A meeting of the Senate Standing Committee on Finance and Revenue was held under the chairmanship of Senator Saleem Mandviwalla at Parliament House today, where the committee took stock of the prevalent divergence of remittances into informal (undocumented) channels.

Despite insistence from committee members, Governor State Bank of Pakistan (SBP) Jameel Ahmad refrained from disclosing the transaction volume of foreign exchange through Hawala/Hundi markets and said inflows sourced through this channel are not part of the official record for remittances. He remarked that remittances through the channel are illegal.

Chairman Committee Salim Mandviwala informed the committee that up to $8 billion per year is reportedly coming to Pakistan from the Hundi market. Members opined that the informal market will gain traction if SBP tightens measures to confine the movement of foreign currency to the documented channel.

The SBP governor defended the stringent measures and recalled that remittances of $27 billion were recorded in the last financial year. He said the goal is to receive all remittances through the banking channel. He mentioned that the Arab countries are linked by a cross-border payment system, which Pakistan intends to join.

Ahmad further said that remittance inflows to Pakistan decreased in the previous financial year due to inflation in Western countries, but expressed hope that the situation will improve in the coming months.

Source: Pro Pakistani