Rs120 billion remittance subsidy curtailed due to fiscal hit

Central bank's deputy governor says banks are now bearing the associated costs of facilitating remittances; lawmakers seek details of pending foreign investment cases and raise concerns over alleged corporate fraud The Senate Standing Committee on Finance and Revenue has reviewed the Pakistan Remittance Initiative (PRI), the protection of foreign investors' funds and concerns over alleged fraudulent practices by companies, deciding to seek further briefings from banks and relevant authorities. According to a news report, the committee was informed by the State Bank of Pakistan (SBP) that the government had initially provided subsidies to banks under the Pakistan Remittance Initiative to facilitate remittances from overseas Pakistanis. The Senate panel was told that Rs120 billion had been provided as subsidies, but the support was curtailed during the previous year. Due to fiscal constraints, the government was unable to continue the subsidy under the current budget. Banks have since decided to bear the associated costs from their own resources to ensure the continued facilitation of remittances, the committee was told. The committee appreciated the continuation of the initiative and decided to invite selected banks to its next meeting to brief members on their performance and contribution to the remittance sector. The meeting also reviewed the F.E. Circular, 1999, concerning the protection of investments and deposits of foreign investors in Pakistan. SBP Deputy Governor Dr Inayat Hussain informed the committee that instructions had been issued to concerned banks to protect foreign investors' funds and that, according to SBP records, no such case was pending with the central bank. However, the committee expressed concern over reports that some cases involving foreign investors might still be unresolved. It sought a detailed statement on any such cases, including their status and the reasons for delays. Separately, Senator Talha Mehmood raised concerns over companies operating in Pakistan that, despite reporting losses, may allegedly engage in fraudulent practices and mislead investors and shareholders about their financial position. He warned that such companies could eventually collapse or leave the country, potentially causing financial losses to shareholders and the public. He called on the government and relevant regulators to scrutinise such companies and take timely action against fraudulent practices to safeguard public investments. The meeting was attended by Senators Sherry Rehman, Muhammad Abdul Qadir, Amir Waliuddin Chishti and Shahzaib Durrani.