In the first four months of the current fiscal year, home remittances shot up 26.5 per cent to $9.43 billion from $7.45bn in the same period of last year, according to the State Bank of Pakistan (SBP).
This huge growth in remittances is largely due to a smart rewriting of rules governing foreign currency value accounts or FCVAs. The SBP had rewritten those rules in the first week of August. Later on, the new set of rules created room for the launch of Roshan Digital Accounts or RDAs for overseas Pakistanis.
On Aug 5, the central bank advised banks to start opening exclusive FCVAs for (a) a non-resident Pakistani individual and (b) a resident Pakistani individual who has declared overseas assets. On the same day, the SBP also asked banks to begin the reclassification of the rupee value accounts of non-resident Pakistanis into the following three categories: (a) non-resident rupee account — repatriable (b) non-resident rupee account — non-Repatriable and (c) rupee value accounts — for non-resident Pakistanis only.
The basic purpose for this exercise was to ensure stricter compliance of the anti-money laundering counter–financial terrorism regime and to make a novel experiment on how best expatriate Pakistanis can be motivated to send more remittances by offering them different options.