Senate body informed: Banks may remit USD800m to money transfer operators

ISLAMABAD: Pakistani Banks are likely to remit around USD 800 million to money transfer operators abroad to facilitate remittance inflows, following the discontinuation of the Pakistan Remittance Initiative (PRI) scheme by the government. This was revealed by Senator Saleem Mandviwalla, while chairing a meeting of the Senate Standing Committee on Finance and Revenue, here on Tuesday. Mandviwalla’s claim was, however, denied by Deputy Governor of the State Bank of Pakistan (SBP), Dr. Inayat Hussain, saying that no such plan is under consideration. Briefing the Committee, Dr Inayat Hussain said that Pakistan is set to roll out a new series of currency notes amid rising circulation of counterfeit Rs1, 000 and Rs5, 000, with each new note costing around Rs14 to produce, while the Rs10 note is to be phased out. The Committee reviewed matters relating to currency security, the Pakistan Remittance Initiative (PRI), protection of foreign investments and concerns regarding fraudulent practices by different companies. The Committee expressed serious concern over reports that bank ATMs were dispensing counterfeit Rs5, 000 and Rs1, 000 notes. The Chairman raised the issue of three Rs5, 000 currency notes submitted to the SBP for verification nearly two years ago, for which the SBP response is still awaited. The SBP Deputy Governor told the committee that work on new currency notes had begun. He said the government had constituted a ministerial committee, headed by the Finance Minister, to oversee the process of designing the new currency notes. The Deputy Governor said the SBP wanted to ensure that there were no objections to the design of the new notes and that the government’s ministerial committee had already approved the design. Senator Mandviwalla questioned the process of appointing consultants for the new currency notes. He said the SBP had hired a consultant for the design of the notes who would also be involved in the printing process. “This does not happen anywhere in the world. All details of this tender should be provided, ” Mandviwalla said. Senator Agha Shahzaib Durrani said the SBP had been working on the new currency notes for two years but had yet to complete the process. “Two years have passed, but the State Bank has not been able to complete this task, ” he said. The SBP Deputy Governor informed the Committee that the existing Rs5, 000 banknote was introduced in 2005 and that advancements in technology had made counterfeiting easier. He stated that a tender had been advertised under PEPRA rules for designing a new note. Four bidders participated in the process, and the contract was awarded to a consulting firm, which was currently incorporating the required changes. The design would subsequently require approval of the Federal Government. The Chairman of the Senate body directed the SBP to provide complete details of the bidding process and expressed concern over the circulation of counterfeit currency. The Committee was informed that approximately one year would be required to introduce the new notes into circulation, while the printing cost of Rs5, 000 banknote was approximately Rs14. Senator Anusha Rahman Ahmad Khan emphasised the need to streamline the approval process for currency designs to avoid repeated referrals for minor amendments and unnecessary delays. She also proposed the use of AI to streamline the process. The SBP Deputy Governor briefed the Committee on the Pakistan Remittance Initiative (PRI), stating that the Government had initially provided subsidies to banks to facilitate remittances by overseas Pakistanis. He informed the Committee that Rs120 billion had been provided as a subsidy, which was curtailed during the previous year. Due to prevailing fiscal constraints, the Government was unable to continue the subsidy under the current budget. The banks had therefore decided to bear the associated costs from their own resources to ensure continued facilitation of remittances. However, the committee chairman said that the banks are allegedly planning to remit USD 800 million to money transfer operators for bringing remittances. The committee was informed that around USD 257 million was paid last year for bringing around USD 41. 6 billion in remittances. The Committee appreciated the initiative and decided to invite selected banks at its next meeting to brief it on their performance and contribution to the remittance sector. Replying to a question regarding the stability of the dollar against the rupee, the SBP Deputy Governor informed that improvement in the economic situation as well as enforcement helped in keeping the dollar demand low. The Committee reviewed the F. E. Circular, 1999, concerning the protection of investments and deposits of foreign investors in Pakistan. The Deputy Governor, State Bank, informed the Committee that the instructions had been communicated to the concerned banks at that time for the protection of the amount of foreign investors and, according to the State Bank’s record, no such case remained pending with the Bank. Copyright Business Recorder, 2026

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