Banks May Remit $800m to Money Transfer Operators After PRI Subsidy Ends

Pakistani banks may spend around $800 million on payments to overseas money transfer operators to support remittance inflows following the discontinuation of government subsidies under the Pakistan Remittance Initiative (PRI), a Senate committee was told.

 

Senate Standing Committee on Finance Chairman Saleem Mandviwalla raised the issue during a meeting, although State Bank of Pakistan Deputy Governor Dr Inayat Hussain denied that any such plan was currently under consideration.

 

The committee was informed that the government had previously provided around Rs120 billion in subsidies to facilitate remittances, but fiscal constraints have prevented the subsidy from continuing under the current budget. Banks have therefore decided to absorb the related costs from their own resources.

 

Around $257 million was reportedly paid last year to facilitate approximately $41.6 billion in remittance inflows.

 

The committee also reviewed concerns over counterfeit currency and the redesign of Pakistan’s banknotes. SBP officials said new Rs1,000 and Rs5,000 notes are being developed with enhanced security features, while the Rs10 note is expected to be phased out. The new Rs5,000 note is expected to cost around Rs14 to produce and could take about a year to enter circulation.

 

Lawmakers also questioned delays in the currency redesign process and called for greater transparency in the appointment of consultants.

 

Meanwhile, the SBP said stronger economic conditions and enforcement measures had helped keep demand for dollars low, supporting exchange-rate stability.

 

The committee plans to invite selected banks to discuss their performance and contribution to Pakistan’s remittance sector.