By Ajmal Khan Yousafzai
ISLAMABAD: Secretary Finance Naveed Kamran Baloch has stated that a timely action and coordinated efforts by the Government of Pakistan and the country’s banks helped restrict the adverse impacts of COVID-19 on flow of remittances to Pakistan as remittances to Pakistan declined by 4.3% (year- on – year) during March – May 2020 compared with World Bank’s forecast of 23% for 2020.
“The decline in case of Bangladesh is 16.7% during March – May 2020 the only comparable regional data available,†he said while addressing a Webinar arranged by DFID-UKAid to mark the Call to Action and the International Day of Family Remittances Action.
Mr. Naveed Kamran Baloch informed the participants that the initial assessment in Pakistan suggested a sharp decline in remittances from April 2020 onwards due to COVID-19 pandemic.
However, the government adopted timely measures to mitigate these adverse impacts by asking the banks to conduct aggressive awareness campaigns to inform the senders and recipient of remittances about available digital/online channels for sending and receiving remittances. The banks were also asked to conduct similar campaigns with their overseas correspondents and further advised to ensure availability of cash in remittance rich areas to cater to the needs of recipient of cash remittances.
The Secretary Finance explained that government instructed the banks to rationalize’ compliance checks with respect to both recipient and sender to ensure swift delivery of remittances. The banks were also requested to promote remittances through different marketing activities and incentive schemes (through gifts and lucky draws etc); and enhance their limit for cash over counter. The central bank’s team of experts on AML/CFT communicated the message and explained true spirit of AML/CFT regime to banks.
The Secretary said that in response to the measures suggested by the government, the banks augmented their efforts through this period by enhancing their marketing efforts through a record number of TV commercials of individual banks and a joint TV commercial by 6 large banks aired on domestic TV Channels and their international transmissions during May/June 2020 with particular focus on awareness regarding digital channels for sending and receiving payments.
Mr. Naveed Kamran Baloch was of the opinion that an active support of the Government of Pakistan to promote remittances proved a shock absorber during COVID-19. He said the Government of Pakistan also amended two of the schemes to accommodate small remitters through expanding the scope of free send model and broadening the scope of marketing incentive scheme.
It is notable that Bangladesh authorities also modified their 2% additional cash incentive scheme to encourage remittances through formal channels. The threshold of remittance transaction without documentary evidence has been increased from USD 1500 to USD 5000.
The Secretary noted that it was not surprising that COVID-19 has been reshaping all the businesses particularly financial services. Our data suggests that banks with automated processing systems, mobile wallets and direct account credit facility with large global money transfer operators, registered strong positive growths in remittances as against declines in remittance by banks without these products and automated processes.
