The State Bank of Pakistan (SBP) has announced significant reforms to its Telegraphic Transfer (TT) Charges Reimbursement Scheme, set to take effect from July 1, 2025. These revisions mark a strategic shift in how remittance incentives are administered, with new rules aimed at enhancing transparency, increasing formal inflows, and discouraging misuse.
One of the most notable changes is the increase in the minimum eligible remittance amount from $100 to $200. This revised threshold now applies across the board, and only transactions of at least $200—or the equivalent in any other currency—will qualify for TT charge reimbursement. Previously, banks could claim reimbursements for transactions as low as $100.
Another major update is the inclusion of Exchange Companies (ECs) under the TT Charges Reimbursement Scheme for the first time. By bringing ECs into the fold, the SBP aims to widen the formal remittance network and promote non-bank channels as secure conduits for home remittance inflows.
Under the new guidelines, financial institutions (FIs) and their overseas correspondent entities (OCEs) are strictly prohibited from charging any fees or commissions to either the sender or the recipient of a remittance at any point during the transaction. Furthermore, multiple remittances sent by the same individual to the same beneficiary on the same day will be counted as a single transaction. To prevent overuse, the SBP has capped the number of free transactions at five per month for any remitter sending funds to the same beneficiary via the same OCE.
The reimbursement structure has also been standardized, with a flat rate of SAR 20 per eligible transaction. Meanwhile, ECs will be required to surrender 100% of the foreign currency received from inward home remittances to the interbank market in US dollars on the same day. Transactions such as credit card settlements or export proceeds remain outside the scope of this scheme.
In a broader policy shift, the SBP has announced the termination of two existing incentive programs: the “Incentive Scheme for Marketing of Home Remittances” and the “Exchange Companies Incentive Scheme (ECIS),” both of which will also end on July 1, 2025.
To curb exploitation of the TT charges reimbursement facility, the SBP has introduced stringent compliance protocols. OCEs engaging in fraudulent practices—such as splitting transactions to claim excess reimbursements or withholding remittance funds—face the risk of suspension or blacklisting. Financial institutions have been instructed to adopt strong monitoring and auditing systems to detect such violations and act accordingly. Moreover, they are expected to consistently educate their overseas partners on the updated regulations and enforce compliance without compromise.
These reforms underline SBP’s commitment to strengthening the formal remittance ecosystem while ensuring fairness, transparency, and accountability across the entire transaction chain.
