(MENAFN- Gulf Times) At least six proposals are under consideration by the Imran Khan government to encourage non-resident Pakistanis to send remittances to the homeland through formal channels means instead of informal ones like Hawala and Hundi, a news report has revealed.
'Prime Minister Imran Khan was immensely excited when he was briefed on how a lion's share of the estimated $10bn to $25bn remittances sent through (informal) modes can be tapped by putting in place various swift measures, a report published by The News newspaper said, quoting an unnamed senior official who had attended the recent briefing.
He said that the reason why Khan was eager is obvious the government is starved of foreign exchange.
The report said that major institutions like the finance ministry, the State Bank of Pakistan (SBP), and the Federal Board of Revenue (FBR), are currently devising a composite plan which will also incorporate the comprehensive briefing given to the prime minister by the Overseas Pakistanis' Foundation (OPF) in their presence.
The official said it will not be immediately possible to get all the remittances sent through informal methods to be transmitted via the formal channels.
The response will depend upon the incentives.
The official listed the steps explained to the prime minister that are needed to be taken to encourage Pakistani expatriates to use banking channels.
One, overseas Pakistanis should be offered rates as per the open market exchange rate of the currency in which they remit their sums to Pakistan.
Presently, banks offer up to Rs5 less per dollar than what these remitters can get in the open market.
This is a great disadvantage, discouraging them from transmitting their savings through the banking channels.
The second proposal, according to the official, is that the expatriates should be exempt from remittance charges by Pakistani banks.
If they send their money through the foreign banks, these charges should be reimbursed by the Pakistan government.
The third proposal is that the delivery of the remittances should be speedy, matching or even surpassing the speed of the services that Hawala or Hundi operators offer.
The fourth suggestion is that an application be designed and made available for installation in the mobile phones of Pakistanis proceeding abroad to work, through which they can instantly remit their foreign exchange.
Remittances through banks normally take four to five working days to reach recipients.
Non-resident Pakistanis have to be facilitated and saved from the hassle of going to the banks to send their money.
The key here is that receipts should not be late, and not less than the open market exchange rate.
The fifth proposal is to increase the duty credits for non-resident Pakistanis.
These credits should commensurate with the quantum of foreign exchange they remit to Pakistan.
When they return to their homeland, they bring items, on which duty is levied.
The sixth incentive, according to the report, is to display better conduct at Pakistani airports during the departure and return of non-resident Pakistanis, who always complain of coarse behaviour at these points.
The official said that a package containing these proposals will shortly be unveiled by the prime minister.
He said that the World Bank and some local research institutes have conservatively assessed that up to $25bn is being sent home annually by non-resident Pakistanis through the informal channels, and their money is received by the relatives in rupees.
As a result, the official said, no foreign exchange is received by the country, which the government sorely needs.
The official said that the remittances through Hawala and Hundi also promote the involvement and remittance of corrupt money and encourage money laundering.
He said that the major institutions are also keenly studying the successful Philippines model, which has led to a significant increase in the receipt of foreign exchange from its overseas workers.
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