Remittances lost in transfer, MGI, WU cash in

Flaying the exchange rate set by the State Bank of Pakistan (SBP) for interbank market, Money Gram International (MGI) and Western Union (WU), reputed money transfer companies, have been found ‘measuring short’ on the monetary remittances sent by Pakistanis living in the United Stated (US) and United Kingdom (UK) to their homeland.

Going against the central bank rules, the money transfer companies have been transferring less than the due amount, per the SBP forex rates, to the Pakistani accounts.

“MGI charges extra amount of $9.50 per transaction from USA but gives exchange rates lower by Rs 1.25 to Rs 1.50 with reference to the rates set by SBP for local banks,” said an MGI customer in Karachi.

MoneyGram is a money transfer company based in the USA with headquarters in Dallas, Texas and most of the Pakistanis people living in USA use its services to transfer their money to their beloved in Pakistan.

The SBP through a notification has directed all the money transfer companies to send their remittances through the banking channels to stop the money laundering in Pakistan. Earlier, these money transfer companies were sending this amount through open markets with people getting higher rates from the interbank market; up by Rs 2.

“The relatives of foreign citizens suffer a loss between Rs 3.50 and Rs 4.50 per dollar through banking channels,” a dealer of an open currency market informed.

On investigation, a banker of the Bank Alfalah in Karachi showed a real amount, which the MGI operator in Orlando, Florida has sent. The amount of the exchange rate was calculated less Rs 1.25 per dollar set by the State Bank. In Pakistan, the MGI and the Western Union through the SBP have made agreement with some local banks who delivered the amounts to customers in Pakistan.

Suppose, if someone sends an amount of $500 and pays extra charges or fee of $9.50 on his transaction, so why it is giving the exchange rate set by the SBP for local banks. “MGI and the Western Union are not following the rules and regulation of the SBP and why these companies pay less amount,” the customer asked.

On further investigation, it reveals that such a big company of money transfer works through Wall-Mart and other small shops in different US states and it did not have its own branches. The customers go to the selected shops or the Wall-Mart and send their money through them to Pakistan without any documentation.

“If you have a complaint about the rates, you have to call MGI as the said company has given this rate for today and we cannot help you,” an Orlando’s Wall Mart official said. When money sender contacted at the given number of MGI, a lady asked them to her a written complaint.

A banker of Bank AlFalah Ltd said that they delivered the same amount to the customers, which was mentioned on the website of MGI and they received these transactions through the SBP. “The MGI should pay the real exchange rates which the SBP has mentioned,” the banker said.

The bankers, however, are unaware about the extra charges on transactions. Another complaint against the Pakistani customers is the delay of payments as the Pakistani banks release these amounts after 36 hours or more. According to MGI claim this amount would be received in 30-60 minutes.