Remittances Incentive Scheme to Continue as Govt Aims to Boost Foreign Inflows
In a significant economic decision, the federal government of Pakistan has announced its plan to continue the Remittances Incentive Scheme, a policy aimed at encouraging overseas Pakistanis to send money home through legal and formal banking channels. This decision comes at a time when Pakistan is focusing on strengthening its foreign exchange reserves, reducing dependency on external borrowing, and supporting the national economy through sustainable remittance flows.
The Remittances Incentive Scheme was originally introduced to reward individuals and financial institutions that facilitate legal remittance transfers. With its continuation, the government is signaling a clear message to overseas Pakistanis: their contributions to the country’s financial stability are both valued and encouraged.
What Is the Remittances Incentive Scheme?
The Remittances Incentive Scheme is a government initiative designed to increase remittance inflows by offering incentives such as cash rewards, reduced fees, and priority services to overseas workers and the banks or exchange companies they use. Launched to counter informal money transfer systems like Hundi and Hawala, the scheme has been successful in improving transparency and growing formal remittance volumes.
Under this scheme:
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Overseas Pakistanis who send money through official channels are eligible for reward points or benefits.
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Banks and Money Transfer Operators (MTOs) receive performance-based incentives for achieving remittance targets.
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Users can access premium services, including faster processing, mobile wallet access, and discounted transaction fees.
The continuation of the Remittances Incentive Scheme reflects its proven success in enhancing remittance figures and supporting Pakistan’s external account.
Why the Continuation Matters
Remittances are one of the largest sources of foreign exchange for Pakistan. In FY2024, remittances exceeded $30 billion, providing vital support to the country’s balance of payments. At a time when Pakistan faces fiscal challenges, maintaining and growing remittance inflows is essential for economic stability.
By continuing the Remittances Incentive Scheme, the government is taking proactive steps to:
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Encourage legal remittance transfers
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Curb illegal financial channels
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Enhance trust in banking systems
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Ensure consistent dollar inflow into the economy
Finance Ministry officials confirmed that the scheme will remain in place with expanded reach, better transparency, and improved rewards. This move is seen as a part of a broader economic roadmap to revive investor and market confidence.
Key Features of the Remittances Incentive Scheme
The enhanced version of the Remittances Incentive Scheme will include several updated features designed to make the program more attractive and efficient. These include:
1. Increased Reward Points
Overseas Pakistanis will earn higher reward points for every legal remittance sent to Pakistan, redeemable for cash, airline discounts, mobile recharge, and other benefits.
2. Zero Fee Transfers
Selected remittance service providers will offer fee-free transfers for certain corridors, especially from the Middle East, Europe, and North America.
3. Faster Processing
Funds sent through the scheme will be processed within 24 hours, ensuring quick access to money for families in Pakistan.
4. Digital Integration
The scheme will be integrated with popular digital wallets and mobile banking apps, including Raast, JazzCash, Easypaisa, and UPaisa, allowing for seamless fund transfers.
5. Bank Incentives
Banks that meet or exceed remittance targets will be rewarded with cash bonuses and regulatory relaxations.
With these improvements, the Remittances Incentive Scheme aims to attract more users and reduce reliance on informal remittance channels.
Government Statements on the Policy
The announcement was made during a recent briefing at the Ministry of Finance. Speaking to the media, Finance Minister Muhammad Aurangzeb emphasized the importance of remittances in Pakistan’s economic development.
“Overseas Pakistanis are the backbone of our economy. Through the continuation and improvement of the Remittances Incentive Scheme, we aim to build a stronger, legal, and rewarding remittance system that benefits both senders and recipients,” he said.
The State Bank of Pakistan (SBP) also confirmed its full support for the scheme, adding that enhanced monitoring tools and security protocols would be implemented to ensure its transparency.
Remittance Trends and the Role of Overseas Pakistanis
In recent years, remittances have played a key role in stabilizing Pakistan’s foreign reserves. Countries such as Saudi Arabia, UAE, UK, USA, and Qatar are among the top sources of remittances. In FY2024 alone:
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$7.4 billion came from Saudi Arabia
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$6.2 billion from the UAE
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$4.3 billion from the UK
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$3.1 billion from the USA
These numbers show the impact that overseas workers have on Pakistan’s economy. By continuing the Remittances Incentive Scheme, the government aims to further empower this community while contributing to national growth.
Combating Informal Channels
One of the primary goals of the Remittances Incentive Scheme is to curb the use of informal money transfer methods like Hundi and Hawala. These channels are:
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Unregulated
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Prone to misuse for illegal transactions
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Harmful to the country’s foreign reserves
With incentives in place, the government hopes to convert informal remitters into legal remittance senders by making formal channels more appealing, accessible, and beneficial.
How Overseas Pakistanis Can Benefit
To benefit from the Remittances Incentive Scheme, overseas Pakistanis should:
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Send money only through SBP-approved banks or exchange companies
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Register for the scheme on official portals or mobile apps
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Link transactions to their CNIC or mobile number for verification
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Track reward points and benefits via digital dashboards
Users can also check the list of partner banks and incentive programs on the State Bank of Pakistan’s official website or the Pakistan Remittance Initiative (PRI) portal.
Positive Market Response
The continuation of the Remittances Incentive Scheme has been well received by financial experts, banks, and remittance service providers.
HBL, UBL, Meezan Bank, and Western Union are among the many financial institutions expected to participate actively in the upgraded scheme. Their cooperation will play a crucial role in expanding reach and boosting overall remittance numbers.
The stock market also responded positively to the news, with shares of major banks and fintech companies experiencing a slight uptick following the announcement.
Challenges and the Road Ahead
While the Remittances Incentive Scheme has been successful, challenges still remain:
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Limited awareness among overseas workers in rural areas
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Technical glitches in digital platforms
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Resistance from informal remittance agents
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Security concerns over personal data
To address these, the government plans to launch a nationwide awareness campaign, strengthen data privacy policies, and provide 24/7 support through helplines and embassy services.
Moreover, future upgrades may include:
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Loyalty programs for frequent remitters
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Government bonds or savings schemes tied to remittance volumes
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Tax benefits for remittance senders
These additions will enhance the effectiveness and appeal of the Remittances Incentive Scheme further.
Final Thoughts
The decision to continue the Remittances Incentive Scheme marks a strategic and positive step towards improving Pakistan’s economic resilience. As overseas Pakistanis continue to support their families and contribute to the national economy, the government’s efforts to reward and recognize their role are both timely and necessary.
By formalizing remittance flows, reducing reliance on illegal channels, and offering real benefits to users, the scheme is set to transform Pakistan’s financial landscape. It’s a win-win move for senders, recipients, and the nation as a whole.
As the policy continues to evolve, its success will depend on active participation, transparency, and robust implementation across all levels.
