KARACHI: Exchange companies (ECs) have been allowed the disbursement of home remittances in the local currency and could share the benefits with banks.

The State Bank of Pakistan (SBP) on Thursday issued a circular regarding the business of inward home remittances.

“To facilitate the disbursement of home remittances, exchange companies 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 banks through their international tie-ups,” said the SBP circular.

The exchange firms were advised to ensure that no home remittances-related incentive, as provided by the Government of Pakistan, shall be claimed by them for the transactions disbursed as sub-agent of a bank.

“The ECs will also not recover any funds from remittance recipients, said the SBP. However, banks can share with ECs any part of the incentive for home remittances, as provided to them by the government.

All such transactions will be recorded by the ECs in their Core Business Application on a real-time basis; however, ECs are not required to report such disbursements to SBP, as ADs are reporting such transactions to State Bank under ITRS.

Published in Dawn, August 19th, 2022