KARACHI, March 18: Overseas Pakistanis sent back home a little more than $1.3 billion during the first eight months of this fiscal year (July 2001-February 2002). In the same period of last fiscal year they had sent only $637 million.

The State Bank said on Monday that home remittances including encashment of foreign exchange and foreign currency bearer certificates as well as Hajj remittances totalled $1.317 billion between July 2001-February 2002. The SBP said in a press release that in February 2002 Pakistan received $236 million up 202 per cent over the $78 million home remittances received in February 2001.

The cumulative remittances of $1.317 billion received in the first eight months of this fiscal year also shows an increase of about 107 per cent over the $637 million remittances received in the same period of last fiscal year.

The pace of home remittances picked up after the tightening of anti-money laundering laws in the US and elsewhere in the wake of the September 11 events.

The remittances that are the second largest source of foreign exchange earning after exports have been on the rise also due to narrowing down of the difference between the inter-bank and open market exchange rates.

Before September 11, 2001 the spread between the inter-bank and open market exchange rates had been more than Rs2 per dollar but it slid to a few paisa by the end of last month.

When the difference between the two rates was high overseas Pakistanis were suffering losses in sending money back home through legal channels.

The falling gap between the inter-bank and open market rates has saved them from booking such losses and lured them into remitting money through banks rather than through hundi.

Bankers say home remittances may reach near $2 billion during this fiscal year if the spread between the inter-bank and open market exchange rates remains at the present level of 20-25 paisa.

They say that high-tech arrangement made by some state-run and private banks for handling home remittances may help increase the inflows on this account.