Exchange companies urge SBP to abolish Pakistan Remittance Initiative

KARACHI: Exchange companies on Monday demanded the central bank to abolish the Pakistan Remittance Initiative (PRI) and provide exchange rebate to the remitter directly to boost remittance flows.

The State Bank of Pakistan (SBP) called an urgent meeting with the officials of the Exchange Companies Association of Pakistan (ECAP) to discuss the issues related to dollar price in the open market and workers’ remittances.

The SBP appreciated the dip in the price of dollar at the meeting. “The executive director at the SBP Syed Irfan Ali agreed with the suggestion of Zafar Paracha, a secretary general of ECAP and promised that one rupee will be paid per US dollar to the foreign remitter directly,” the statement said.

The association said PRI should be abolished as the banks and foreign institution were benefitting through this initiative on account of commission/rebate. “There is no FBR (Federal Board of Revenue) rate on property. Property should be registered at market value. This assumes no one will register a property for less than 50 percent of its market value,” it said.

The exchange operators said there was a need to establish a mechanism wherein the importer should declare their import on market rate instead of under-invoicing. It would reduce the illegal business, under-invoicing, hundi/hawala and other ill activities, and would also help increase revenue, it said.

Among other demands, ECAP said the government should ensure giving up to 50 percent to that security official who confiscated the smuggled amount at the airport/seaport. The ECAP also demanded that the exchange companies should be allowed to provide remittance/currency facilities to trade-related business. It said the government and the central bank should enforce the ban on the smuggling of US dollars to Dubai via Pakistan-Afghanistan-Dubai, and bound the exchange companies to accept only currencies which have permission from the origin countries. It suggested that the embargo imposed by the Dubai government should not be taken back.