KARACHI, Oct 21: Pakistan witnessed massive inflows of remittances from all over the world mainly because of organised collection of Zakat, charity and donations for earthquake victims, say bankers.

These foreign exchange inflows of Zakat and donations would further increase the volume of overseas remittances. The bankers said that for the first time such huge Zakat and donations came, most of them were meant for the earthquake victims.

“When the earthquake hit the northern parts of Pakistan in October last year, it was already Ramazan and there was less time for collection of Zakat and donations,” said an official at foreign exchange wing of a large bank, adding: “But this year Zakat and donations were collected and remitted by the Muslims,” he said.

Most of the bankers involved in the remittances reported high inflows. The State Bank has also reported an increase of 23 per cent in the first quarter -- July-September 2006-07.

A banking official estimated that a better remittance facility and more donations could add up to about a billion dollars into the total remittances of the country.

“Banks having overseas branches have geared up their effort to line up remittances, including donations and Zakat through banking channels, and it produced positive result,” said Jamal Siddiqui, a local banker.

He said that remittances were still high at the end of Ramazan. Even otherwise during Ramazan the quantum of remittances increases because Pakistanis living abroad send money to their relatives. They also send Zakat to help poor in Pakistan. This year, however, earthquake victims are real beneficiaries.

Charity organizations involved in the rehabilitation of earthquake victims issued reports just before Ramazan about the plight of the victims. The reports accused the government of doing little for the victims. International donors confirmed that 1.8 million people were still living in makeshifts and unable to face harsh winter knocking the doors.

“These reports were highlighted by the world media just before Ramazan and motivated thousands in America, Canada and other countries to send their Zakat to Pakistan,” said Aamir Ali, an American national Pakistani currently visiting home in Karachi. He himself was involved in collecting donations for the earthquake victims and charity organizations running free hospitals, clinics and schools in Pakistan.

However, it was observed that the flow of remittances through the Hundi system was also on the rise. Although this business is not legal, some exchange companies are involved.

Market sources said that some exchange companies offered remittance facility from overseas to Pakistan and also from Pakistan to abroad. However, their cost of transfer is much higher than the banking system, especially when remittances are made from Pakistan to European countries other than England.