Govt Approves Rs. 30 Billion Grant to Resume Remittance Subsidies

The federal government has approved an initial Rs. 30 billion supplementary grant to restart foreign remittance subsidies under the Pakistan Remittances Initiative (PRI). The decision follows direct orders from Prime Minister Shehbaz Sharif after the Finance Ministry initially refused to fund the scheme, reported Express Tribune. Last year, the Finance Ministry allocated Rs. 87 billion for remittance subsidies, but the State Bank of Pakistan (SBP) submitted claims of Rs. 200 billion, of which Rs. 170 billion was under the Telegraphic Transfer (TT) Charges Scheme. Due to rising costs, the Finance Ministry had asked SBP to fund the scheme, but the SBP said IMF restrictions prohibit subsidy payments. The suspension led to a reported double-digit drop in remittance inflows in early July. In FY25, remittances hit a record $38.3 billion, up 27 percent from the previous year. Exports remained stagnant at $32 billion. The government has also reduced incentives. Effective July 1, 2025, the minimum eligible transaction for rebates doubled to $200, with a flat SAR 20 rebate, down from the previous SAR 20–35 range. Meanwhile, the Exchange Companies Incentive Scheme (ECIS), which gave Rs. 4 per dollar, has been abolished. The SBP has been directed to submit a cost-benefit plan for phasing out subsidies and to merge payment gateways to strengthen formal remittance channels.