Pakistan Revises Remittance Incentives for Banks as UAE Expats Retain Free Transfers

The State Bank of Pakistan (SBP) has updated its incentive structure for financial institutions handling inward remittances, a move that clarifies the cost of sending money for the 1.7 million Pakistani expats living in the UAE. While the government has ended certain fixed marketing subsidies for banks and exchange houses, the core policy allowing individual expats to send money for free through legal channels remains in effect. Under current regulations, transfers of $100 or more (approximately AED 367) through authorized banks and exchange houses do not incur transaction fees for the sender. This "Free Remittance" policy is designed to discourage the use of informal "Hundi" or "Hawala" systems. For amounts below $100, exchange houses in the UAE may still charge a nominal service fee, typically ranging from AED 15 to AED 25, depending on the provider. Changes to Institutional Incentives The recent policy shift targets the "Incentive Scheme for Marketing of Remittances." Previously, the Pakistani government provided fixed cash incentives to banks and exchange houses to promote legal channels. The SBP has now transitioned to a performance-based model. Banks will receive higher…