The State Bank of Pakistan (SBP) announced the use of cash slabs as part of incentive packages to boost remittances and urge domestic financial institutions (FIs) to increase marketing efforts to mobilise home remittances through official channels.
SBP With Use of Cash Slabs
The Government of Pakistan has authorised adjustments to the incentive system to reward financial institutions for their efforts in increasing home remittances.
Financial institutions will be rewarded by the conclusion of the current fiscal year (FY2023-24) if their home remittance mobilisation efforts result in growth compared to the preceding year (FY2022-23).
The monetary incentives will be decided in three slabs based on the FI’s incremental home remittances:
- Up to a 5% increase: Rs 1 per USD.
- Five to ten percent increase: Rs 2 per USD.
- An increase of more than 10%: Rs 3 per USD
This incentive plan is set to become permanent in FY2023-24, with the goal of continuing to encourage FIs to channel more home remittances through formal channels.
Telegraphic Transfer Expenses
In addition, the SBP announced that qualified home remittance transactions will be reimbursed for Telegraphic Transfer (TT) expenses.
For qualified home remittance transactions, the reimbursement rate for TT charges will be SAR 30.
This rise in the TT charges rate will take effect for home remittance transactions received in Pakistan thirty days following the circular’s publication.
These activities are part of the government’s attempts to promote the use of formal remittance channels, which can help the country’s economic stability and financial inclusion while decreasing reliance on informal remittance channels.
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