Pakistan remittance charges UAE have come under focus after the State Bank of Pakistan (SBP) ended two long-running incentive schemes for banks and remittance providers. While the move has raised concerns among overseas Pakistanis about the cost of sending money home, the central bank says eligible remittance transfers will continue to remain free for both senders and recipients despite the policy change.
The policy, which came into effect on July 1, 2026, ends government-funded reimbursements previously paid to financial institutions for facilitating overseas remittance transactions. However, the SBP has instructed participating institutions to continue offering eligible remittance services free of charge for both senders and recipients.
What Has the State Bank of Pakistan Changed?
The SBP announced the withdrawal of two programmes through separate circulars issued on July 2:
- Telegraphic Transfer Charges Incentive Scheme (TTCIS)
- Sohni Dharti Remittance Programme (SDRP)
Under the TTCIS, banks, exchange companies and authorised dealers received reimbursements from the central bank for processing eligible remittance transfers. This enabled overseas Pakistanis to send money home without paying transfer fees, while recipients also received funds without deductions.
With the scheme now discontinued, those reimbursements have ended.
The SBP, however, made it clear that participating institutions must continue implementing the programme’s key features, ensuring that eligible home remittance transactions remain free for both the sender and the beneficiary.
Meanwhile, the Sohni Dharti Remittance Programme, which rewarded overseas Pakistanis with loyalty points for using formal remittance channels, has also been discontinued.
Will Customers Have to Pay More?
For most overseas Pakistanis, the answer is no.
The SBP has specifically instructed banks and exchange companies to continue offering eligible remittance services without charging customers.
Ali Al Najjar, Chief Executive Officer of Al Ansari Exchange, said the company does not expect the policy change to affect remittance costs or customer experience.
“We do not currently anticipate any impact on customers’ remittance costs,” Al Najjar said.
He added that reports indicate eligible home remittance transactions are expected to remain free for both senders and beneficiaries.
According to Al Ansari Exchange, Pakistan remains one of its largest remittance corridors, and the latest policy mainly affects incentive arrangements within Pakistan’s banking sector rather than cross-border money transfers.
Why Did the SBP End These Schemes?
The State Bank did not provide a detailed explanation for discontinuing the programmes.
However, according to Pakistan’s Dawn newspaper, banking industry sources said the cost of maintaining the incentive schemes had risen sharply as remittance inflows reached record highs over the past few years.
The report also said the growing expenditure came under scrutiny during discussions with the International Monetary Fund (IMF), which questioned continued government incentive payments as remittance volumes continued to increase.
Rather than ending free remittance services, the SBP has removed the reimbursement mechanism that compensated banks and exchange companies for processing eligible transfers.
Banks Concerned About Rising Costs
While customers are unlikely to notice any immediate difference, banks have expressed concern about absorbing costs that were previously reimbursed by the central bank.
Pakistan Banks Association (PBA) Chairman and Bank of Punjab CEO Zafar Masud said banks are now consulting on how future remittance costs will be managed.
Similarly, Bank Alfalah CEO Atif Bajwa warned that the decision would reduce banks’ profitability because participating institutions will now bear expenses previously covered under the incentive scheme.
Despite these concerns, the PBA has said banks remain committed to supporting overseas remittance flows.
Experts See Limited Impact on Remittances
Many banking experts believe the policy change is unlikely to significantly reduce remittance inflows.
According to analysts quoted by Dawn, the Telegraphic Transfer Charges Incentive Scheme had become less relevant as advances in digital banking have substantially reduced the cost of processing international money transfers.
Experts also point out that Pakistan’s banking sector remains one of the country’s most profitable industries.
Banks reportedly earned around Rs640 billion during calendar year 2025, while profits continued to grow during the first quarter of 2026.
In addition, incentives available under the Pakistan Remittance Initiative (PRI) remain unchanged. Banks will continue receiving incentives linked to the volume of remittances they process through formal channels.
What Happens to Sohni Dharti Reward Points?
The SBP has introduced a one-year transition period for overseas Pakistanis who earned reward points under the Sohni Dharti Remittance Programme.
Points accumulated on eligible remittances processed up to June 30, 2026, can still be redeemed until June 30, 2027.
After that date, the programme will officially close.
Will Remittances Continue to Grow?
The State Bank remains optimistic despite ending the two incentive schemes.
SBP Governor Jameel Ahmad has said workers’ remittances are expected to continue growing during FY2027, driven by overseas Pakistanis and sustained labour migration, particularly to Gulf countries.
Al Ansari Exchange also expects customers to continue using trusted remittance channels.
“We anticipate overseas Pakistanis will continue sending money home to support their families and meet regular financial commitments, with established channels, including our digital platforms, remaining available,” Al Najjar said.
Pakistan received nearly $40 billion in workers’ remittances during FY2025, making overseas transfers one of the country’s most important sources of foreign exchange.
Experts expect remittance inflows to rise further to between $41 billion and $42 billion during FY2026, supported by continued overseas employment and growing use of formal banking and exchange company channels.
For Pakistanis living in the UAE, the latest policy mainly changes how banks are compensated—not how customers send money home. As things stand, eligible remittance transfers are expected to remain free, ensuring overseas workers can continue supporting their families without additional transfer charges.
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