Exchange Companies
In a significant policy shift aimed at enhancing formal remittance flows and strengthening foreign exchange reserves, the State Bank of Pakistan (SBP) has officially included exchange companies in the Pakistan Remittance Initiative (PRI) Scheme, which was previously limited to banks.
The move is expected to revolutionize the remittance landscape by expanding access, increasing competition, and curbing the dominance of certain international money transfer operators.
The SBP announced the development through an official circular, marking a strategic step toward facilitating easier, faster, and more transparent inflows of remittances from overseas Pakistanis. The decision has been widely welcomed by industry stakeholders, including the Chairman of the Forex Association of Pakistan, Malik Bostan.
Speaking on the development, Malik Bostan praised the central bank’s decision, predicting that the inclusion of exchange companies under the PRI framework would lead to a dramatic increase in remittance volumes. “This initiative is expected to double the volume of remittances flowing through official channels,” Bostan stated, adding that the decision levels the playing field by equalizing the profit margins on dollar transactions for both banks and exchange companies.
Bostan also highlighted the crucial role exchange companies have played in the past, noting that they deposited nearly $4 billion into the interbank market last year alone. With the PRI expansion, exchange companies are now setting even more ambitious targets.
Bostan expressed confidence that these companies could contribute between $8 to $10 billion to the interbank market over the next 12 months — a move that would significantly bolster Pakistan’s foreign exchange reserves.
One of the key components of the revised PRI scheme is the increase in the minimum remittance threshold. Previously set at $100, the threshold has now been raised to $200. In addition, transactions of $200 or more will now be exempt from sending fees, making it more attractive for overseas Pakistanis to send money home through formal channels.
The inclusion of exchange companies is also expected to break the stronghold of certain international money transfer operators, whose practices have often been criticized for monopolistic behavior and high fees.
By diversifying the channels available for remittances, the SBP aims to promote greater transparency, reduce costs, and encourage the use of legal avenues for money transfers.
This decision aligns with the government’s broader strategy to stabilize the economy, reduce reliance on informal hawala/hundi systems, and build a resilient financial ecosystem.
As Pakistan continues to face foreign exchange challenges, the expansion of the PRI scheme is seen as a timely and transformative measure that could help unlock the full potential of the overseas Pakistani community in supporting the country’s economic growth.
