Pakistan is a country that refuses to fail despite of all the efforts of those who can’t see it perform, albeit with hiccups. In last few years, Transparency International Pakistan has become a nuisance in connivance with Jang Group which has been making all out efforts to fail sitting governments. The usual way of causing damage is to make a story, publish it in The News and Jang, fan it as much as possible and then let the Supreme Court take suo moto. While a case doesn’t reach its conclusion, what happens is that work on the targeted side stops!
Remittances by overseas Pakistanis have grown at a very fast pace. There are many reasons for that. Some of them are:
- Post 9-11, a lot of money came back home
- Between 1998 and 2002, the rate difference between the official rate of exchange and the one offered by money changers was huge due to which people would send money through hawala and hundi. After 2002, the rate difference became minimal.
- SBP offered banks not to charge any money on remittance being sent to Pakistan. If they didn’t charge a fees, then SBP would pay them a fee. Pakistan in essence is one of the only countries where sending remittance through official channels is free. Because of the incentive to make money from SBP as well as earn goodie points, banks try offering the best rate on remittance
- Hundi and Hawala transfers have come under a lot of scrutiny. Central Banks in a number of countries are discouraging the practice, even though it is still sizeable. Moreover, because of anti-money laundering and know your customer requirements, Hundi and Hawala is no more that easy.
The Pakistan Remittance Initiative (PRI) is not just economically viable for all parties, but also very quick. Sending a remittance to a bank account in Pakistan takes one day. For example, I send my remittance from my bank in a Gulf country. My bank deals with Habib Bank Limited which receives the remittance which is supposed to go to an account with Soneri Bank. HBL transfers my money through the PRI to an account with Soneri. This process takes less than 24 hours meaning next working day, money is in the account. Previously, it would take 3-5 days to receive the funds in an account.
So an economically viable and an efficient mechanism is being termed as a scam? Ask Transparency International Pakistan that how are you calling it a scam? All you’ve done is calculate the amount of money received, divide it by USD 100 and convert it with Saudi Riyal 25 per transaction? This is mindlessness on the part of Adil Gilani and Jang Group which is aimed at only stalling the successful PRI.
It serves the purpose of Adil Gilani and Jang Group which have been antagonists against the sitting government. In this fiscal year, Pakistan will receive USD 12.5 billion in remittances, good enough to keep the current account positive.
Adil Gilani and Jang Group, we can see your malice!
See report in The News that appeared on February 28, 2012.
Banks devour Rs400 bn sent by overseas Pakistanis
ISLAMABAD: In what could turn out to be one of the biggest scandals in the banking sector of Pakistan, the State Bank of Pakistan has been asked to probe the misuse of Pakistan Remittance Initiative (PRI). According to sources, on this count approximately Rs400 billion loss has been caused to the national exchequer with the banks dividing each remittance into packages to receive maximum incentives.
Transparency International Pakistan has spotted the scandal after many complaints and has urged the State Bank Governor Yasin Anwer to inquire into the issue because when the policy to give 6.67% of the remittance was announced as an incentive to the bank routing the remittance in 2001, Pakistan has received $69 billion. It is feared that $4.6 billion dollars have been earned in the name of Pakistan Remittance Initiative. In a letter written to the SBP, Transparency International has explained that an incentive of 6.67% (25 Saudi Riyals) over every remittance was announced in a policy devised in 2000 and minimum remittance amount was fixed at $100. The banks have been breaking one remittance into many packages to claim the maximum incentives and the amount has been estimated at Rs400 billion, the TIP said. However, independent observers say that the possibility of alleged corruption might lie between Rs80 billion to Rs100 billion.
The letter says: “TIP has received a very serious complaint on the misuse of Pakistan Remittance Initiative and estimated loss to exchequer of 6.67% by alleged collusive practice of banks and SBP. The complainant has made following allegations:
“1. According to F.E. Circular Letter No. 40 dated November 29, 2000, the following scheme was announced:
“Keeping in view the difficulties experienced by the banks and to provide more incentives to the banks to accelerate home remittances, it has been decided that henceforth:
i) The minimum amount of remittance of US$200/- to qualify for reimbursement of charges is reduced to US$100/- or equivalent to other currency (per telex/swift charges).
ii) The reimbursement rate of SR20 is increased to SR25 for each remittance.
“2. From July 2001 to Jan 2012, the home remittances received are estimated to be about US$69 billion. The complainant has alleged that 6.67% is dished out to banks with connivance of SBP; each remittance received is broken into packages of $100 each without the knowledge of the remitter, and SR25 on each remittance is being shared between the colluding officers of banks and SBP.
“3. Total amount dished out of the exchequer is about US$4.6 billion in the last 11 years. This is about Rs400 billion.
“4. The complainant has also stated that the incentive scheme from the beginning is reported to be wrong, and the 6.67% benefit should have been passed on to the remitter. “Transparency International Pakistan requests the governor to kindly examine the allegations made by the complainant, and found correct, take immediate remedial measures to stop such illegal practices and recover the illegal benefits availed by them and deposit them in the national exchequer.
“TIP also requests the governor to get the F.E. Circular Letter No. 40 immediately amended, for the benefit to be passed on to the remitter. This incentive to the remitters, if approved, will surely increase the current level of home remittances manifold within a couple of years.”