Pakistani banks are expected to pay around $256 million to foreign banks during the current fiscal year for processing workers’ remittances after the government discontinued its financial support scheme.
The development was shared with the Senate Standing Committee on Finance on Tuesday, which was informed that local banks pay charges to overseas banks for receiving 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 told the committee that the government had provided Rs. 124 billion in FY2025 and another Rs. 72 billion in the following fiscal year under the remittance-related financial scheme.
However, the government discontinued the scheme effective July 2026 and allocated no funds for it in the current fiscal year.
As a result, Pakistani banks will now have to bear the charges payable to foreign banks themselves.
The central bank official warned that if banks do not absorb the additional costs, they could eventually pass the charges on to people sending money to Pakistan.
The committee was specifically informed that banks are expected to pay approximately $256 million in remittance-related charges during FY27.
The additional cost could therefore affect the overall expense of sending money to Pakistan if banks decide to recover the charges from customers.
Workers’ remittances remain a major source of foreign exchange for Pakistan and play an important role in supporting the country’s external account.
The government’s decision to end the financial support scheme means local banks will now have to manage a significant portion of the cost associated with receiving remittances from overseas.
The issue is expected to remain important for policymakers as Pakistan seeks to maintain strong remittance inflows while keeping the cost of sending money to the country manageable.
