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Will remitting money from UAE to Pakistan to cost more from this month?
From July 1, State Bank of Pakistan ended the reimbursement mechanism under which banks were compensated for processing eligible home remittance transactions free of charge
- PUBLISHED: Sun 12 Jul 2026, 8:05 AM
The State Bank of Pakistan’s (SBP) decision to discontinue two incentive schemes for banks is not expected to disrupt remittance flows or push up transfer costs for overseas Pakistanis from the UAE and other countries.
Pakistan’s central bank withdrew the Telegraphic Transfer Charges Incentive Scheme (TTCIS) and the Sohni Dharti Remittance Programme (SDRP) from July 1, ending the reimbursement mechanism under which banks were compensated for processing eligible home remittance transactions free of charge.
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Under the TTCIS, the SBP reimbursed banks for telegraphic transfer charges on eligible remittances, ensuring transactions remained free for both senders and beneficiaries. The SDRP, meanwhile, rewarded overseas Pakistanis with points for using formal banking channels. Reward points accumulated up to June 30 can still be redeemed until June 30, 2027, after which the SDRP will be fully wound down.
The SBP has directed banks and exchange companies to continue offering eligible remittance services free of cost to customers despite the end of government reimbursements, effectively shifting the cost burden onto the institutions themselves. The Pakistan Remittance Initiative, a separate and larger facilitation programme under which banks earn a percentage-based incentive on remittance volumes, remains unaffected.
As reported by Khaleej Times on Thursday, remittances by overseas Pakistanis jumped 8.6 per cent to a record $41.6 billion during 2025-26 fiscal year, led by Saudi Arabia and the UAE.
Pakistan’s Prime Minister Shehbaz Sharif on Thursday expressed gratitude to overseas Pakistanis for sending higher remittances.
The State Bank of Pakistan's data showed that Pakistanis in Saudi Arabia remitted over $9.78 billion, followed by the UAE ($8.80 billion), the UK ($6.32 billion), the US ($3.62 billion) and Italy ($1.54 billion).
There are over 15 million Pakistanis living abroad who send remittances every month to support their families back home. A large number of them live and work in the six Gulf countries — Saudi Arabia, UAE, Qatar, Oman, Bahrain and Kuwait.
‘No material impact’
Asked whether the SBP decision would affect exchange houses and remittances from the UAE, Ali Al Najjar, CEO of Al Ansari Exchange, said: “At this stage, we do not expect the State Bank of Pakistan’s decision to have a material impact on Al Ansari Exchange’s operations or on the wider remittance market in the UAE. Pakistan remains one of our largest remittance corridors, and the policy appears to concern incentive arrangements within Pakistan’s banking system rather than the fundamentals of cross-border demand or infrastructure.”
Al Najjar said overseas Pakistanis were likely to keep remitting through existing channels.
“We do not currently expect this decision to affect remittance flows to Pakistan. 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 for them to do so.”
Will remittance cost go up?
On the key question of whether the discontinuation of incentives would raise remittance costs for Pakistanis sending money from the UAE, Al Najjar said customers were unlikely to feel any difference.
“We do not currently anticipate any impact on customers' remittance costs. Reports suggest that eligible home remittance transactions in Pakistan are expected to remain free of charge for both senders and beneficiaries.”
He pointed out that responsibility for the arrangement now rested with receiving institutions in Pakistan.
“This is a matter for receiving institutions in Pakistan, and we understand customers can continue to send money… as usual. Should there be any changes that affect customers, we will communicate them through the appropriate channels,” he added.
