Pakistan tries to formalise system

Pakistan has taken a series of measures to formalise the informal funds transfer system since July, 2002, thus ensuring higher remittances through formal channels.

The establishment of exchange companies since July, 2002, across the country has helped in speedier and efficient remittances from overseas, said M.R. Mekhari, director, Exchange Policy Department, State Bank of Pakistan.

"Banks and post offices are cooperating in the remittances from overseas along with the exchange companies," he said, adding that overseas Pakistanis are now remitting their money through formal channels.

The inflow through formal channels in 1998 totalled $98 million but that figure increased to $2.38 billion in 2002 and soared higher to reach $4.23 billion last year.

"Quick delivery, narrowing of the differential exchange rates between formal and informal systems have attracted overseas Pakistanis to use the formal systems. Also, if there is a delay in delivery, banks have to compensate the sender," he said.