KARACHI: Pakistan has received all-time high over $23 billion home remittances inflows during the last fiscal year (FY20).
According to State Bank of Pakistan (SBP), on a cumulative basis, workers' remittances surged to a historic high level of $23.121 billion during FY20 compared to $21.739 billion during FY19, witnessing a growth of some 6.5 percent or $1.3 billion.
Similarly, workers' remittances sent by overseas Pakistanis also posted a significant increase of 51 percent during the last month (June 2020) of FY20. Workers' remittances reached record high level of $2.466 billion in June 2020 compared with $1.636 billion in June 2019.
Inflow of workers' remittances registered an increase of a 7.8 percent during the Covid-19 pandemic period of March-June 2020 compared with the corresponding period of 2019.
SBP said that the significant increase in remittances during June 2020 can be attributed to a number of factors. Since many of the countries eased lockdown in June, overseas Pakistanis were able to transfer accumulative funds, which they were unable to send earlier. Further, it is also believed that they sent remittances to support extended families and friends due to COVID-19.
In addition to these, efforts by the government of Pakistan and SBP also played their role in the increased inflow of workers' remittances during FY20 in general and Covid-19 period, March till June 2020, in particular.
Supportive government policies in terms of extension of Reimbursement of TT Charges Scheme (Free Send Remittance Scheme) to small remitters by reducing threshold from USD 200 to USD 100, as well as, broadening the scope of incentive scheme for marketing scheme for financial institutions increased the incentives for sending remittances through regular channels.
Further, on-boarding of a large number of technology based money transfer companies by SBP and PRI also helped absorb the shock of lockdowns. Financial institutions were motivated to use effective marketing campaigns with particular focus on digital channels for sending and receiving remittances to promote the use of legal channels.
With some 24 percent share, Saudi Arabia is the major contributor in the inflows of home remittances. Overseas Pakistanis from Saudi Arabia sent some $5.432 billion remittances during the last fiscal year compared to $5 billion in FY19, depicting an increase of 8.6 percent.
Pakistan also received workers' remittances amounting to $4.1 billion, up 26 percent, from US and with slight increase of 1.56 percent to $3.4 billion from UK during last fiscal year.
During June 2020, larger amounts of workers' remittances are received from Saudi Arabia amounting to $ 619.4 million, USA $ 452 million, UAE $ 431.7 million and UK $ 401 million, recording an increase of 42.0 percent, 7.1 percent, 33.5 percent and 40.8 percent, respectively as compared to May 2020.
Copyright Business Recorder, 2020