Eyeing 10pc hike in remittances, ECC boosts incentives scheme

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday revised the remittance incentive scheme on remittances.

The two schemes have been revised upward offering incentives for banks and exchange companies.

The ECC considered a summary of the Ministry of Communications regarding the “Execution of Framework Agreement between China and Pakistan on Realignment of KKH (Thakot-Raikot) under CPEC”. After detailed discussions and deliberations, and to comply with the code requirements, the ECC allowed the Ministry of Communications/ National Highway Authority to proceed with provisions of the Framework Agreement per provisions of rule-5 of Public Procurement Rules, 2004 for procurement of construction of realignment of KKH (Thakot Raikot Section 241 KM) project under CPEC (Phase-II).

The ECC considered another summary of the Ministry of Communications regarding the “Chakdara-Timergara, 39-km Road Project (N-45)”. It was discussed that Rule-5 of Public Procurement Rules-2004 PPRA can be invoked after the authorisation of ECC and consultations with relevant stakeholders. Foregoing in view, the ECC authorised the Ministry of Communications/National Highway Authority to proceed under Public Procurement Rule-5 in Procurement of Consultancy Services required for Section-1 (Chakdara-Timergara, 39-km) under Chakdara-Chitral Road Project (N-45).

Lastly, a summary of the Finance Division regarding “Proposal for Revision in Home Remittances Incentive Schemes” was also considered. After detailed discussion and deliberation, as per the proposal of SBP, the ECC approved the following revisions to the two remittance incentive schemes:

1. Reimbursement of Telegraphic Transfer (TT) Charges Scheme: a. The flat reimbursement rate of SAR 30 per eligible transaction will be divided into fixed (SAR 20) and variable (SAR 08-15) components. b. The variable component will be linked to the incremental growth in remittances. c. Banks will receive higher rewards based on their performance in increasing remittance inflows.

*2. Incentive Scheme for Exchange Companies (ECS): a. The base rate for the fixed component will be increased from PKR 1 to PKR 2 per USD surrendered. b. The variable component will be linked to the incremental growth in remittances. c. ECSs will receive higher rewards based on their performance in mobilising remittances. These revisions are expected to further incentivise banks and exchange companies to increase remittance inflows, thereby boosting the country’s foreign exchange reserves.