ISLAMABAD: Experts have urged the government to take urgent steps to curb the forex trade black market as Pakistan now cannot afford to leave billions of dollars in the shadow of illegal inflow of money.
“The time is to act now. Pakistan cannot afford to leave billions of dollars in the shadows of informality. By taking decisive steps and forging strong partnerships, the country can create a win-win situation, benefiting both overseas Pakistanis and the nation as a whole,” said General Secretary of the Exchange Companies Association of Pakistan (ECAP), Zafar Paracha.
The government has recently moved to tackle the illegal flow of money through a country-wide crackdown, bringing in the much-needed recovery of a massive $900+ million. “This initiative seizing social evils like hawala/hundi aims to revitalise Pakistan’s foreign reserves,” Paracha said.
“Furthermore, promoting financial literacy and awareness among both senders and receivers of remittances is essential. Educating individuals about the benefits of formal channels, such as access to credit, insurance, and social security benefits, can encourage them to switch,” he stressed.
For decades, remittances have been a lifeline for Pakistan’s economy, a steady flow of hard-earned money sent by millions of overseas workers, Paracha said. “These funds, estimated at over $31 billion in 2022, have fuelled consumption, propped up real estate, and provided crucial support to families back home,” he continued.
“Yet a significant portion of these inflows moves through the informal sector, evading taxes and hindering long-term economic development. This brings us to the question; can Pakistan lure this money back into the formal fold and unlock its full potential? To find the answer we must get to the root cause of why the informal channel is used in the first place,” he added.
Commenting on the issue of black-market forex trade, Rashid Ashraf, CEO of ACE Money Transfer, said most Pakistani diasporas turn towards informal channels like hawala/hundi so as to avoid taxes and formal procedures, which they wrongly consider to be complex and tricky. “Consequently, the money that flows through unregulated channels assists various crimes and terror financing while putting Pakistani expats’ hard-earned money at stake,” he mentioned.
Rashid Ashraf said that in order to reinforce declining remittance inflows to Pakistan from abroad, ACE Money Transfer has entered into collaboration with Bank Alfalah through which expatriates will be provided with seamless, secure, and swift financial services.
“Our partnership with Bank Alfalah is a strategic move that’s poised to reinforce the declining remittance inflows to Pakistan from abroad,” Rashid Ashraf said, adding that the collaboration with Bank Alfalah will revolutionise the remittance landscape in Pakistan.
“This partnership signifies our shared commitment to providing expatriates with seamless, secure, and swift financial services. Together, we are dedicated to empowering our customers and contributing to the economic prosperity of Pakistan by enhancing the convenience and reach of remittance services across the country,” he said.
“Pakistani expats can pay utility bills and send money home in the form of quick airtime top-ups to their loved ones, enhancing the user experience by integrating more convenient features into the remittance process by using ACE Money Transfer mobile app. This indicates a broader scope of service offerings beyond mere remittances, aiming to streamline financial transactions for the Pakistani diaspora,” he concluded.
President and CEO of Bank Alfalah, Atif Bajwa, said the partnership with ACE Money Transfer has proven to be a pivotal step in enhancing the ease of sending international remittances to Pakistan as well as offering an unparalleled blend of convenience and reliability to the Pakistani diaspora.
“We hope to see positive results of our joint campaign with ACE Money Transfer to encourage overseas Pakistanis worldwide to extend their helping hands to Pakistan’s foreign reserves in the form of remittances sent through regulated channels,” he further said.
“Bank Alfalah, through its strategic alliance with ACE Money Transfer, can actively contribute to the economic inflow crucial to the nation’s stability. By integrating their offerings beyond mere transactional services, Bank Alfalah attempts to facilitate financial transfers and also enriches the remittance experience,” he said.
Mr Bajwa said Pakistanis living in foreign countries need to extend their support aligned with the strategies being implemented in the country to curb the black-market remittance flows so as to aid Pakistan’s foreign reserves.
“By opting for regulated channels of remittances, of which ACE Money Transfer and Bank Alfalah are an example, the Pakistani diaspora can push the country out of the economic turbulence,” he concluded.
