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A D VERT I S I N G S U P P L EME N T
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
P
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.