Rs120bn PRI subsidy ends as banks take over costs …
Islamabad: The government has stopped providing the Pakistan Remittance Initiative subsidy, which reached Rs120 billion, saying the country’s financial difficulties make it impossible to continue the support under the current budget. Banks have agreed to absorb the related costs themselves to keep overseas Pakistanis sending money through official channels.
The development puts the spotlight on the future of Pakistan’s remittance system, which depends heavily on money sent home by Pakistanis working abroad. The government had previously used subsidies to help banks facilitate these transfers, but curtailed that support last year.
The Governor of the State Bank of Pakistan informed the Senate Standing Committee on Finance and Revenue that the government had initially provided subsidies to banks under the Pakistan Remittance Initiative to facilitate remittances from overseas Pakistanis.
The total subsidy provided by the government reached Rs120 billion. However, the financial pressure on the government has now made it difficult to continue paying this amount. The subsidy could not be continued in the current budget because of prevailing fiscal constraints.
Instead, banks have decided to bear the costs linked to facilitating remittances from their own resources.
The decision means that banks will continue providing the service to overseas Pakistanis even though the government can no longer provide the previous level of financial support.
The Pakistan Remittance Initiative was discussed by the committee during its meeting at Parliament House in Islamabad on August 25, 2026, under the chairmanship of Senator Saleem Mandviwalla.
The committee considered the government’s decision important because remittances sent by Pakistanis living and working abroad are a major source of foreign currency for the country.
The State Bank told the committee that banks decided to continue bearing the associated costs so that the flow of remittances would not be disrupted.
The committee appreciated the banks’ decision but also decided to examine their actual performance.
Selected banks will therefore be invited to the committee’s next meeting to explain their performance and contribution to the remittance sector.
The move comes at a time when the government is facing tight financial conditions and has been forced to reduce or reconsider spending commitments.
The end of the Rs120 billion subsidy raises an important question about how the remittance system will operate in the longer term if banks continue to carry the costs without government support.
For millions of Pakistanis working overseas, remittances are an important way of supporting families at home. These transfers help families pay for everyday needs and also bring foreign currency into Pakistan.
The government’s decision does not mean that the remittance service has stopped. Instead, banks have agreed to continue facilitating transfers while paying the related costs themselves.
The Senate committee has now moved to check whether banks are fulfilling this responsibility effectively and whether overseas Pakistanis are receiving proper services.
The next meeting is expected to provide the committee with a clearer picture of how banks are handling the change after the withdrawal of the government subsidy.
The key issue remains whether banks can continue carrying the financial burden while maintaining an efficient and reliable remittance system for overseas Pakistanis.
The Rs120 billion figure also shows the scale of government support previously used to encourage and facilitate remittances through the formal banking system.
