LAHORE – Remittances play a vital role in all developing economies and Pakistan is no exception. The cost of remitting money homewards is a matter of great concern for Pakistanis living abroad. A recent study conducted by the World Bank’s Global Remittances Working Group indicates that the United Arab Emirates has the lowest and Singapore has the highest money transfer fees for Pakistani expatriates. The study reveals that the cost related to transmitting money from the UAE is $3.24 or 1.62 percent on an amount equivalent to $200 and $6.23 or 1.25 percent on $500. It illustrates that after the UAE, Australia offers the second most inexpensive money transfer facilities to Pakistani expatriates.
Figures show that average money transfer fee through different Australian banks cost US$24.72 or 12.36 percent on money transfer equivalent to US$200 and US$32.59 or 6.59 percent on US$500. Similarly, if an individual transmits fund through money
transfer operators (MTO) in Australia it will be more economical due to greater competition in the market. Data show that on average, MTOs charge US$6.65 or 3.32 percent on a fund transfer of US$200 and US$10.01 percent or two percent on US$500.
Figures show that Saudi Arabia is another country, which has relatively lower money transfer fees.
Data shows that on average banking institutes in Saudi Arabia charge $8.19 or 4.09 percent on a fund transfer equivalent to $200 and $15.14 or 3.03 percent on $500 equivalent money transfer. At the same time, non-banking MTOs charge a fund transfer fee of $8.28 or 4.14 percent for $200 equivalent money transfer and $14.41 or 2.88 percent for $500. It is also noted that the United Kingdom has relatively lower remittance fees followed by the United States, Norway and Singapore. Figures show that banking channels in the UK have a commission of $6.13 or 3.06 percent on money transfer equivalent to $200 and $9.07 or 1.81 percent on $500.
Study indicates that in contrast to other countries, MTOs in the UK charge higher remittance fee owing to strict rules and a less competitive environment. Data reveals that MTOs in the United Kingdom charge $9.59 or 4.79 percent on money transfer corresponding to $200 and $16.10 or 3.22 percent on $500. In the case of the United States, $200 can be remitted to Pakistan through banking channels after payment of a fee of $35 or 17.50 percent and $24.02 or 4.80 percent on $500. Money transfer operators in the US have lower tariffs for fund transfer to Pakistan. Figures show that MTOs charge $15.49 or 7.75 percent on $200 and $24.02 or 4.80 percent on a remittance of $500.
.Norway is the second most expensive country for Pakistani expatriates in terms of money transfer fees. Data clarifies that in Norway, one has to pay $10.48 or 5.24 percent for money transfer of $200 equivalent and $12.90 or 2.58 percent on $500 fund transfer. Like the United Kingdom, the private sector in Norway has higher money transfer fees. Figures demonstrate that MTO is Norway has an average fee of $20.43 or 10.21 percent for $200 equivalent and $41.16 or 8.23 percent for $500. Despite an efficient financial system, Singapore has the highest fund transfer fees for Pakistani expatriates.
MTOs in Singapore charge $24.73 or 12.37 percent on a money transfer equivalent to $200 and $40.04 or 8.01 percent on $500. Statistics compiled by the UK’s Overseas Development Institute also show that Pakistan is the one of the largest recipients of remittances in the developing world. Figures claim that for many years, official remittances have exceeded either foreign direct investment or official development assistance. Study points outs that in the 1980s, remittances were linked to a rapid decline in poverty levels and in recent decades the level of official remittances has continually increased. The main sources of overseas remittances are the UAE, Saudi Arabia, the UK and the US. State Bank of Pakistan’s latest figures reveals that the country has secured $6.963 billion in term of remittances sent home by overseas Pakistanis.
