KARACHI(National Times)- The State Bank has abolished the incentives paid to banks for increasing remittances, after the amount grew to a level that came under the IMF’s radar.
The SBP issued a circular on Thursday announcing that the Sohni Dharti Remittance Programme (SDRP) had been discontinued.
“No further reward points under SDRP will be awarded from the start of FY27, from July 1, 2026,” the SBP said.
Accordingly, eligible transactions processed up to June 30, 2026, will be reported to 1LINK for the awarding of points under the scheme.
Reward points already awarded and accumulated till June 30, 2026, will remain redeemable till the end of FY27, or June 30, 2027.
“Thereafter, SDRP will become completely non-functional effective from July 1, 2027,” the SBP said.
Meanwhile, the State Bank also discontinued the Telegraphic Transfer Charges Incentive Scheme, another incentive for banks.
“It is informed that the TTCIS is discontinued with effect from July 1, 2026. However, the Authorised Dealers will continue to implement the scheme at their end while preserving its key features,” said another circular.
The SBP said the Authorised Dealers would ensure that home remittance transactions meeting the criteria laid down in the circular remained free of cost for senders and beneficiaries of home remittances.
Sources in the financial sector said the amount under the TTCIS had increased to Rs100bn to Rs120bn each year. They said that despite the availability of newer money transfer technologies, the old TTCIS had continued.
Sources said the amount involved was significant and was not linked to performance, prompting the IMF to take notice of the scheme.
Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan appreciated the move but said the incentive scheme could have continued with a lower margin on remittance transactions.
However, another currency expert and trader said the State Bank had not abolished the Pakistan Remittance Initiative (PRI), through which banks earned a major share of profits on remittances.
It was not officially known how much banks earned on remittances under the PRI, but a senior banker said one large bank had a bill of Rs30bn this year. This reflected the volume of incentives being given to banks for attracting foreign exchange.
With rising labour exports, Pakistan has recorded significant growth in remittances over the last three years. Remittances reached $40bn in FY25 and may stand at around $41bn to $42bn in FY26.
“The growth in remittances is almost the same in all countries exporting labour. Pakistan expects more since labour exports continued despite the war in the Gulf region,” the currency trader said.
