According to the UN Department of Economic and Social Affairs, Pakistan has the sixth largest diaspora in the world. Pakistan received a record of $21.84 billion remittances in 2019-20 as overseas Pakistanis, mostly based in Gulf countries, continued to send money back home. Receiving all remittances through banking channels, like those of JS Bank, can help change the fate of the country. The State Bank of Pakistan (SBP) has partnered with banks in this regard.
Pakistan gets 93pc of its remittances from only 10 countries, including Saudi Arabia, United Arab Emirates, United States and the United Kingdom.
Remittances, after exports, are the biggest source of foreign exchange inflow to Pakistan. It helps keeps Pakistan’s economy afloat by partially plugging in the ever-increasing trade deficit.
New initiative by SBP to discourage use of Hawala/Hundi
Launched to facilitate secure, cheap and rapid remittances by overseas Pakistanis, the Pakistan Remittance Initiative (PRI) is a joint initiative of the State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance.
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In past years, under the PRI program, many new initiatives have been undertaken. Real-Time Gross Settlement (RTGS) and Cash over Counter (CoC) were introduced in 2009 while Inter Bank Fund Transfer (IBFT) facility was introduced in 2012. It also facilitates the collection of remittances through Pakistan Post office via National Bank’s online portal.
As recommended by SBP, all the above services are available at leading banks, including JS bank.
In the past, the high cost of remittance and difficult procedures acted as major obstacles and caused senders to either refrain from sending money back home or use informal channels such as Hundi and Hawala for the purpose.
Pakistan's Prime Minister @ImranKhanPTI launches Pakistan Remittance Initiative which would allow beneficiaries to collect their payments free of charge from post office locations using the National Bank of Pakistan portal. #Remmittances #Pakistan #EmergingPakistan pic.twitter.com/vLRrEKwz0B
— Emerging Pakistan (@dev9_) December 25, 2019
It is important to document this cash inflow, as it will help boost the figures at the official level. These inflows will then be able to alleviate the perennial issue of Pakistan’s external account deficit. This formal remittance of money will also help expand the tax net as the tax bureau will be better able to track the money trail and source of income. All these efforts will also lead to higher tax collection.
Additionally, the use of informal procedure helps create and embolden channels that are used for money laundering and terror financing. Such measures will definitely improve Pakistan’s position vis-a-vis the greylisting by FATF.
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Therefore, a sizable amount of remittances transferred to Pakistan was through informal channels. By reducing these constraints, the PRI initiative is working with Banks to increase the share of formal remittance receipts.
JS Bank makes receiving remittances easy
By partnering with leading financial institutions such as JS Bank, the SBP-led PRI initiative helps expatriates in more than 200 countries send money home to their loved ones in a convenient and cost-effective manner.
Remittances can be transferred through registered PRI service providers across the globe and the remitted money can be claimed from JS Bank’s nationwide branch network at great exchange rates, backed by a secure and swift infrastructure. Through this initiative, JS Bank will also support SBP’s drive to discourage illegal money transfers which cause a loss to the national exchequer.
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Mr Basir Shamsie, President and CEO JS Bank stated, “Our objective is to support the millions of Pakistanis abroad who need to get money to their family and friends in Pakistan in a simple, easy and convenient manner. The PRI initiative has made life easy and we need to ensure that people know this and get their money in a legal way.”
JS Bank: helping the nation during the pandemic
JS Bank is also a responsible corporate citizen and has been at the forefront of relief activities during the current pandemic. Playing its role in facilitating the nation and its institutions to fight the coronavirus pandemic, JS Bank has introduced financing of up to Rs 200 million to hospitals and medical centres for the purchase of equipment to detect, contain and treat patients infected by COVID-19.
Under this State Bank-designed scheme, all medical centres registered with federal or provincial health governing bodies, engaged in the control and eradication of COVID-19, will be eligible to avail the credit line at a minimal mark-up rate of only 3% per annum for a duration of five years.
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This plan enables these health facilities to bolster their operational mechanisms through the purchase of additional equipment and relevant tools for the purpose. Hospitals can avail of this facility until September 2020.
JS Bank has also introduced financing of up to Rs 200 million to hospitals and medical centres for the purchase of equipment to detect, contain and treat patients infected by COVID-19.
Committed towards its role as a catalyst towards the progress and prosperity of Pakistan, the Bank hopes to continue this journey of success by offering a wide range of value-added financial offerings and services.