DUBAI // A proposed Dh15 service charge for Pakistanis who send money home from exchange bureaus has been scrapped.
The fee was suggested as a way to recoup funds lost by the exchanges who are not receiving their rebates from the Pakistan government.
“In the past month or so we have seen an increase in the amount of rebates that are being paid back by the Pakistan government,” said Syed Faraz Ahmed, the executive director for Multinet Trust Exchange in Dubai. “In fact, in the past few days alone, we have received some rebates.”
Foreign exchanges said the fee idea would be put on hold until the situation was reviewed again in March.
Despite the renewed payments by the Pakistan government, Mr Ahmed said many foreign exchanges were still owed about 11 months of overdue rebates.
“Although we were looking at reviewing the situation in December, things seem to have picked up in the last few weeks,” he said.
“We are happy with things at the moment.
“Obviously, we would like to have the full amount paid back as soon as possible but as long as the frequency is as it is, and maybe increases, that is fine,” he added.
Lower-income Pakistani expatriates living in the UAE who remit US$100 (Dh360) or more back to their homeland would have been hit worst by the service fee.
The disagreement began last summer after some foreign exchanges signed up to the Pakistan Remittance Initiative.
Under the scheme, bureaus agreed not to charge for remittance payments and, in return, the government would give them rebates.
The system was set up to tackle the problem of illegal money transfers.
However, Pakistan fell behind in its rebate payments for a year, meaning exchanges were owed millions of dirhams.
“We will review the situation and see how it is going,” said Mr Ahmed. “We would expect a backlash from customers if the fee was imposed and any decision on the matter would be taken by exchanges as a group.”
The picture is not as positive for other exchanges, with some of them unhappy at the slow progress in payments.
“There seems to be a mixed response in terms of repayments being made to exchange companies,” said a spokeswoman for the Foreign Exchange Remittance Group.
“Some of the companies are saying that the pace of the rebates is slow and the backlog of payments is long.
“They plan to review the situation in March before deciding on imposing the fees.”
A spokesman for the Pakistan Embassy in Abu Dhabi said it was working with foreign exchanges to resolve the issue.
“The embassy believes that the matter is being resolved to the satisfaction of all concerned parties,” he said.
Remittances play a crucial role in Pakistan’s economy, with US$3 billion sent from the UAE last year, according to figures from the Pakistan Embassy.
Statistics reported by the Foreign Exchange and Remittance Group showed Pakistan expected remittances sent from the Arabian Gulf to reach $15bn during the 2012/2013 financial year.
In the last financial year, expatriates in the UAE sent home $2.84bn, while those in other Arabian Gulf countries sent a record $8bn.