KARACHI: The government has tasked state-owned National Bank of Pakistan (NBP) with stepping up efforts to attract higher worker remittances into the country’s foreign currency reserves and help increase foreign income to fix the faltering national economy.
For this purpose, the bank is considering options on how to increase remittances, which include extraordinary incentives and opening bank accounts for remittances at airports nationwide within 15 minutes. NBP became the third largest bank in terms of attracting remittances last year from seventh position in the past as remittance inflows are growing at a pace of 45% per year at the bank.
Finance Minister Asad Umar visited the NBP head office last week and discussed options with the newly appointed bank president and CEO Arif Usmani to attract higher worker remittances and improve the country’s balance of payments.
“When I was interviewed (for the post of NBP president), the focus remained on increasing worker remittances,” Usmani told media. He said the bank was working on options to increase the flow of remittances and would share details later.
He, however, added that he had floated an idea in meeting with the finance minister that a lucky draw could be held to award, let’s say, a Rs100,000 prize in order to persuade people to send remittances through banking channels.
The president said banks had to play their role in increasing remittances and take them to the maximum potential level. “Banks can replace illegal Hawala/Hundi operators in increasing remittances only through extraordinary incentives for remittance senders and receivers,” he suggested.
Giving little incentives will not work as Hundi operators offer comparatively better exchange rates (for dollar and dirham) and provide incentives as well. There are reports that Hundi operators offer credit facility to remittance senders as well.
Another NBP official, who spoke on condition of anonymity, said the bank was going to open bank account opening counters at seven airports by mid-March. The move is to facilitate the Pakistani workers going to work overseas.
“The bank accounts, meant for the inflow of remittances, will be opened within 15 minutes at the airports,” he stressed. The initiative is being taken to increase the flow of remittances as part of joint efforts of the Ministry of Finance, Ministry of Overseas Pakistanis, the State Bank of Pakistan (SBP) and NBP.
The official said “an average of around 442,000 Pakistani workers go abroad every year.” Three to four years ago, he said, around 900,000 Pakistani workers used to go abroad per year.
NBP received $2.25 billion in remittances in 2017 and “aims to attract $3 billion this calendar year,” he said.
He recalled that Qatar had agreed to invite 100,000 Pakistani workers this year. Besides, Saudi Arabia has reduced visa fee for Pakistani workers. The initiatives would encourage a higher number of Pakistanis to go abroad for finding job opportunities, he said.
The NBP president said on an average 1,644 Pakistanis workers went abroad every day. “Worker remittances are growing at 45% per annum at the bank,” he said.
Pakistan received $19.35 billion in remittances in the fiscal year ended June 30, 2018 and set a target of $21.2 billion for the current fiscal year.
Remittances have remained a significantly big source of foreign currency for the country that partially helps finance foreign expenditure, import payments and debt repayment.
