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Mashreq
Keeping up with surge in remittances Mashreq provides secure channels for fast and safe money transfers
Lifeline for growth
Remittances to the tune of $2 billion per month is a blessing in disguise ■■ Ishtiaq Ali Mehkri
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akistan’s economic lifeline is remittances from overseas workers, which has acted as a catalyst for growth and investments. It is one of the major sources of foreign exchange reserves for the country. The State Bank of Pakistan, in one of its recent reports, said that Pakistan has fared relatively better than other regional countries in terms of foreign remittances. Estimates say an average of $1.7 to $1.9 billion are received on a monthly basis, which accounts for a staggering $20 billion per annum. Most of the remittances are from the Middle East and Gulf countries, especially Saudi Arabia, UAE, and Oman. However, a silent but sizeable chunk of remittances, although on a quarterly and six-monthly basis, are also registered from the U.S., the European Union, South Africa and Australia. Many Far East Asian countries, especially Malaysia and Hong Kong, are also potential remittances pockets. This primarily acts as seed money for the country’s balance of payments, and to a great extent compensates for lack of foreign investment and slowdown in portfolio investments. The pre-budget Economic Review of 2015-16, however, estimated that remittances can
grow by 50 per cent if the government provides due incentives to its non-resident citizens, and ensures that their foreign exchange is safe and reusable in the same currency. Likewise, remittances directly deposited in Pakistani bank accounts can also get a boost and shoot up to $100 billion — a retained safe territory if stringent measures are taken and assurances on withdrawal limits are waived. The free flow of foreign currency in the form of remittances can lift the economy to new heights. Pakistani foreign currency accounts maintained abroad are in billions of dollars, and a submission on the floor of the house said that they tune to around $800 billion. That money sooner than later should be in the mainstream of Pakistan’s conomy. — mehkri@khaleejtimes.com
Peer-to-peer money transfers, also known as remittances, make up a large portion of a country’s overall GDP. Research has shown that remittances are particularly key in developing countries where the transfer of funds can significantly help improve the quality of life of families and communities that require financial aid and relief. Remittance is a lifeline for many people in the developing world, and it comes as no surprise that there has been a surge in the number of money transfers globally. There are many factors behind the increase of remittances, but economic migration and displacement are key drivers. According to recent findings, the size of remittances — including officially recorded and unrecorded transfers through informal channels — could be much larger than the recordings of The World Bank. Remittances are now more than double the size of net official flows, standing close to foreign direct investment as the number one transfer as a source of external finance for developing countries. Here in the UAE, the number of remittances have significantly increased over the years and Pakistan stands out as a popular destination for money transfer. The cost of sending money between the UAE and Pakistan is considered one of the cheapest in the world, according to the World Bank, and to date; Pakistan remains one of the top 20 remittance-receiving countries globally. External factors, including globalisation, are creating more distance between families and loved ones and as a result, remittances are on the rise. To meet this demand, banks must create innovative solutions to make the transfer of money as efficient as possible. With this in mind, Mashreq has focused its efforts on making money transfers as easy and safe as possible. In April 2017, the bank launched QuickRemit, a new remittance service to Pakistan in response to the increasing rise in remittance transfers into the country. With QuickRemit, customers can now transfer Pakistani rupees free of charge through the bank’s digital platforms: MashreqOnline and Snapp.
The State Bank of Pakistan, in one of its recent reports, said that Pakistan has fared relatively better than other regional countries in terms of foreign remittances.
To home, with love
Thanks to its huge expat workforce, Pakistan has become one of the largest remittances recipient countries in the world
F
irst the facts. Overseas Pakistanis remitted close to a whopping $19.30 million from July 2016 to June 2017, according to State Bank of Pakistan (SBP), with $4.31million from the UAE alone. Most forex centres in the UAE are expecting record-breaking remittances by expatriate Pakistanis in the coming years. Clearly, the initiative by the State Bank of Pakistan (SBP), Ministry of Finance and Ministry of Overseas Pakistanis to facilitate and support a faster, convenient and efficient flow of remittances seems to be bearing fruit. SBP noted that workers remitted $19.91 billion in 2015/2016,
marking a growth of 6.38 per cent compared to $18.72 billion received in the preceding fiscal year. In June 2017 alone, the inflow of worker’s remittances amounted to $1.83 million. During this month, inflows came from Saudi Arabia, UAE, U.S., U.K., GCC countries (including Bahrain, Kuwait and Oman) and EU countries. According to an official at the Pakistan Embassy in the UAE, overseas Pakistanis have been and will remain the co-authors of Pakistan’s success story. By dint of hard work and sacrifice they have not only carved a name and niche for themselves
in foreign lands, but also contributed immensely to the uplift of their communities and country back home. “The Pakistani community in the UAE, which in terms of sheer numbers is one of the largest of our diasporas, and in terms of diversity, perhaps the most representative of our kaleidoscopic country, has played a vital role in national life. By sending remittances now to the tune of over $4.2 billion a year, they continue to help buttress the national economy. And they have been fantastic ambassadors of Pakistan, to a country that all Pakistanis hold dear and close to their hearts,” he had said. Besides increased facilities to expat Pakistanis like simplified transfer procedures, the jump in remittances is attributed to competitive exchange rates and better service from banks and exchange bureaus. Habib Bank’s HBL FastTransfer, for instance, allows dear ones back home in Pakistan to receive remittances instantly and for free across all HBL international branches. Users can also take advantage of its FastCash option to send amounts of up to PKR 500,000 per transactions that can be collected instantly from any HBL branch within three days of transfer. Similarly, the National Bank of Pakistan makes it very convenient to remit money to any beneficiary’s account in a matter of minutes, completely free of charge. “Sending money through legal foreign exchange centres and banking channels contributes to the wealth of Pakistan by boosting the nation’s economy. These days you can easily remit money to Pakistan from the UAE and what is more, the money can be expected to reach the destination
