Pakistani banks are expected to pay around $256 million to foreign banks this fiscal year for processing workers’ remittances after the government ended its financial support scheme, the Senate Standing Committee on Finance was told on Tuesday.
The committee was informed that local banks pay charges to overseas banks to receive remittances sent to Pakistan.
Pakistani banks have historically paid around $800 million annually to foreign banks for remittance-related services.
State Bank of Pakistan Deputy Governor Dr. Inayat Hussain said the government had provided Rs. 124 billion in FY2025 and Rs. 72 billion in the following fiscal year under the remittance-related financial scheme.
The government has discontinued the scheme effective July 2026 and has not allocated funds for it in the current fiscal year. As a result, Pakistani banks will now have to bear the charges payable to overseas banks themselves.
The central bank executive warned that if banks do not absorb the cost, the charges could eventually be passed on to people sending remittances to Pakistan.
The committee was specifically informed that banks are expected to pay around $256 million in such charges during the current fiscal year.
The issue is significant for Pakistan because workers’ remittances remain an important source of foreign exchange for the country.
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