New incentives proposed to boost remittances

The State Bank of Pakistan (SBP) has proposed performance-based incentives for banks and exchange companies to encourage higher remittance inflows through formal banking channels. Sources told The Express Tribune that during a recent Economic Coordination Committee (ECC) meeting, the deputy governor of SBP explained that the current incentives, which are transaction-based, need to be revised to focus more on performance. Previously, the incentive base rate was 30 Saudi Riyal (SAR) per $100 transaction. The SBP has now proposed reducing this base incentive to 20 SAR per $100 transaction. An additional reimbursement of 8 SAR per incremental eligible transaction would be made for growth up to 10% or $100 million over the previous year, whichever is lower.