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Rohit Garg, Head of Business Banking, Mortgages, Liabilities and Remittances at Mashreq Bank QuickRemit offers customers the option to transfer money instantly with a quick registration process. Once completed, the customer can start sending money to their respective beneficiaries immediately. This service is free, incurs no fund transfer fees or corresponding bank charges, and is applied to all banks across Pakistan. In the digital environment, secure money transfer is a concern for consumers. QuickRemit is highly secure and has been created with security in mind. For example, if there are any discrepancies between transactions, the system will reject the request and the transfer will become null and void. Customers are at the forefront of the business, and as a bank, services are designed to be instantaneous, safe and beneficial to both the sender and receiver. Whether it’s sending money to a relative, family or to another bank account in Pakistan — these transfers are free of charge with zero remittance fees and are processed immediately with simple solutions to access and deliver money. Remittances by and large remain an especially important and stable source of private inflows to developing countries, as they bring in large amounts of foreign cash flow, which in turn sustain economic growth in the long run. In today’s fast-paced environment, efficiency is key. Remittances continue to be an integral part of people’s lives in this part of the world and as such, it is important to create solutions to meet the increased demand for quick, safe and accessible services.
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R e m i t ta n c e S to P a k i s ta n
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To home, with love » Continued from previous page
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LuLu Exchange
Transfer with trust LuLu Exchange offers strong portfolio of services for customer convenience With Pakistan recording a modest growth of 2.8 per cent in money remitted by its expatriates, Pakistan’s remittance in 2017 is expected to grow 1.4 per cent as per recent reports by World Bank. At present, around nine million Pakistanis live abroad, out of which a major chunk comes from the UAE. Remittances play an important role in the development of Pakistan’s economy and is a major source of income for a large number of families. Assisting remittances to Pakistan is LuLu Exchange, an ISO 9001:2015 certified organisation, which has over the years grown to become the leading financial services brand trusted by expats to send their hard-earned money to their loved ones. From tie-ups with the
best financial institutions to exclusive products like ‘LuLu Now’, which allows immediate credit to designated bank accounts instantly, the repertoire of LuLu Exchange’s services has always put it a step ahead of its peers. Apart from providing the best rates, LuLu Exchange has strategic partnership with some of the leading banks in Pakistan such as the Bank of Punjab, Bank Al Habib, Allied Bank and UBL, to name a few, along with Western Union. Besides remittances, customers can exchange foreign currency at competitive rates and avail other value-added services like the purchase of national bonds and mobile top-up for their home country, among others. The organisation also offers its customers the Gold Card, which allows them to obtain a host of benefits at LuLu Exchange bureaus, and discounts at various other shopping and hospitality partners. LuLu Exchange, which has been voted a Superbrand two years in a row — in 2016 and 2017 — currently has over 140 branches spread across the UAE, Oman, Kuwait, Qatar, Bahrain, India, Seychelles and Philippines.
Apart from providing the best rates, LuLu Exchange has strategic partnership with some of the leading banks in Pakistan such as the Bank of Punjab, Bank Al Habib, Allied Bank and UBL, to name a few, along with Western Union.
within 24 to 48 hours,” said Faheem Khan, a young banking executive. On a related note MCB, a top Pakistani bank, offers home remittances to overseas Pakistanis at no extra cost. The bank, with its large network of over 1,100 branches, has international sendagents like MoneyGram, Xpress Money and RIA financial that facilitate remittances to family and friends in Pakistan quickly, easily and conveniently. Similarly, in the UAE, UAE Exchange, a global name in remittance and foreign exchange, with a strong network spanning across 29 countries and five continents, is a popular money-sending bureau with many overseas Pakistanis in the UAE. ‘LuLu Now’ by LuLu Exchange allows immediate credit to designated bank accounts instantly, while QuickRemit from Mashreq allows customers to transfer Pakistani rupees free of charge through the bank’s digital platforms: MashreqOnline and Snapp. Earlier this year, a study by the UN International Fund ranked Pakistan as the third largest receiving country for remittances in 2016, with figures recording $20 billion. The Economic Survey of Pakistan noted that the government is also aiming to explore new markets to export its manpower as well as incentives for the remit-
tances to further enhance its growth. International Monetary Fund (IMF) figures show that the huge jump in remittances to Pakistan is a direct result of higher worker migration and the exodus of more highly skilled workers from the country. “On the economic front, Pakistan has surpassed many milestones under the present leadership. During the last three and half years or so, the country has witnessed positive macro-economic indicators. The reports of various reputed international rating agencies bear testimony to this fact. Similarly, international financial institutions (IMF and World Bank) have posted their confidence in economic policies being pursued by the present government. The country’s foreign exchange reserves have surpassed the mark of $22 billion. Pakistan Stock Exchange is trading at its highest point,” said Syed Javed Hassan, Consul General of Pakistan in Dubai. While the exact number of Pakistanis working abroad is not available, according to the country’s Ministry of Foreign Affairs, more than five million Pakistanis are currently present in the Middle East, Europe and North America. Around one million Pakistanis work in the UAE alone. With high remittances, a huge development is being encouraged in Pakistan. Moreover, the money is positively contributing to the migrants’ own home communities.
