Breathing life into the economy
Pakistan Remittance Initiative eases remittances flow and promotes investment opportunities for non-resident expats
With workers’ remittances playing a big role in sustaining the economy of Pakistan, it became necessary to establish a framework to regulate the phenomenon. In response, the State Bank of Pakistan, the Ministry of Overseas Pakistanis and the Ministry of Finance joined hands to set up the Pakistan Remittance Initiative (PRI) in August 2009. The joint initiative focuses on two main objectives, i.e., to facilitate and support faster, cheaper, more convenient and efficient flow of remittances through formal channels, and create investment opportunities in Pakistan for overseas Pakistanis.
The PRI adopted a multi-faceted strategic approach that included:
Enhanced outreach: Focused on bilateral arrangements to create a separate efficient remittance payment highway based on developing formal links with financial institutions abroad (from less than 20 to over 400).
Enhanced distribution channels: Expanded services offered by post offices and microfinance banks, and identification of high remittance-receiving areas (resulting in 10,000 additional physical locations in Pakistan for receiving remittances). Improved payment system infrastructure: Instrumental for systems such as cash over-the-counter and inter-bank settlements.
Innovative remittance products: PRI provides advisory services to banks for introducing innovative remittance products such as cards and Internet-based remittances.
Prize incentives: The Government of Pakistan announced the reimbursement of marketing expenses to banks for attracting remittances. Pre-departure briefings: Remittance
briefing sessions at Protectorate offices offered for capturing potential overseas Pakistanis and for opening bank accounts before leaving the country.
The PRI has successfully curbed unofficial channels of transactions, namely the hundi or hawala system, adding further security and improved rural payout networks with reliable modes of money ransfer. Its actions also had a dramatic impact in the increase of formal remittance flows from countries across the globe to Pakistan.
The joint initiative focuses on two main objectives, i.e., to facilitate and support faster, cheaper, more convenient and efficient flow of remittances through formal channels, and create investment opportunities in Pakistan for overseas Pakistanis.