23 Oct 2023
Did you know that Pakistan is one of the top receivers of global remittances? Given that inflows average roughly $2.2-2.3 billion in each of the five remaining months, remittance inflows may total around $27-28 billion in the current fiscal year 2023.
Every money transfer to Pakistan plays a vital role in boosting the Pakistani economy. Millions of dollars are remitted each year, which adds up to 8.99% of the annual GDP. The importance of central banks in regulating these transfers should not be underestimated, as they play a critical role in ensuring that they are safe and secure, and by local laws and regulations.
Central banks are in charge of regulating financial systems in their countries. They play an essential role in promoting economic stability by monitoring the availability of money and credit, setting interest rates, and regulating the financial industry.
Central banks play a vital role in money transfers as well, particularly in the prevention of money laundering and terrorism financing.
To do this, central banks have put in place a variety of regulatory frameworks to monitor and manage money flows. For example, in Pakistan, the State Bank of Pakistan (SBP) has introduced anti-money laundering (AML) and counter-terrorism financing (CFT) policies to prevent financial crimes. Financial institutions are encouraged to follow regulations to do due diligence on their customers and monitor transactions for any suspicious activity.
Pakistan is one of the world's leading beneficiaries of remittances. According to the World Bank, Pakistan received 30 USD billion in remittances in 2022, making it the world's sixth-largest beneficiary of remittances. Remittances are critical to the country's economy since they help to replenish foreign exchange reserves and boost household consumption.
Despite the value of remittances, Pakistan confronts difficulties in receiving them. One of the issues is the high cost of remittances, which might prevent people from sending money through legitimate channels. Furthermore, the country suffers financial inclusion problems, which can make it difficult for residents in distant locations to obtain official financial services.
To address Pakistan's difficulties in receiving remittances, the SBP has established several regulations to encourage the use of legitimate channels so that expats can send money to Pakistan easily.
The Pakistan Remittance Initiative (PRI) is one of these strategies, which attempts to promote the use of formal channels for remittances and minimize the cost of remittances.
The PRI has been successful in boosting the usage of formal remittance channels, with the share of remittances received through formal channels increasing from 33% in 2009 to more than 90% in 2020. Furthermore, the SBP has adopted financial inclusion initiatives, including the National Financial Inclusion Strategy, which aims to enhance access to financial services.
ACE Money Transfer is a digital money transfer firm established in the United Kingdom that provides a quick, secure, and reliable way to send remittances to Pakistan. The company has a substantial presence in the global remittance sector and has played an important role in boosting the usage of professional transfer channels.
ACE Money Transfer's focus on delivering reasonable and accessible money transfer services is one of the reasons for its success in the Pakistani industry. The company provides cheap currency rates and inexpensive transfer costs, making it an appealing choice for Pakistanis living in other countries. Furthermore, the organization has a large network of partners throughout Pakistan, allowing it to provide quick cash pickup services all around the country.
As a Pakistani expat, you can easily use ACE Money Transfer to send remittances to your loved ones in Pakistan. First, you need to create an account on the ACE Money Transfer website or mobile app, providing your personal and payment details. Once your account is verified, you can select Pakistan as the destination country and enter the recipient's details, such as name, address, and phone number. Then, choose the amount you want to send and the payment method, such as a bank transfer, credit card, or debit card. Finally, review the transaction details and confirm the transfer. ACE Money Transfer offers competitive exchange rates and low transfer fees, and the funds are usually credited to the recipient's account within a few hours or up to 2 business days, depending on the payment method and bank processing
Central banks play an important role in guaranteeing the safety, security, and compliance of money transfers to Pakistan. The SBP has developed several initiatives to encourage the use of formal channels, which has seen great results in the previous years as remittance inflows to Pakistan have substantially increased.
Never trust illegal channels to send remittances, and always stick to safe, secure, and regulated channels such as ACE. Sign up on ACE for free to send money to Pakistan at unbelievable rates.
Answer: The central bank of Pakistan, the State Bank of Pakistan (SBP), plays a crucial role in regulating and overseeing the money transfer sector. It ensures that money transfer services comply with regulatory standards, helping to maintain financial stability and security.
Answer: The central bank enforces anti-money laundering (AML) and know-your-customer (KYC) regulations, monitors financial institutions and money transfer operators for compliance, and investigates and takes action against any suspicious or unlawful transactions.
Answer: The central bank, SBP, does influence exchange rates through its monetary policy and interventions in the foreign exchange market. However, exchange rates are also influenced by various economic factors, including supply and demand for foreign currency.
Answer: Yes, the central bank, SBP, has regulations regarding the maximum amount of money that can be transferred to Pakistan, especially concerning remittances. These limits can change and are subject to specific conditions.
Answer: To comply with central bank regulations, ensure that you use legitimate, licensed money transfer services, complete all necessary documentation, provide accurate recipient information, and adhere to the established limits and guidelines for remittances to Pakistan.