State Bank set to of­fer mo­bile re­mit­tance scheme

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The State Bank of Pak­istan is about to launch an in­no­va­tive scheme to en­able for­eign re­mit­tances’ trans­fer on mo­bile phones to im­prove fi­nan­cial in­clu­sion in the coun­try.

The gov­ern­ment and SBP have ap­proved the roll­out for the home re­mit­tances through mo­bile wallet ac­counts scheme, which will be of­fered by all li­censed branch­less bank­ing providers i.e., banks and tele­cos.

Of­fi­cials said the new scheme, which is ex­pected to be an­nounced, will al­low mo­bile wallet (m-Wallet) ac­count hold­ers in Pak­istan to re­ceive re­mit­tances with­out the need of hav­ing con­ven­tional bank ac­counts. “As­sum­ing that if only one per­cent of the ex­ist­ing m-Wallet ac­counts would re­ceive home re­mit­tances with an av­er­age trans­ac­tion size of $400425 per month, this ser­vice could fetch around $1 billion in the first year,” the of­fi­cial said.

In Pak­istan, al­most 46 mil­lion peo­ple have bank ac­counts, but over 140 mil­lion uses mo­bile phones, in­di­cat­ing a grow­ing de­mand for mo­bile money trans­fer ser­vices that ex­perts say is one of the keys to chan­nelis­ing re­mit­tance flows through le­gal sources. Not all mo­bile phone sub­scribers have mo­bile wal­lets, but there has been a dou­ble digit growth in branch­less bank­ing ac­counts, up 17 per­cent to 13.16 mil­lion as of June-end over the pre­vi­ous quar­ter.

Cur­rently, banks pro­vide fi­nan­cial mo­bile ap­pli­ca­tions but cus­tomers can’t open and man­age their ac­counts via the mo­bile phone un­less they have bank­ing ac­counts. “There­fore, the new scheme is ex­pected to help drive fi­nan­cial in­clu­sion through en­hanced us­age in m-wal­lets,” the of­fi­cial said.

“More­over, it could en­cour­age re­mit­tance flows through le­gal sources.” The new scheme will pro­vide branch­less bank­ing ac­count fa­cil­i­ta­tion to the un­banked masses/ re­mit­tance ben­e­fi­cia­ries and pro­mote fi­nan­cial in­clu­sion in the coun­try, ac­cord­ing to the of­fi­cials.

“Un­der the ser­vice, new or ex­ist­ing ac­counts will be tagged as home re­mit­tance ac­counts,” the of­fi­cial said. “Th­ese ac­counts will fa­cil­i­tate de­posit, with­drawal and trans­fer of funds ac­cord­ing to pre­scribed lim­its.” Money sent home by ex­pa­tri­ates to fam­i­lies in Pak­istan fell 3.08 per­cent to $19.303 billion dur­ing the last fis­cal year. In the first five months of the cur­rent fis­cal year of 2017/18, re­mit­tances rose slightly 1.28 per­cent year-on-year to $8.021 billion.

For­eign re­mit­tance to Pak­istan saw a sus­tained growth and in­creased from $6.5 billion in fis­cal year FY08 to $19.9 billion in FY17.

Pak­istan has achieved the high­est com­pound an­nual av­er­age growth of 16 per­cent in re­mit­tances dur­ing 20092016 amongst top 20 re­mit­tance re­cip­i­ent coun­tries, ac­cord­ing to the World Bank’s fig­ures.

Of­fi­cials said anti-money laun­der­ing reg­u­la­tions would be ap­pli­ca­ble to check ab­nor­mal/ir­reg­u­lar trans­ac­tions un­der the new scheme. M-Wallet hold­ers may earn mo­bile top­ups against their re­mit­tances re­ceived from abroad to make it more at­trac­tive. Banks will re­mu­ner­ate (on daily ba­sis) th­ese ac­counts to en­cour­age main­tain­ing bal­ance in th­ese ac­counts. The cen­tral bank launched ‘Asaan Re­mit­tance Ac­count’ re­cently in an at­tempt to en­cour­age re­mit­tance re­ceipts through proper ac­counts in­stead of tra­di­tional cash over the counter trans­ac­tions.

SBP, in col­lab­o­ra­tion with Pak­istan Re­mit­tance Ini­tia­tive (PRI), is work­ing to pro­mote con­ve­nient, but also se­cure re­mit­tance flow in Pak­istan. The PRI in­tro­duced a scheme for re­im­burse­ment of the cost of send­ing re­mit­tances.

SBP has also done a lot to mod­ernise pay­ment sys­tem in­fra­struc­ture to make de­liv­ery of re­mit­tances more ef­fi­cient and se­cure. At present, the gov­ern­ment through the State Bank, un­der PRI, re­im­burses 20 Saudi Riyal per trans­ac­tion to the banks in Pak­istan. The min­i­mum size of the trans­ac­tion should be $200 or above and the re­mit­ter and the ben­e­fi­ciary should not be charged any re­mit­tance fee. The PRI has en­hanced the do­mes­tic and global outreach to fa­cil­i­tate re­mit­ters and re­cip­i­ents of re­mit­tances.

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