Rs120 billion Pakistan Remittance Initiative subsidy curtailed due to fiscal constraints, SBP tells Senate panel

Profit reported that banks will now absorb the costs of the Pakistan Remittance Initiative after the government curtailed its subsidy. The State Bank of Pakistan told the Senate Standing Committee on Finance and Revenue that Rs120 billion in subsidies had reached banks, but support was cut in the previous year. Fiscal constraints meant the government could not keep funding the scheme through this year's budget, so banks decided to use their own resources to keep remittances flowing.

Members praised the scheme's continuation and will hear from selected banks at the next sitting about their performance in bringing in remittances. Lawmakers also examined the 1999 F.E. Circular which deals with safeguarding deposits held by foreign investors in Pakistan. SBP Deputy Governor Dr Inayat Hussain said banks had been told to shield foreign investors' funds, and SBP records showed no such case pending. The committee, however, raised concern over reports of unresolved foreign investor cases and requested a detailed statement on each one, including the causes of any delays.

Separately, Senator Talha Mehmood warned that some firms reporting losses may allegedly use fraud to mislead investors about their finances. He cautioned that a collapse or departure of such businesses might leave shareholders and the public out of pocket. He urged the government and regulators to examine these firms closely and act quickly against fraud to protect public investments.