SBP urges banks to improve remittance services

KARACHI: The State Bank of Pakistan (SBP) on Thursday urged banks to explore untapped non-traditional corridors to increase remittance flows to Pakistan. SBP deputy governor Jameel Ahmad said banks should improve their service levels in general and for remittance recipients in particular.

“Introduction of innovative remittance products is required to attract new customers. Enhancement of infrastructure and systems and capacity building of human resources should be on-going tasks to improve efficiency,” Ahmad said, while addressing the audience at the launch of a short docudrama by the National Bank of Pakistan that was targeted towards Pakistani diaspora residing in UAE, Saudi Arabia and other GCC countries. He also said workers’ remittances were a life line for the external account balance. The focused efforts of all stakeholders resulted in an increase in home remittances by 13.2 percent during the first two months of FY18 after a fall of 3.1 percent in FY17.

“There is a need to maintain this momentum and positive growth trajectory in coming months,” he said. “Banks have to undertake effective and aggressive marketing campaigns within country and abroad. I would encourage banks to use all mediums for marketing, including print, electronic and social media.”

NBP recently launched a campaign specifically designed to create awareness about the ills of money transfer through illegal channels to Pakistan.  NBP believes that this mode would be an important medium to educate the masses about the advantages of sending remittances through legal banking channels, such as National Bank of Pakistan’s “Foree Remittances”.

NBP president Saeed Ahmad said the biggest challenge facing the overall remittance business of Pakistan was the use of illegal system of hawala / hundi. This was used by a large number of overseas Pakistanis due to lack of proper information. It affected the country gravely, he added. “If all remittances come via banking channels, our forex reserves will increase resulting in better financial stability and improved standing of Pakistan in the international market,” Saeed Ahmad said.

He spoke about the docudrama launch (Hundi ko lagao kundi---), and said it was not just about increasing the remittance business of the NBP, but the motive was much greater. “The idea is whatever money is coming through legal channels benefits Pakistan as a country. Hundi / hawala is illegal, but mainly popular due to the perceived convenience it offers to the customers.”

The NBP president said banks needed to provide their customers with exceptional efficiency to compete, match, and even surpass the parallel services. The banking industry should enhance the use of digital/branchless services.

People need to be made aware how to use legal channels to transmit and receive money through formal banking channels, he added. Syed Irtiza Kazmi also described NBP's involvement in the remittance business, and said the bank was determined to put greater emphasis on this segment.