Use of Illegal Channel to Send Remittances on the Rise in Pakistan – Research Snipers

Use of Illegal Channel to Send Remittances on the Rise in Pakistan

pakistan

Pakistan are increasingly using informal channels to send remittances to the country as per the State Bank governor.

Reza Baqir said  “We are seeing that the use of formal channels for sending money [by expatriates] is not growing as much as the use of informal channels.”

Adding, “The reasons for this may be the comparatively higher cost of sending money [through formal channels] and the questions asked [by banks] from the senders.”

The State Bank chief told the federal cabinet that the overseas Pakistanis are hesitant to provide additional info about themselves to banks. They fear that their data that will be shared with the  Federal Bureau of Revenue (FBR) in line with the Financial Action Task Force’s {FATF) recommendations can be ‘misused’.

It has been estimated by the bankers and experts that the receipt of remittances via illegal channels stood at almost $8 billion a year.

In the first five months of the fiscal year from July to November, Pakistan received $9.3 billion via legal channels.

In 2019, the government launched a crackdown on the operators of the illegal hundi and hawala money transfer systems.

SBP governor urged banks to lend more money to the private sector to boost economic growth.

Also read: Govt to Reward Overseas Pakistanis for Sending Remittances Using Proper Banking Channels

He said,  “Banks should lend more as they have become risk averters following the incorporation of amendments to the money laundering and terror financing rules.”

Adding, “We have made significant improvement in FATF [compliance…banks are with us [in the FATF journey].

The country has a bright future as the newly implemented policies are helping in addressing imbalances in the economy. The outlook for the real economy is improving in our [SBP] view.”

Leave a Reply

Your email address will not be published. Required fields are marked *