ISLAMABAD: The government on Wednesday gave an undertaking to the commercial banks to clear Rs12 billion transfer charges on account of foreign exchange remittance in three stages within six months.

The agreement was reached at a meeting presided over by Finance Minister Ishaq Dar and attended by senior representatives of leading banks and State Bank Governor Ashraf Wathra.

The meeting had a detailed overview of the Pakistan Remittances Initiative (PRI) expressing satisfaction on the steady increase in foreign remittances, especially eulogising the contribution of overseas Pakistanis who were increasingly adopting banking channels to send remittances.

The finance minister said that the transfer charges accrued up to June 2014 would be paid to the banks in accordance with their due share by July 2015.

Out of this amount Rs6bn would be paid by January 2015 while Rs3bn each would be paid in April and July 2015 respectively, clearing the backlog till June 2014.

An official statement said the minister also shared efforts of the government to boost the economy and mentioned achieving $15bn foreign currency reserves target which qualifies Pakistan to become IBRD member and eligible for better financial packages.

The SBP governor impressed upon the banks to provide loans to private sector especially SMEs. He expressed satisfaction on the growth of agricultural credit.

The bank representatives appreciated a clear cut time line for payment of transfer charges and assured their all-out support for economic development.

PRI is a joint venture of the Ministry of Finance and State Bank of Pakistan launched in 2009 offering incentives to overseas Pakistanis to remit their money through banking channels.

Under the scheme, the federal government undertakes to pay transfer charges for remittances above $100 sent through authorised banks and exchange companies as listed with the SBP.

Published in Dawn, December 25th, 2014