ISLAMABAD: The Pakistani government’s proposed cash incentive to foreign exchange companies on surrendering US dollars in the interbank market will help boost remittances, discourage illegal money transfers and currency smuggling, Pakistani currency dealers said on Saturday.
The Economic Coordination Committee of the federal cabinet on Friday approved a proposal to provide exchange companies with cash incentives of Re1 for surrendering each dollar mobilized from inward remittances.
Exchange companies are now required to surrender 100 percent of their inward remittances in the interbank market to take full advantage of the scheme.
The government has approved the proposal and directed authorities to review the model for further improvement as the country struggles to boost its foreign reserves and stabilize rupee against dollar.
“We welcome the government’s initiative as this will help us compete with hawala/hundi (illegal money transfer channels) by offering different schemes to remitters,” Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), told Arab News.
He said exchange companies would now be offering better exchange rates to remitters besides offering gifts, schemes and other incentives. “This will ultimately help Pakistan boost its much-needed foreign remittances from different countries and stabilize our currency.”
Paracha said exchange companies were playing a major part in facilitating inward remittances as they deposited around $5 billion in banks last year.
He said this was their core business and their network operated across the globe to facilitate people in sending remittances back home.
Earlier, the government was only offering incentives to banks for receiving and delivering inward remittances, which experts said was helping hawala/hundi do majority of business by offering better exchange rates to remitters.
Paracha said banks were getting around Rs6-8 against each dollar, while the government was offering only Rs1 to exchange companies. “We hope the government will further increase our margin to completely document this whole business,” he said.
Exchange companies would be buying dollars from everywhere to deposit in banks to earn more and this would ultimately result in preventing smuggling of foreign currencies, the ECAP general secretary said.
Besides inward remittances, these companies also receive funds by exporting currencies other than the US dollar and receiving an equivalent in greenbacks in return from their customers. But this part of their business is not part of the recently announced incentive scheme.
“Once the whole business of foreign currency is regularized and documented through different incentives, it would help the government meet its FATF (Financial Action Task Force requirements as well,” Paracha said.
Exchange companies were earlier required to surrender 10 percent of their export proceeds and 15 percent of inward remittances in the interbank market, as per the State Bank of Pakistan’s (SBP) regulations.
They were free to use the rest of the funds to either sell in the open market or make outward remittances on behalf of their customers.
“This government incentive to exchange companies will break the backbone of hawala/hundi and the whole business will become legal,” Saleh Mohammad Khan, chairman of AA Exchange Company in Islamabad, told Arab News.
“We will now be offering competitive and even better rates to remitters as more remittances will increase our incentive.”
Overseas Pakistanis who used to carry cash while traveling to Pakistan would now prefer to remit their money through legal channels for better exchange rates, Khan added.
Pakistan’s cash incentive to exchange companies to help boost remittances — currency dealers
https://arab.news/r83ws
Pakistan’s cash incentive to exchange companies to help boost remittances — currency dealers
- Under the scheme, exchange companies will get Re1 against each surrendered US dollar in inward remittances
- Currency dealers say initiative will help discourage illegal money transfers, stabilize rupee against greenback
Pakistan imposes three-day curfew in Gilgit, Skardu cities after violent Khamenei protests
- At least 14 people were killed in the region where protesters burned UN offices, police station, school and a local charity
- Gilgit-Baltistan government spokesman says the situation is under control, police chief urges the residents to stay indoors
ISLAMABAD: Authorities have deployed troops and imposed a three-day curfew in the northern Pakistani cities of Gilgit and Skardu, according to a notification issued Monday, after over a dozen people were killed in clashes over the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei in US-Israeli strikes.
Pakistan’s northern Gilgit-Baltistan (GB) region, where the two cities are located, saw violent clashes on Sunday as protesters set fire to and vandalized several buildings, including United Nations (UN) regional offices, army-run school, software technology park and an Aga Khan Rural Support Programme office.
Clashes with law enforcement agencies caused the deaths of at least 14 people in the region, among them a soldier, GB Caretaker Information Minister Ghulam Abbas confirmed told Arab News. He said around 50 others were injured.
“In wake of prevailing precarious law-and-order situation... it is expected that the situation may deteriorate further in Gilgit-Baltistan, particularly in District Gilgit and Skardu,” Deputy Home Secretary Ghulam Hasan said in a notification on Monday.
“It is therefore requested that Pakistan Army troops may be deployed in District Gilgit and Skardu and curfew may be imposed for an initial period of three days (2nd, 3rd and 4th March) to prevent any untoward incident and danger to human life and property.”
Separately, UN spokesman Stephane Dujarric said on Monday that protesters became violent near the UN Military Observer Group in Pakistan (UNMOGIP) Field Station, which was vandalized.
“The safety and security of UN personnel and premises throughout the region remain our top priority, and we continue to closely monitor the situation,” Dujarric said.
Shabir Mir, a Gilgit-Baltistan government spokesman, said the situation was under control and that the curfew would remain in place until Wednesday as police chief Akbar Nasir Khan urged residents to stay indoors.
Anger has been rising in Pakistan, particularly among members of the Shiite minority, following US and Israeli strikes on Iran that killed Khamenei and other senior officials. While Shiites are a minority nationwide, they form a majority in some northern districts and boast significant numbers in major urban centers.
Demonstrators in Pakistan’s southern port city of Karachi also stormed the US Consulate on Sunday, smashing windows and attempting to burn the building. Police responded with batons, tear gas, and gunfire, leaving 10 people dead and more than 50 injured.
The US embassy and its consulates in Karachi and Lahore canceled visa appointments and American Citizen Services on Monday, citing security concerns. Pakistani authorities have beefed up security at US diplomatic missions across the country, including around the US consulate building in Peshawar, to avoid any further violence.
Also Monday, the Pakistan Stock Exchange plunged, with the benchmark KSE-100 Index falling nearly 10 percent amid rising geopolitical tensions following attacks on Iran. Investors sold off shares across sectors, with analysts citing heightened uncertainty as the main driver behind the sharp decline.
Sunday’s unrest came amid ongoing cross-border fighting between Pakistan and Afghanistan, which began Thursday after Afghanistan launched attacks in retaliation for Pakistani airstrikes the previous Sunday. Pakistan has since carried out repeated operations along the border.
— With additional input from AP.
