All Heads / Principal Offices
of authorized Dealers

Dear Sirs,

Reimbursement of T.T Charges against home remittances

Please refer to our Circular letter No. 21/EPP-1(96)poly-2000 dated the 28th July, 2000 on the above noted subject.

2. Keeping in view the difficulties experienced by the banks and to provide more incentive to the banks to accelerate Home Remittance, it has been decided that henceforth:

i)The minimum amount of remittance of US$ 200/- to qualify for reimbursement of charges is reduced to US$ 100/- or equivalent to other currency (per telex/swift charges)

ii)The reimbursement rate of SR 20/- is increased to SR 25/- for each remittance.

iii)Authorized Dealers may share the reimbursement charges at their option instead of fixed SR 6/- and remit in foreign exchange to the concerned remitting agency accordingly.

iv)The already conveyed benchmark will continue for the future remittances.

The Head/Principal Offices of
All Authorized Dealers in Foreign Exchange

Dear Sirs / Madam,

Facilitation of Home Remittances

State Bank of Pakistan has an active agenda to continuously analyze global scenario related to remittances and take all necessary steps to remove barriers to the flow of remittances, and improve access to banking facilities to overseas Pakistanis and their families. In order to achieve these objectives, the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis are jointly making efforts under Pakistan Remittance Initiative (PRI).

One of the major impediments to the flow of remittances through formal channels is insufficient marketing efforts at the originator end aimed at providing information about the remittance channels and other facilitation to overseas Pakistanis. In order to address this issue, it has been decided to encourage overseas entities, having specific Home Remittances related arrangements with banks in Pakistan, to make additional efforts to facilitate remittances flow through formal channels. Under the auspices of PRI, a performance based scheme has been developed to encourage overseas entities to enhance marketing efforts at origination end. Government of Pakistan (GOP) shall reimburse marketing expenses through SBP as tabulated below:

The above scheme shall be subject to the following conditions:-

a. The scheme will be applicable to those entities who offer free remittance services under scheme of reimbursement of TT charges as per our FE Circular Letter No. 40 dated November 29, 2000.
b. The above mentioned incentives will be given on country-wise performance of the overseas entities.
c. The overseas entities will be required to submit a detailed marketing plan to the respective banks with which they have Home Remittance related arrangements.
d. The scheme will be applicable to those overseas entities which have in Pakistan arrangements with banks only and if any overseas entity itself or any of its affiliated concern is found involved in effecting remittances through channels other than banking sector in Pakistan then such entity will not be entitled for reimbursement under the scheme.
e. For the entities already effecting remittances through banking channels, their target would be 25% more than what they channeled during the period from October 01, 2008 to September 30, 2009 to qualify for the above scheme (for the entities which started operations during the above-referred period, their respective targets will be calculated by spreading their existing performance to the whole 12 months).
f. Only those entities will be eligible for reimbursement under the scheme which has satisfactory compliance status as regard to AML/KYC policies to be ensured by the bank entering into agreements.
g. The scheme shall be for one year initially and overseas entities will be reimbursed at the end of the scheme year based on actual performance as assessed by SBP.
h. The starting date for evaluating the performance would be October 01, 2009 and their performance shall be evaluated on the amounts mobilized till September 30, 2010.
i. The performance of overseas entities in terms of home remittances affected shall be reported by banks to (PRI) SBP on monthly basis.
j. The scheme shall run concurrently with any other scheme previously announced by SBP and currently in force.

The Authorized Dealers are advised to bring the above scheme to the knowledge of all overseas entities having home remittances related arrangement with them.

The Presidents / Chief Executive Officers
All Banks/DFIs

Dear Sirs / Madam,

Payment and Settlement of Home Remittance Transactions
under Pakistan Remittance Initiative (PRI)

Reliable and efficient payment systems are vital to facilitate delivery of home remittances securely and efficiently. State Bank of Pakistan has already taken initiative to develop Payment Systems Architecture of the country which would also help in achieving following objectives at the completion of all the phases:

• Automatic delivery of home remittances in beneficiary account/ over the counter system in real time; generating confirmation SMS to remitter and the beneficiary. 
• Development of robust and reliable ATM Network to offer an option to beneficiary of home remittances to withdraw cash even after banking hours and holidays 
• Development of integrated and secured payment system infrastructure of Alternate Delivery Channels (ATM POS, IVR, Call Centre, Mobile Banking) offering option to beneficiary of home remittances to make P2P payments, payments at merchant sites, payment of utility bills, fund transfer etc. This would encourage beneficiaries to maintain balance in bank accounts eventually helping increase savings/deposits. 

These goals would be achieved through phased implementation of payment system strategy. In the first phase banks will be able to use PRISM (RTGS) to transfer and settle inter-bank transactions. This would enable banks to transfer inter-bank transactions into beneficiaries’ accounts on the same day. Initially five banks (ABL, HBL, MCB, NBP and UBL) have been selected to be part of this initiative. Additional Participants may be added going forward subject to pilot tests.

