Under self-reliance policy, the Federal Government and the State Bank of Pakistan on Saturday launched the historic ''Pakistan Remittance Initiative'' (PRI) to boost the flow of remittances sent home by non-resident Pakistanis, and to say ''Goodbye'' to international financial institutions.
"With PRI, we can double our home remittances in the next two-three years, after which we will not require any foreign assistance, and we can easily say ''Goodbye'' to the international financial institutions after five years," said Shaukat Tarin, Minister for Finance, while addressing the launching ceremony of PRI at SBP head office here.
He said that PRI would bring a fundamental change in the country''s remittances regime to boost and facilitate the flow of remittances sent home by non-resident Pakistanis. He said that it is expected that the country''s home remittances would go down in the near future due to the global economic rescission.
However, with the current initiatives remittances would grow further. Tarin said: "I hope with the launch of this initiative, we would be able to double the volume of remittances within the next two to three years." The government has decided to launch three major initiatives for overseas Pakistanis to boost the inflows, he said, and added that these include: new services for home remittance; special economic zones; and new investment schemes.
"We have directed National Investment Trust (NIT) to develop some investment products for the overseas Pakistanis, and the first product would be launched within three months," he said. The Minister said this event would go down in the history as a memorable moment, "whereby we are laying down the foundation of perpetual structure for facilitating the flow of remittances by non-resident Pakistanis".
He said that before the launch of the initiative a detailed assessment was carried out pertaining to prevalent home remittances system in the country. He said one of the important findings of assessment was that there was no owner of the remittances structure in Pakistan. Tarin said that to provide a reliable and immediate contact, ''24 hours 7 days a week call centre'' has been established, which is now operational. All overseas Pakistanis and their families can inquire about the remittance services of banks and lodge their complaints with the ''call centre''.
In addition, he said, a comprehensive website has been established to provide maximum information about the processes involved in the remittance transactions. Further to facilitate the remitters in identifying the places near to them to route remittances through banking channels, a ''locator'' has been placed, he added.
Tarin said that insufficient presence of Pakistan''s banks in overseas jurisdictions and lack of marketing efforts were some of the major impediments to the flow of remittances. In this backdrop, he said, a financial incentive scheme is being launched for overseas entities whereby they will be supported in their marketing efforts.
The scheme is performance-based, and rests on the basic premise of offering financial incentives against mobilisation of additional remittances, he said, and added that such incentives shall start bringing at least $100 million from one particular jurisdiction in one year.
Dr Farooq Sattar, Minister for Overseas Pakistanis, said that "this is the first time in the history that the Government of Pakistan is viewing the overseas Pakistanis from the angle of discharging its responsibility towards their welfare, dignity, and other rights".
He said: "This sea change in the approach is being manifested here today when we are launching Pakistan Remittance Initiative with a view to discharge government responsibility to provide safe, cheap, and efficient remittance delivery channels to overseas Pakistanis to send their funds back home." He added that the real motivation was not the collection of additional foreign exchange, rather to provide for facilitation to the remitters and their families back home.
He said his ministry in collaboration with the Ministry of Labour would assist Pakistan Remittance Initiative to guide all overseas-bound workers about their right of convenient and official ways to remit funds to Pakistan. Similarly, he said, Labour Attaches posted in various overseas missions were being instructed to take direct guidance from Pakistan Remittance Initiative relating to remittance services being offered in their respective residing countries.
In turn, these Attaches shall provide assistance to overseas Pakistanis in effecting their remittances through official channels in an efficient manner, he added. SBP Governor Salim Raza said that despite steady rise in the aggregate remittances to Pakistan in the last few years (almost 100 percent increase in last five years), there still exist considerable untapped potential and room to improve upon the service levels provided to overseas Pakistanis and for their families back home.
He said that with the help of PRI, the banks in Pakistan are being facilitated to change their approach. Instead of becoming a part of any foreign remittance product initiated by overseas entities/global money transfer operators, they are planning to take the initiative of marketing overseas Pakistanis and design their own products while utilising overseas counterparts as ''collection points'', he added.
The SBP Governor said in the initial phase, SBP formed a focused group of five large-size banks, and these banks in consultation with SBP finalised all related arrangements to instantly credit the bank account of the beneficiary once they receive the funds.
Similarly, these banks have completed their arrangements for cash over the counter payments, he said, and added that all these payments would be instant. To address the issue of delay in interbank settlement of remittance transactions, SBP has put in place a mechanism whereby the banks would inform twice a day to each other about the bank accounts to be credited with the remittances received while the funds shall route through RTGS simultaneously with the exchange of information.
He said that SBP is also introducing a mechanism for compensation to remittance beneficiaries for delay by the banks and a comprehensive ''Complaint Handling Mechanism'' has also been put in place. Similarly, SBP, under the auspices of PRI, is encouraging the enhanced role of technology in offering remittance services. The Heads of five major banks, including ABL, MCB Bank, HBL, UBL and NBP, also spoke. The ceremony was attended, among others, by heads of commercial banks, senior officials of the Federal Government and the State Bank.
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