UAE exchange firms to charge extra fees for Pakistan remittances

Foreign exchange firms might impose additional fees on remittances from the UAE to Pakistan, news website www.emirates247.com reported on Monday.

The move will mean sending funds to families back home will become much more expensive for Pakistani expatriates in the UAE.

According to the report, the Foreign Exchange & Remittance Group (FERG) announced that UAE currency exchange companies may have to charge the extra service fees if the Pakistan government does not settle outstanding rebates exceeding millions of dirhams.

The backlog of rebates dates to August 2011, despite FERG taking up the issue with the State Bank of Pakistan, as well as the Pakistan embassy in UAE.

"Exchange companies in UAE have now made it clear that if outstanding rebates are not received immediately, they would be constrained to charge service fees on all remittances to Pakistan," the report said.

The Remittance Rebate System was introduced in order to encourage sending money to Pakistan through official banking channels and curb unofficial remittances known as Hundi or Hawala. Under the system, banks and exchange companies receive a rebate instead of service charges for remittances above $100.