By Iqra Waheed ISLAMABAD, Feb 24 (INP-WealthPK): Remittances increased to a new record of $18 billion in the first seven months of financial year 2021-22, rising by 9.1% compared to the same period of the preceding year. Workers' remittances remained above $2 billion for 20 consecutive months in January 2022, $2.14 billion to be exact, according to WealthPK. The main contributors of remittances are Saudi Arabia, the United States, United Arab Emirates, and the UK, as shown by the State Bank of Pakistan (SBP) data. Saudi Arabia contributed the highest share in remittances as inflows from the Kingdom increased by 2% in the FY2022. A huge Pakistani workforce of 2.7 million is employed in Saudi Arabia. Total remittances from the Kingdom were $540 million in January 2022. Money sent by overseas Pakistanis from the United Kingdom was $320 million; the UAE migrant workforce contributed $374 million and those in the US sent $208 million to their country in the month. According to WealthPK, remittances form a substantial part of the country’s foreign exchange reserves and help in lowering the current account deficit. The increase in remittances owes to various incentives the government has offered to the 9 million overseas Pakistanis. The Covid-19 pandemic has also contributed to the uptick in in remittances’ inflow as air travels were limited and most of the financial transfers were done through the official channels. According to the SBP data, $3,382 million was received in January 2022 through the Roshan Digital Account as compared to $3,160 million in December 2021, showing an increase of 7.03%. Of the total $3,382 million received through RDAs, $1,041 million was invested in Conventional Naya Pakistan certificates, and $34 million in the stock exchange. Percentage wise, about 69% of the funds are invested in Naya Pakistan Certificates, 1% in stocks and 30% in others. In January 2022, 342,611 accounts were opened under RDA compared to the 322,463 accounts opened in December 2021. The SBP last year initiated the RDA initiative for overseas Pakistanis. It permits non-resident Pakistanis to open their accounts in Pakistan and do banking transactions and other investments in their country of origin. Through RDAs, overseas Pakistanis can invest in automobiles, housing and government certificates. They can also have the facility of free-of-cost bank transactions. Besides, they can make contributions to charitable organisations. For individuals working abroad, the government also initiated ‘Sohni Dharti Remittance Programme’ (SDRP). It is a point-based loyalty programme for remitters working abroad, who send their money to their home country through exchange businesses or banking channels. It tracks all the transactions by the remitters and also gives them reward points. These points can be redeemed by availing services at public sector entities. The services offered on redemption include international tickets for PIA, duty payment of mobiles, extra luggage payments, imported vehicles duties, vehicles purchase, premium on insurance of State Life, renewal of CNIC/NICOP from Nadra, school fees and purchases from utility stores. Under the SDRP, different categories exist, on which different percentages of points are awarded. These categories include green, gold and platinum. In green card category, an individual sending remittances of $10,000 a year is rewarded 1% points earning. In gold card category, individuals sending remittances between $10,000 to $30,000 are counted and awarded 1.25% points earnings. The platinum category includes those sending remittances of more than $30,000 with award of 1.50% earnings. Reward Points Earning (% of Remittance Amount)

Source: SBP/WealthPKResearch