KARACHI: Chairperson of the Exchange Companies Association of Pakistan Malik Muhammad Bostan said the government could have reformed the Pakistan Remittance Initiative (PRI) subsidy instead of abolishing it, reducing the fiscal burden while preserving incentives for overseas Pakistanis to send remittances through formal channels.
In a video message on Wednesday, Bostan said that the State Bank of Pakistan (SBP), under pressure from the International Monetary Fund (IMF), has decided to discontinue the PRI scheme, which was launched in 2009. He said the scheme played a pivotal role in increasing remittances through formal channels from $9 billion to nearly $41 billion annually.
However, Bostan argued that instead of abolishing the programme, the government could have introduced reforms to the subsidy and fee structure, thereby reducing the fiscal burden while preserving incentives for overseas Pakistanis to remit money through legal channels.
He said that the ongoing crackdown on hawala/hundi and illegal currency trading has significantly strengthened the Pakistani rupee, adding that if the campaign continues with the same intensity, the US dollar could fall below Rs250. He noted that the dollar, which had once climbed to Rs340 in the open market, has now declined to around Rs279, attributing the rupee’s stability to decisive action against illegal foreign exchange networks.
Bostan further said that the number of overseas Pakistanis has increased from around five million in 2009 to nearly 15 million today, with an estimated 500,000 to 700,000 Pakistanis leaving the country each year for overseas employment. This trend, he noted, has been contributing an additional $2 billion in annual remittances.
He added that Pakistan’s foreign exchange reserves have risen largely due to the steady growth in remittances through formal channels. Despite the discontinuation of the PRI scheme, he expressed confidence that the SBP and exchange companies will continue to provide low-cost and convenient remittance services to overseas Pakistanis to ensure that inflows through legal channels remain uninterrupted.
