SBP unveils incentive scheme for exchange companies

KARACHI: The State Bank of Pakistan (SBP) has introduced a new incentive scheme for the exchange companies with the approval of the federal government.

Under the scheme, the exchange companies would be required to surrender 100 per cent of the home remittances mobilised in the interbank market and in return, they will receive Re1 against each USD surrendered, the SBP said in a statement on Friday.

The exchange companies bring home remittances with the help of money transfer operators, in their accounts maintained with the banks in the country. Earlier, the exchange companies were required to surrender a minimum 15 per cent of the home remittances in the interbank market.

To implement the scheme, the State Bank has now amended its regulation governing disbursement of inward remittances by the exchange companies. Now the exchange companies would surrender 100 per cent of the foreign currency received by them on account of inward home remittances, equivalent to dollars, in the interbank market on the same day.

Since the exchange companies mobilise a significant amount of home remittances, this scheme will help improve the foreign exchange liquidity in the interbank market and the incentive provided is expected to encourage all the exchange companies to bring more and more home remittances by reaching out to a wider set of remitters and their beneficiaries in Pakistan.