Money firms allowed to act as sub-agents of banks for remittance

KARACHI: The State Bank of Pakistan (SBP) has permitted exchange firms to act as banks’ sub-agents for disbursing home remittances, a circular said on Thursday.

“In order to facilitate the disbursement of home remittances, Exchange Companies (ECs) are allowed to enter into agreements with the Authorised Dealers (banks) to act as their sub-agents for disbursement of home remittances in PKR to beneficiaries, received by Authorised Dealers through their international tie-ups,” the State Bank

of Pakistan said in a circular.

Zafar Paracha, the secretary general of the

Exchange Companies Association of Pakistan

said the State Bank of Pakistan has made the decision to boost remittance inflows via exchange companies.

“The exchange companies had been asking for permission for signing agreements with the international money transfer companies to facilitate the remittances as the commercial banks have accorded with 100-150 money transfer providers. However, the country’s exchange firms have such agreements with only 4 global money transfer companies,” Paracha added.

However, instead of allowing agreements with more international money transfer providers, the State Bank of Pakistan has made this arrangement and allowed the exchange firms to become sub-agents of the banks, he said.

The State Bank of Pakistan, in a circular, said, no home remittances-related incentive, as provided by the government, will be claimed by the exchange companies for the transactions disbursed as sub-agent of banks.

The exchange companies would also not recover any funds from remittance recipients.

However, the banks can share with ECs any part of the incentive for home remittances, as provided to banks by the government, it added.