCO’s stocks (local or imported as per stock availability with PASSCO). The ECC approved the allocation/release of remaining 190,000 MT to USC to ensure smooth supply of wheat through chain of USCs across the country.

    On a summary moved by the Ministry for National Food Security and Research, the ECC recommended the allocation of total quantity of 300,000 MT of wheat to the AJ&K Government out of PASSCO stock during the current financial year. This includes 140,000 MT of wheat which has already been released to AJ&K by the Ministry of NFS&R as an interim arrangement. The ECC directed the referring division to provide wheat to AJ&K with a best possible combination of indigenous and imported wheat.

    The ECC considered and approved the summary tabled by the Ministry of Overseas Pakistanis and HRD regarding Annual Budget for the FY2021-22 & revised Budget for the FY 2019-20 of the Employees Old-age Benefits Institution (EOBI).

    The ECC considered and approved a Technical Supplementary Grant (TSG) amounting to Rs. 6.4 billion in favour of Cabinet Division for Special Technology Zones Authority (STZA) during the current FY-2021-22.

    Lastly, on a summary tabled by the Ministry of Commerce regarding export of tomatoes and onions, the ECC after detailed discussion, constituted a sub-committee headed by the Finance Minister to consider monthly projections regarding export of perishable commodities on basis of estimated production, consumption and surplus to be presented by the M/o Commerce.

    It was decided that decision to export above mentioned vegetables will be taken by the sub-committee.

    Federal Minister for Planning Asad Umar, Federal Minister for Industries and Production Khusro Bakhtiar, Minister of State for Information Farrukh Habib, Advisor to PM on Commerce Abdul Razak Dawood, Governor SBP Dr. Reza Baqir, Secretary Power Division, Secretary M/o NFS&R, Secretary Commerce, Chairman FBR, Chairman SECP, MD USC and other senior officers participated in the meeting.

    FBR not to ask source of remittances sent through ECs
  • FBR not to ask source of remittances sent through ECs

    FBR not to ask source of remittances sent through ECs

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that tax authorities will not ask source of foreign exchange not exceeding Rs5 million remitted through exchange companies (ECs) or money transfer operators.

    The FBR issued explanation to the Tax Laws (Third Amendment) Ordinance, 2021. The revenue body said Section 111(4) of Income Tax Ordinance, 2001 provides exclusion from unexplained income or assets to any amount of foreign exchange remitted from outside Pakistan through normal banking channels not exceeding Rs5 million en-cashed into rupees by a scheduled bank.

    The amendment through insertion of an explanation has now also treated remittances through Money Service Bureaus (MCBs), Exchange Companies (ECs) and Money Transfer Operators (MT0s) or other similar entities as foreign exchange remitted from outside Pakistan through normal Banking channels.

    After a formal clarification from SBP, Circular No. 05 of 2022 was issued by the Board.

    Through this amendment the FBR’s clarification has now been made part of legislation to facilitate foreign remittance and align the law with innovations that have taken place in the banking industry.

    Through the Circular No. 05 of 2022, the FBR has withdrawn all the appeals pertaining to income tax exemption on inward foreign remittances.

    “In order to win the trust of the taxpayers and spare the public resources for more productive use elsewhere, all departmental appeals filed on the strict sensu interpretation of the law, be withdrawn immediately, and no further appeals be filed if one all fours of this clarification,” according to the circular.

    Further, all circulars and instructions issued on the matter previously issued stand rescinded, the FBR added.

    FBR withdraws all appeals in exemption on remittances
  • SBP to launch rewards for inward remittances

    SBP to launch rewards for inward remittances

    ISLAMABAD: State Bank of Pakistan (SBP) will launch incentives/ rewards for overseas Pakistanis on transactions of inward remittances.

    The SBP will launch a mobile phone application for overseas Pakistanis, which will offer incentives/rewards to overseas Pakistani against each remittance transaction in accordance under criteria.

    The above application will be formally launched towards the end of October 2021, this was discussed at a meeting of Economic Coordination Committee (ECC) of the Cabinet of Wednesday.

    Finance Minister Shaukat Tarin chaired the meeting. The Secretary Finance made a detailed presentation on National Remittance Loyalty Program (NRLP) before the Committee.

    He stated that remittances form backbone of the economy. The proactive policy measures by the Government and the SBP have incentivised the overseas Pakistanis and encouraged them to remit their hard earned money through formal channels.

    This has contributed in achieving record remittance of $29.4 billion in the last fiscal year. It’s a clear reflection of confidence in Pakistan’s economy by overseas Pakistanis.

    After due deliberations, the ECC approved the structure and estimated financial impact of the NRLP with a view to incentivize remitters to transfer funds through formal channels thus further strengthening the inflow of remittances.

    The Finance Minister directed to exercise due diligence before the launch for seamless integration with all service providers to ensure smooth working of NRLP.

    Among others, Federal Minister for Interior Sheikh Rasheed Ahmed, Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Energy Hammad Azhar, Federal Minister for Planning and Development Asad Umar, Advisor to the PM on Commerce Abdul Razak Dawood, Advisor to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Power & Petroleum Tabish Gauhar, SAPM on Finance and Revenue Dr. Waqar Masood, Federal Secretaries and other senior officers participated in the meeting. Governor State Bank of Pakistan Reza Baqir also participated through a video link.

    Remittances flow $2bn for 13th consecutive month
  • Remittances flow $2bn for 13th consecutive month

    Remittances flow $2bn for 13th consecutive month

    KARACHI: The inflows of workers’ remittances continued streak of over $2 billion for a record 13th consecutive month to reach historic annual high at $29.4 billion in 2020/2021, State Bank of Pakistan (SBP) said on Tuesday.

    The SBP said that with inflows of around $2.7 billion in June 2021 (9 percent growth (y/y) and 8 percent growth (m/m)), workers’ remittances continued their unprecedented streak of above $2 billion for a record 13th consecutive month.

    Seasonal pre-Eid related inflows helped to further boost remittances level during June.

    On a cumulative basis, remittances rose to a historic annual high of $29.4 billion.

    This has helped improve the country’s external sector position despite the challenging global economic conditions in the past year.

    Remittances registered a substantial 27 percent growth in FY21 over last year, the fastest rate of expansion since FY03.

    Remittance inflows during FY21 were mainly sourced from Saudi Arabia ($7.7 billion), United Arab Emirates ($6.1 billion), United Kingdom ($4.1 billion) and the United States ($2.7 billion).

    Overall, record high inflows of workers’ remittances during FY21 have been driven by proactive policy measures by the Government and SBP to incentivize the use of formal channels, curtailed cross-border travel in the face of COVID-19 infections, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions.

  • SBP reintroduces incentive scheme for banks for promoting inflow of home remittances

    SBP reintroduces incentive scheme for banks for promoting inflow of home remittances

    KARACHI: State Bank of Pakistan (SBP) on Monday reintroduced incentive scheme for banks to attract home remittances through formal channels.

    The SBP said that in order to further encourage promotion of home remittances through formal channels, the government of Pakistan has approved reintroduction of subject scheme with effective from July 01, 2021 to June 30, 2022 to cover home remittance performance for FY2021-22 compared to that of FY2020-21 as given below:

    1. Home remittances exceeding 5 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): the incentive shall be Rs 0.50 per each incremental USD mobilized over 5 per cent growth.

    2. Home remittances exceeding 10 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): As per (1) above, plus, Rs0.75 per each incremental USD mobilized over 10 per cent growt.

    3. Home remittances exceeding 15 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): As per (b) above, plus, Rs1 per each incremental USD mobilized over 15 per cent growth.