KARACHI, Dec 16: The Pakistan Post Office has started delivering home remittances — or the amount of foreign exchange sent home by overseas Pakistanis — through its 59 general post offices and head post offices in the country, officials said here on Saturday.

They added that the PPO had signed an agreement with the Habib Bank, with permission from the State Bank, under the Companies Ordinance 1984. The agreement had come into force on Aug 1.

Under the agreement, the foreign remittances booked by the Habib Bank will be paid by post offices in the rupee through money order services (both ordinary and fax).

PPO sources told Dawn that through ordinary money order service remittances would be delivered in at most two days. Remittances sent through fax money order would be delivered within 24 hours (same day).

The postmaster general of Sindh, Qamar Jameel, said: “The move is aimed at facilitating people in all parts of the country, especially rural areas, where people are more familiar with post office staff than bank officials. The PPO will charge a nominal commission for services to the Habib Bank.”

The agreement says: “In consideration of the Pakistan Post Office providing the remittance services the Habib Bank shall pay charges/commission in case the remittance is desired through ordinary money orders at the rates as mutually agreed.”

The sources said that for a Rs5,000 ordinary money order, the PPO would charge Rs20; for a Rs10,000 money order, Rs30; for a Rs15,000 money order, Rs40; for a Rs30,000 money order, Rs50; for a Rs50,000 money order, Rs60; and for a Rs100,000 money order, Rs75.

They added that for the fax money order in zone I, the PPO would charge Rs25; in zone II, Rs30; in zone III, Rs35 and in zone IV, Rs40.

Under the terms stipulated in the agreement, the PPO will ensure payment of money orders within 48 hours in case of disbursement in the same city, 72 hours in big cities/towns and 96 hours at all other places.

A senior banker said that after the Sept 11 terrorist attacks in the US, governments all over the world had started placing curbs on illegal banking channels — known as the Hundi system in Pakistan and the Havala system in India — which had allegedly been employed to send money to those responsible for the attacks. “Many Hundi/Havala centres all over the world, especially in the UAE, were raided. As a result, people, particularly the overseas Pakistanis, started to feel that their money might get stuck up if they sent it home through non-banking channels. Little wonder, then, that the home remittances have gone up since Sept 11.”

According to the State Bank, the home remittances registered an increase of 44.4 per cent during the first four months of the current fiscal as compared to the same period last year.

During July and October, remittances totalled $449.59 million as against $311.2 million during the corresponding period last year.

The major increase took place in October when $185.45 was received as workers’ remittances as compared to $80.9 million received in Oct 2000, showing an increase of 129.2 per cent.

Analysts say that previously people preferred Hundi/Havala system to banking channels for two reasons. First, the difference between inter-bank rates of the dollar and the open-market rates was large enough to make people opt for non-banking channels. Secondly, the banks were not prompt enough to deliver the home remittances to people. “While the operators of the Hundi system could deliver the home remittances the same day, the banks used to take at least a week to do so,” they explain.

They add that in an attempt to eliminate the Hundi system the government has significantly lowered the difference between the inter-bank rates of the dollar and those of the open-market.