Pakistani banks pay around $800mn annually to overseas banks to process and receive remittances sent to the country, a Senate standing committee was informed, as Dunya News reported.
Senator Saleem Mandviwalla said domestic banks incur substantial charges when receiving remittances through overseas banking institutions.
The committee was told banks were expected to pay around $256mn in charges for receiving remittances in the current fiscal year.
The committee chairman said the government had provided banks with PKR120bn ($432mn) in the previous fiscal year to cover such costs, but no funds had been allocated for the current fiscal year.
The deputy governor of the State Bank of Pakistan, however, told the committee that the government had provided PKR124bn in fiscal year 2025 and PKR72bn in the previous fiscal year under the scheme.
He said that, with no allocation made in the current fiscal year, banks would now have to bear the charges payable to overseas banks for receiving remittances.
The government had abolished the financial incentive scheme for remittances from fiscal year 2026-27. The committee expressed concern that rising costs associated with remittance collection could place an additional financial burden on overseas Pakistanis and potentially increase the cost of sending money to the country.
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