ABU DHABI // The Pakistan embassy has urged the community to remit money through legal channels now that their government has removed transaction fees.
The mission said there were many Pakistanis who thought they would save money using hundi, an informal and now illegal banking system that dates to back British colonial rule, and can also be used for money-laundering.
"I believe they are not aware of the benefits of sending it through legal means," said Jamil Ahmad Khan, the Pakistani ambassador to the UAE.
The embassy will send text messages to make residents aware of the benefits of remitting money legally, Mr Khan said.
Last year, Pakistani expatriates in the UAE sent home an estimated US$3.8 billion (Dh13.95bn), a 70 per cent rise from the $2.2bn in 2010.
And $2.6bn was remitted from the UAE in the first half of this year, the ambassador said.
The UAE's Pakistani population has grown from about 800,000 in 2007 to 1.2 million.
The embassy yesterday honoured community members who remitted more than $15,000 in a year.
"We would like to honour the community members who send their hard-earned money to Pakistan by legal channels," Mr Khan said.
Members of the community who have a registered a record of their remittances with the embassy received commendation certificates from Mr Khan.
He stressed that sending money illegally could prompt tax problems if officials needed to determine the source of funds.
Those sending money through proper channels are given a receipt.
People who run hundi schemes, trust-based systems used to transfer funds across countries and continents, charge more than exchange houses, Mr Khan said.
"In fact, there is no charge for remitting money to Pakistan and it yields attractive exchange rates, which many are unaware of. We will make them aware," he said.
Mohammed Mahtab, who has lived in the UAE for 20 years, was at the embassy for the first time.
"If such events are held on a regular basis, we can interact better with the missions and get our issues resolved," Mr Mahtab said.
"Still plenty of people here are using illegal channels to send money back home, but if the embassy begins an SMS system to make them aware, people will accept and understand it because they love their country."
He urged the embassy to regularly visit labour camps to show workers there that "somebody cares".
Y Sudhir Kumar Shetty, chief operating officer of global operations at UAE Exchange, described as noteworthy the measures taken by the central bank of Pakistan to ensure legal remittances.
"They started a rebate where there is no transaction fee for money remittances," Mr Shetty said. "The exchange houses are reimbursed for the transaction fee by the Central Bank of Pakistan."
