KARACHI: Remittances inflows are likely to back on track with a decent growth from Gulf countries, as various incentives from the government and the stability in kerb market will generate sustainable dividends.
Experts said that the improvement inflows will be likely as the local currency marked a significant comeback against the US dollar in the interbank and open market in the last few weeks (less than Rs. 280).
Besides, the caretaker government has announced an incentive scheme of Rs. 80 billion for encouraging overseas Pakistanis to send remittances to their relatives in their homeland without any charges.
SBP expects increase in home remittances
“A major section of overseas Pakistanis mainly in GCC states believes in supporting the economy of their country through the contribution of sending remittances to Pakistan”, said Tufail Ahmed Khan, CEO Dellsons Associates, United Arab Emirates.
He said the uncertainty among the public is being quashed, which was visible during the participation of overseas Pakistanis in the recently held conference in Dubai Remitlink23: Resilience Remittances.
As the commercial banks become readily available to overseas Pakistanis with their outreach and marketing efforts, the overseas Pakistanis will connect to formal banking channels easily in the future, he added.
He also said that the incentive schemes for expatriates and financial institutions will impact positively on flows of remittances on a long-term basis provided such schemes should be retained.
The banking regulator also announced a performance-based incentive will be granted, by the end of this financial year (FY2023-24), to those financial institutions whose home remittance mobilisation efforts result in growth in their home remittances from the previous year (FY2022-23).
The inflows of remittances improved by 5.5% in September 2023 as compared to the proceeding month to stand at $2.2 billion, according to the data released by the State Bank of Pakistan (SBP); however, it stood 11 percent less than the inflows recorded in the same month yesteryear.
In addition, the government has allowed the freelancers and IT exporters to retain 50 percent of their income in dedicated accounts. Previously, they were allowed to retain 35 percent.
The government incentives to overseas Pakistanis through Sohni Dharti program are commendable but it should be extended with tangible benefits to them, monetary and facilities alike, said Noman Said, an IT expert.
He said mobile Apps will empower overseas Pakistanis to remit their hard-earned money in a single click with trust and convenience. “But a majority of the overseas Pakistanis are not tech-savvy; hence, not only they should also taught the use of Mobile App for remittance transfers but also develop an SMS-based simple application in collaboration with Pakistan banks,” he added.
Experts believe that recent measures from the caretaker government will bode well for inflows of remittances, which will also have a positive effect on its contribution to the current account; however, the battle between Israel and Palestine and different states of Middle East could offset the outcomes.
Copyright Business Recorder, 2023