Circulars/Notifications - Payment System Department  
 Circular No. 2
August 22, 2009 

The Presidents / Chief Executive Officers
All Banks/DFIs

Dear Sirs / Madam,

Payment and Settlement of Home Remittance Transactions
under Pakistan Remittance Initiative (PRI)


Reliable and efficient payment systems are vital to facilitate delivery of home remittances securely and efficiently. State Bank of Pakistan has already taken initiative to develop Payment Systems Architecture of the country which would also help in achieving following objectives at the completion of all the phases:

  • Automatic delivery of home remittances in beneficiary account/ over the counter system in real time; generating confirmation SMS to remitter and the beneficiary.
  • Development of robust and reliable ATM Network to offer an option to beneficiary of home remittances to withdraw cash even after banking hours and holidays
  • Development of integrated and secured payment system infrastructure of Alternate Delivery Channels (ATM POS, IVR, Call Centre, Mobile Banking) offering option to beneficiary of home remittances to make P2P payments, payments at merchant sites, payment of utility bills, fund transfer etc. This would encourage beneficiaries to maintain balance in bank accounts eventually helping increase savings/deposits.

These goals would be achieved through phased implementation of payment system strategy. In the first phase banks will be able to use PRISM (RTGS) to transfer and settle inter-bank transactions. This would enable banks to transfer inter-bank transactions into beneficiaries’ accounts on the same day. Initially five banks (ABL, HBL, MCB, NBP and UBL) have been selected to be part of this initiative. Additional Ppartcipants may be added going forward subject to pilot tests.

Participating banks under Pakistan Remittance Initiative (PRI) are required to comply with the procedure attached in Annexure –A. Banks need to undertake proper liquidity management for reserve requirement and cash management at key geographical ATM and branch levels to accommodate anticipated increased volume and ensure smooth delivery of home remittances to the beneficiaries/ account holders.

SBP is also planning to provide facility to securely exchange data pertaining to inter-bank transactions online to effect to individual beneficiary account within stipulated time. However, banks should transfer data through secured/ encrypted email until the secured FTP server facility is made available. For exchange of data banks will use agreed standard file format attached at Annexure –B.

Participating banks are highly encouraged to take following initiatives:

  • To enable a system to send SMS to the remitter and the beneficiary, after crediting the remittance amount in the beneficiary account or in the system for the cash payment at the counter.
  • Install ATMs at key locations/ branches to facilitate cash withdrawals after banking hours and holidays. In this regard they may also take measures to create awareness among beneficiaries to use ATM for cash withdrawal.
  • To promote use of E-Banking/M-Banking Channels to make payments at merchant sites, transfer of funds, pay utility bills etc. which are available even after banking hours. In this regard; banks may consider issuing Remittance Cards and reduce/ waive various fees and charges on the use of these channels.

Participating banks need to ensure adequate controls in the process of transfer and payment of remittances in/through beneficiary’s account and over-the-counter payments. Furthermore, they are also required to carry out procedures required to ensure strict compliance of all SBP rules & regulations including those related to KYC and AML/CFT measures.

All other laws, regulations and SBP instructions relevant to remittances will also be applicable in addition to this circular.

The circular is being issued under Payment Systems and Electronic Funds Transfer (PSEFT) Act 2007 and non compliance will be subject to penalty and compensation under the relevant clauses of PSEFT Act 2007.

For any query, please contact to the Payment System Department, SBP, Karachi.


Encl: As above: Annexure A, Annexure B, Annuxure C

Yours sincerely,


(Muhammed Saleem Rehmani)
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