KARACHI, June 23: The Pakistan Post Office distributed Rs2.4 billion as remittances - or the amount of foreign exchange sent back home by overseas Pakistanis - from March 2003 to March 2004.

Officials said that the PPO had signed an agreement in this regard with the Habib Bank Limited after getting permission from the State Bank of Pakistan, under the Companies Ordinance 1984 on July 14, 2001. The agreement had come into force on Aug 1, 2001. They said that another agreement of the same nature had been signed with the Western Union Bank.

They explained that the PPO received remittances from more than 180 countries. According to the data recently released by the State Bank of Pakistan, expatriate Pakistanis sent $3.473 billion to Pakistan in the 11 months.

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

PPO sources told Dawn that through ordinary money order service remittances would be delivered in two days at most. Remittances sent through fax money order would be delivered within 24 hours, they added.

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."

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 feeling 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," he added. 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.