Participating banks under Pakistan Remittance Initiative (PRI) are required to comply with the procedure attached in Annexure –A. Banks need to undertake proper liquidity management for reserve requirement and cash management at key geographical ATM and branch levels to accommodate anticipated increased volume and ensure smooth delivery of home remittances to the beneficiaries/ account holders.

SBP is also planning to provide facility to securely exchange data pertaining to inter-bank transactions online to effect to individual beneficiary account within stipulated time. However, banks should transfer data through secured/ encrypted email until the secured FTP server facility is made available. For exchange of data banks will use agreed standard file format attached at Annexure –B.

Participating banks are highly encouraged to take following initiatives:

• To enable a system to send SMS to the remitter and the beneficiary, after crediting the remittance amount in the beneficiary account or in the system for the cash payment at the counter. 
• Install ATMs at key locations/ branches to facilitate cash withdrawals after banking hours and holidays. In this regard they may also take measures to create awareness among beneficiaries to use ATM for cash withdrawal. 
• To promote use of E-Banking/M-Banking Channels to make payments at merchant sites, transfer of funds, pay utility bills etc. which are available even after banking hours. In this regard; banks may consider issuing Remittance Cards and reduce/ waive various fees and charges on the use of these channels. 

Participating banks need to ensure adequate controls in the process of transfer and payment of remittances in/through beneficiary’s account and over-the-counter payments. Furthermore, they are also required to carry out procedures required to ensure strict compliance of all SBP rules & regulations including those related to KYC and AML/CFT measures.

All other laws, regulations and SBP instructions relevant to remittances will also be applicable in addition to this circular.

The circular is being issued under Payment Systems and Electronic Funds Transfer (PSEFT) Act 2007 and non compliance will be subject to penalty and compensation under the relevant clauses of PSEFT Act 2007.

For any query, please contact to the Payment System Department, SBP, Karachi.

The Head/Principal Offices of all
Authorized Dealers in Foreign Exchange

Dear Sirs/Madam,

Home Remittances

Attention of Authorized Dealers is invited to the instructions relating to Home Remittances issued vide FE Circular No. 40 dated July 21, 1998. The said instructions are revised hereunder:

2. With a view to encourage overseas Pakistanis and others to use banking channels for home remittances, and to protect the remitters / beneficiaries from any losses that they may incur due to unwarranted delays in receipts of funds in the beneficiaries’ accounts, it has been decided that the banks shall put in place a mechanism as per PSD Circular No. 02/2009 dated August 22, 2009, within a week which will, interalia, ensure that :

i. In case where the beneficiary is maintaining its account within the same bank, the amount of remittance will be credited to the beneficiary’s account instantly.

ii. In case where the beneficiary is maintaining its account with bank other than the recipient bank, the recipient bank will intimate and give credit of the same to the other bank as per guidelines in PSD Circular No. 02/2009 dated August 22, 2009, however maximum within 24 hours of the receipt of funds. The bank maintaining the account of the beneficiary, after receiving intimation and funds from the recipient bank, will give credit to the beneficiary’s account instantly.

iii. In case where the payment is required to be made through Pay Order/ Demand Draft to the beneficiary, the bank will issue and dispatch the same within the 24 hours of the receipt of funds by the bank.

iv. In case where the banks are offering the facility of cash over the counter to the beneficiary, the banks shall ensure the availability of the funds instantly.

3. In case where the amount of remittance is not credited/ paid to the beneficiary as given in para 2 above, the beneficiary shall be entitled to a return of sixty five (65) paisa per thousand rupees per day for the number of days credit/payment on account of remittance was delayed. The banks are, therefore, directed to ensure that the amount of remittances is credited/ paid to the beneficiary within time frame laid down in para 2 above. In case of delays in the crediting/ making payment of remittance amount, they shall remunerate the beneficiaries at the rate given above.

4. Where a tendency is noted by the State Bank on the part of any bank, either through inspection or on the basis of the pattern of complaints, to delay the credit/ making of payment to the beneficiary’s account, penalties shall be imposed on such banks under the provisions of the Banking Companies Ordinance, 1962.

The Presidents/Chief Executives
All Banks

Dear Sirs/Madam,

REVISION IN BRANCH LICENSING POLICY

Please refer to BPRD Circular No. 15 dated October 12, 2007 whereby revised Branch Licensing Policy (BLP) was announced.

2. Keeping in view the rising trend in the Home Remittances and importance of the same for the economy, it has been decided to allow the banks to open dedicated Home Remittance payment centers. For the purpose of opening of dedicated Home Remittance payment centers, it has been decided to enhance the scope of Permanent Booths as given in Para-22 (Chapter-2) of the BLP. Therefore, the following sub-Para (iv) has been added to para-22 with immediate effect:

iv) Payment to Home Remittance beneficiaries via cash, demand draft and pay orders. In addition, such Home Remittance Payment Centers (permanent booths) would also be allowed to perform the functions of Sales & Service Centers as mentioned in Para- 19 of the BLP.

3. All other instructions on the subject shall remain unchanged.