KSA remains largest source of remittances to Pakistan — SBP

State Bank of Pakistan. (Photo courtesy: SPB/File)

• Pakistan received $2.97 bn from KSA during the seven months of current fiscal year, central bank data shows
• Incentive to trade in currencies, action against illegal money houses led to hike in foreign remittances

KARACHI: Pakistan recorded a 12.2 percent increase in the inflow of remittances in the first seven months of the current fiscal year, according to official data released by the State Bank of Pakistan (SBP).
Saudi Arabia continues to be the largest source of remittances, with Pakistan receiving $403.92 million in the month of January as compared to $383.91 million in January last year. Pakistan received $2.97 billion from Saudi Arabia during the seven months of current fiscal year, according to the SBP report released on Monday.
The hike in remittance from overseas Pakistanis is also being attributed to government’s measures to discourage the exchange of money through illegal channels and incentivize trade of currencies.
“The incentives given to overseas Pakistanis to attract remittances through officials channels and the attractive exchange rates are also playing positive role,” Muzzamil Aslam, a senior economist, said. 
The state bank on Monday said, “Overseas Pakistani workers remitted $12774.02 million in the first seven months of FY19 as compared with $11383.47 million received during the same period in the preceding year.”
According to the official figures, the amount received from other countries like the UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $352.12 million, $272.32 million, $ 295.13 million, $166.50 million and $42.89 million respectively compared with the inflow of $351.58 million, $223.94 million, $235.10 million, $186.33 million and $56.4 million respectively in January 2018.
Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during January 2019 amounted to $210.36 million together as against $201.46 million received in January 2018.
In October last year, Prime Minister Imran Khan had approved a scheme which could increase the amount from Rs163 to Rs 200 for the use of a mobile wallet on each transaction of $1 remittance as airtime.
The government had also announced an incentive of Rs1 against each $1 incremental remittance transaction to foreign exchange companies and banks that brought in 15 percent more remittances than those recorded in the previous financial year.
“This incentive and the actions against the Hundi or Hawala (an alternative remittance channel that exists outside of banking and other official channels) has resulted in the inflow of remittances through official channels,” Malik Bostan, President of Forex Association of Pakistan, told Arab News. 
“The government’s action against illegal money traders has restricted the movement of currency in a large quantity. Authorities seize the amount if it is moved without proper documentation. Recently, around Rs180 million was confiscated by the concerned authorities,” Bostan said.
Pakistan has set the remittance target of $21.2 billion for the current fiscal year. However, the central bank’s projections show that the inflow would be between $20.5 billion and $21.5 billion.
Pakistan had received $19.62 billion remittances from overseas Pakistan during the outgoing fiscal year FY18 which is 1.4 percent higher than those recorded in the previous fiscal year but short of the target of $20.7 billion set for the year.