R e m i t ta n c e S to P a k i s ta n
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UAE Exchange
Remittances to Pakistan on the rise Steps underway to curb money laundering and boost remittances through legal channels Today the world witnesses more than $400 billion moving across borders as remittances. These remittances strengthen the GDP of the receiving countries. In 2016, Pakistan received an all-time record remittance volume of $19.8 billion, to become one amongst the top five remittance-receiving countries in the world. The State Bank of Pakistan (SBP) had launched the Pakistan Remittance Initiative in 2009, to ensure smooth and free remittances to Pakistan. This initiative, taken by the government, has resulted in significantly increasing remittance flows to the country through formal and legal channels. Despite the rollercoaster ride the market is going through and the many illegal forms of money transfers, Pakistan expects to see a further hike of 10 per cent in remittances in the fiscal year 2017. However, the fact that only 15 per cent of Pakistan’s population has bank accounts, opens the gates for illegal forms of money transfers. A recent study, conducted by the U.S. State Department, states that Pakistan loses over $10 billion a year because of money-laundering activities. To tackle this, SBP, in association with foreign embassies, is taking measures to align the country with the idea of financial inclusion. As the leading global remittance, foreign exchange and payments solutions brand, UAE Exchange is always at the forefront to create awareness and educate people about money-laundering and the harm such activities cause, not only for the individual but also for their country. The brand ensures that its compliance measures are in place and up-to-date to encounter money-laundering and illegal currency transactions. With a wide range of financial solutions for the overseas Pakistani community, UAE Exchange offers free money transfers at the most competitive rates, as well as FLASHremit, the real-time account credit facility for instant money transfer. Almost all major banks in Pakistan have partnered with UAE Exchange for FLASHremit to ensure an enhanced customer experience. Let us pledge to make use of these legal and formal channels of sending money, which not only combat illegal money transfers but also contribute to the development of the country and its economy.
Pakistan Remittance Initiative eases remittances flow and promotes investment opportunities for non-resident expats
W
ith workers’ remittances playing a big role in sustaining the economy of Pakistan, it became necessary to establish a framework to regulate the phenomenon. In response, the State Bank of Pakistan, the Ministry of Overseas Pakistanis and the Ministry of Finance joined hands to set up the Pakistan Remittance Initiative (PRI) in August 2009. The joint initiative focuses on two main objectives, i.e., to facilitate and support faster, cheaper, more convenient and efficient flow of remittances through formal channels, and create investment opportunities in Pakistan for overseas Pakistanis.
The PRI adopted a multi-faceted strategic approach that included: Enhanced outreach: Focused on bilateral arrangements to create a separate efficient remittance payment highway based on developing formal links with financial institutions abroad (from less than 20 to over 400). Enhanced distribution channels: Expanded services offered by post offices and microfinance banks, and identification of high remittance-receiving areas (resulting in 10,000 additional physical locations in Pakistan for receiving remittances). Improved payment system infrastructure: Instrumental for systems such as cash over-the-counter and inter‑bank settlements. Innovative remittance products: PRI provides advisory services to banks for introducing innovative remittance products such as cards and Internet-based remittances. Prize incentives: The Government of Pakistan announced the reimbursement of marketing expenses to banks for attracting remittances. Pre-departure briefings: Remittance
The joint initiative focuses on two main objectives, i.e., to facilitate and support faster, cheaper, more convenient and efficient flow of remittances through formal channels, and create investment opportunities in Pakistan for overseas Pakistanis. briefing sessions at Protectorate offices offered for capturing potential overseas Pakistanis and for opening bank accounts before leaving the country. The PRI has successfully curbed unofficial channels of transactions, namely the hundi or hawala system, adding further security and improved rural payout networks with reliable modes of money ransfer. Its actions also had a dramatic impact in the increase of formal remittance flows from countries across the globe to Pakistan.
TRANSFER MONEY TO PAKISTAN INSTANTLY Instant fund transfer to all banks in Pakistan No remittance fees Competitive exchange rates Send money through a quick two-step process: • Register a beneficiary • Transfer money immediately
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