Wednesday 08 / July / 2026
Pakistan has introduced a significant change to its overseas remittance framework by discontinuing key incentive schemes that have supported the processing of billions of dollars in remittances from expatriate workers over the past several years.
The move has attracted considerable attention among overseas Pakistanis across the Gulf, particularly in Oman, the UAE and Saudi Arabia, where remittances remain a critical source of income for millions of families in Pakistan. Yet despite concerns among migrant workers, the policy change does not mean that remitters will immediately face charges when sending money home through formal channels.
Understanding the Policy Shift
Effective July 1, 2026, the State Bank of Pakistan (SBP) discontinued the Telegraphic Transfer Charges Incentive Scheme (TTCIS), a mechanism under which participating financial institutions were reimbursed for eligible remittance-processing costs.
The central bank has also ended the Sohni Dharti Remittance Program, which rewarded overseas Pakistanis with loyalty points for using formal remittance channels. Both initiatives were designed to encourage remittances through regulated banking and exchange company networks and to reduce reliance on informal transfer systems.
While these schemes have been withdrawn, Pakistan’s authorities have made it clear that the fundamental objective remains unchanged: promoting remittances through formal and transparent channels.
Will Overseas Pakistanis Have to Pay More?
The immediate answer appears to be no.
The State Bank of Pakistan has instructed participating institutions to continue facilitating eligible home remittances without imposing charges on senders or beneficiaries. As a result, expatriates using licensed banks, exchange houses and approved digital remittance platforms are unlikely to experience any immediate change in the cost of sending money home.
For workers in Muscat, Sohar, Salalah, Dubai, Abu Dhabi or Riyadh, the customer experience is expected to remain largely unchanged in the near term.
Why Did Pakistan End the Schemes?
The decision reflects Pakistan’s broader efforts to rationalise expenditure and improve fiscal efficiency while maintaining support for overseas remittances.
Over the years, remittance inflows have become one of Pakistan’s most important sources of foreign exchange. As remittance volumes reached record levels, the cost of maintaining incentive and reimbursement schemes also increased.
The policy shift therefore appears aimed at reducing direct fiscal commitments while preserving the overall attractiveness of formal remittance channels.
Why Remittances Matter
Few economic indicators are as important to Pakistan as overseas remittances.
Millions of Pakistanis working abroad support families, education, healthcare, housing and small businesses through regular transfers. These inflows also help strengthen Pakistan’s foreign exchange reserves, support financial stability and contribute to economic growth.
The Gulf region remains the largest source of remittances to Pakistan, with Saudi Arabia, the UAE, Oman, Qatar, Kuwait and Bahrain collectively accounting for a substantial share of total inflows.
For many households, remittances are not simply financial transfers. They represent school fees, medical expenses, housing payments and everyday living costs.
The Importance of the Oman-Pakistan Corridor
Oman continues to play an important role in Pakistan’s remittance ecosystem.
The Sultanate is home to a sizeable Pakistani workforce employed across construction, services, retail, logistics, manufacturing and professional sectors. These workers contribute significantly to household incomes in Pakistan through regular remittances.
The Pakistan-Oman corridor has historically benefited from strong cooperation between banks, exchange houses and financial institutions on both sides. This collaboration has helped keep remittance services efficient, secure and competitively priced.
The continued strength of this corridor is important not only for Pakistani families but also for broader efforts to maintain transparent and regulated cross-border financial flows.
What Happens Next?
The withdrawal of government-funded incentive schemes represents a transition rather than a disruption.
The success of the new framework will depend on the ability of banks, exchange companies and digital remittance providers to maintain efficient services while continuing to encourage the use of formal channels.
Competition among service providers, advances in digital payments and long-standing partnerships between financial institutions are expected to support affordable remittance services in the foreseeable future.
At the same time, policymakers will be closely monitoring remittance trends to ensure that the shift away from direct incentives does not affect inflows or encourage a return to informal transfer mechanisms.
Looking Ahead
Pakistan’s decision should not be interpreted as the end of fee-free remittances for overseas workers. Rather, it represents a move toward a more sustainable and market-oriented framework that seeks to preserve the benefits of formal remittance channels while reducing the fiscal burden of incentive programs.
For Pakistani expatriates in Oman and across the Gulf, the immediate outlook remains reassuring. Remittances continue to flow through regulated channels, service providers remain competitive, and the essential role of overseas workers in supporting Pakistan’s economy remains as important as ever.
The true measure of success will be whether Pakistan can sustain strong remittance growth while maintaining affordability, efficiency and trust in the formal financial system.
