ISLAMABAD – Experts have identified black market trade and unregulated money operators like hawala/hundi as significant contributors to Pakistan’s economic problems. They stress the need for the government to ensure a sustained campaign against all such illegal remittance channels.
Remittances have become an essential source of income for Pakistani households, accounting for a remarkable 10% of the country’s GDP, according to Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan (ECAP). Like 132 low-to-middle-income countries (LMICs) worldwide, Pakistan’s economy also faces challenges to rising, and the remittances coming to Pakistan from overseas can serve as a vibrant thread, he said.
However, black-market trade and unregulated money operators like hawala/hundi pose a significant threat to this lifeline, which could lead to Pakistan’s economic downfall, he lamented.
Paracha argues that informal channels are limiting the potential of remittances due to their lack of regulation. While they may be convenient for senders, these channels expose recipients to high fees, exchange rate fluctuations, and the risk of fraud. To realize the full benefit of remittances, it is essential to promote formal channels like banks and money transfer operators, which offer greater transparency, security, and convenience, ensuring that hard-earned funds reach their intended beneficiaries without undue burden.
CEO of ACE Money Transfer, Rashid Ashraf, commented on the issue of black-market forex trade, stating that many Pakistani diasporas resort to informal channels like hawala/hundi to avoid taxes and formal procedures they consider to be complex and tricky. Unfortunately, the money flowing through unregulated channels often supports various crimes and terror financing, jeopardizing the hard-earned money of Pakistani expats.
Ace Money Transfer has collaborated with Bank Alfalah to provide a seamless, secure, and swift financial service for expatriates. Together, they aim to counteract the decline in remittance inflows to Pakistan. Rashid stated that the partnership is a strategic move that will revolutionize the remittance landscape in Pakistan. He also added that the collaboration with Bank Alfalah signifies their commitment to offering expatriates convenient financial services. The partnership empowers customers and contributes to the economic prosperity of Pakistan by enhancing the convenience and reach of remittance services across the country.
The collaboration between Ace Money Transfer and Bank Alfalah offers Pakistani expats more than just remittance services. It provides a broader scope of service offerings, including quick airtime top-ups, utility bill payments, and other financial transactions. The Ace Money Transfer mobile app integrates these features, aiming to streamline financial transactions for the Pakistani diaspora.
Atif Bajwa, President and CEO of Bank Alfalah, said that the partnership with Ace Money Transfer is a pivotal step in enhancing the ease of sending international remittances to Pakistan. He also added that the partnership offers an unparalleled blend of convenience and reliability to the Pakistani diaspora. Bank Alfalah aims to encourage overseas Pakistanis worldwide to extend their helping hands to Pakistan’s foreign reserves in the form of remittances sent through regulated channels.
Mr Bajwa also said that Pakistanis living in foreign countries must support the strategies implemented to curb the black-market remittance flows to aid Pakistan’s foreign reserves. By opting for regulated channels of remittances, such as Ace Money Transfer and Bank Alfalah, the Pakistani diaspora can push the country out of economic turbulence and contribute to its economic inflow crucial to the nation’s stability.
