SBP launches new scheme 'Pakistan Remittance Initiative' (PRI) to boost remittances

[LahoreEstate]

RECORDER REPORT
KARACHI (October 20 2009): 'Pakistan Remittance Initiative' (PRI) has launched a special marketing expenses reimbursement scheme for overseas entities having specific home remittances-related arrangements with banks in Pakistan to make additional efforts to facilitate remittances flow through formal channels.

According to a circular issued by the State Bank on Monday, under the auspices of PRI, a performance-based scheme has been developed to encourage overseas entities to enhance marketing efforts at origination end. Under this scheme, Pakistan Government will reimburse some percentage of marketing expenses through SBP to the best performance entities, it said.

There will be no reimbursement on marketing expenses for remittances mobilised by an overseas entity up to 100 million dollars, However, SBP will reimburse 0.50 percent on incremental amount to those entities which will remit above 100 million to 400 million dollars from any 'One Particular Jurisdiction'.

Reimbursement on incremental amount on remittances above 400 million dollars to 800 million dollar will be 0.75 percent, one percent on incremental amount on remittance above 800 million dollars to 1,200 million dollars, and one percent will be reimbursed on total remittances to those entities which will send over 1,200 million dollars.

This scheme will be applicable to those entities who offer free remittance services under scheme of reimbursement of TT charges as per SBP FE Circular Letter No 40 dated November 29, 2000 and the above mentioned incentives will be given on country-wise performance of the overseas entities.

Under the scheme, overseas entities will be required to submit a detailed marketing plan to the respective banks with which they have home remittance-related arrangements. This scheme will be applicable to those overseas entities which have in Pakistan arrangements with banks only, and if any overseas entity itself or any of its affiliated concern is found involved in effecting remittances through channels other than banking sector in Pakistan, then such entity will not be entitled for reimbursement under the scheme.

According to the circular, the entities already effecting remittances through banking channels, their target would be 25 percent more than what they channelled during the period from October 1, 2008 to September 30, 2009 to qualify for the above scheme (for the entities which started operations during the above-referred period, their respective targets will be calculated by spreading their existing performance to the whole 12 months). Similarly, only those entities will be eligible for reimbursement under the scheme which have satisfactory compliance status as regards AML/KYC policies to be ensured by the bank entering into agreements. This scheme shall be for one year, initially, and overseas entities will be reimbursed at the end of the scheme year based on actual performance as assessed by SBP, while the starting date for evaluating the performance would be October 1, 2009 and their performance shall be evaluated on the amounts mobilised till September 30, 2010.

The performance of overseas entities in terms of home remittances effected shall be reported by banks to PRI SBP on monthly basis, the circular said, and added that the scheme would run concurrently with any other scheme previously announced by SBP, and is currently in force. It may be mentioned here that the State Bank has an active agenda to continuously analyse global scenario-related to remittances and takes all necessary steps to remove barriers to the flow of remittances, and improve access to banking facilities to overseas Pakistanis and their families.

It has been observed that one of the major impediments to the flow of remittances through formal channels is insufficient marketing effort at the originator end aimed at providing information about the remittance channels and other facilitation to overseas Pakistanis. In order to address this issue the above mentioned new scheme has been introduced.