ISLAMABAD: During the last two years foreign airlines have taken out $ 1.5 billion in the form of remittances from Pakistan due to lack of proper implementation of control mechanisms by the State Bank of Pakistan (SBP) and Civil Aviation Authority of Pakistan.
Governor SBP Tariq Bajwa, briefing Senate’s Standing Committee on Finance, Revenue and Narcotics here on Tuesday, informed that the foreign airlines in 2015-16 earned $ 1.068 billion in Pakistan through the sale of tickets out of which they used $ 300 million for local expenditures in Pakistan while remitted $ 795 million to their countries. Similarly, the foreign airlines earned $ 1.238 billion in 2016-17 and remitted $ 786 million to their countries while the spending remaining amount in Pakistan.
Senate Standing Committee Chairman Saleem Mandviwalla urged the SBP and other concerned authorities to take notice of the situation. He said that many others countries have implemented control mechanisms but unfortunately, there is no restriction in Pakistan where the foreign airlines operate without any control.
“In India, there is a restriction that foreign airlines can only send 50 per cent of remittances to their countries while they need to invest the rest in the host country. Resultantly, the airlines invest the remaining amount in various sectors,” he said adding that the foreign airlines usually send dollars back to their countries after converting rupees into dollars.
“Emirates Airline operates six flights daily from Karachi alone. The airline can fly from any airport of the country. The tickets being sold by the airlines here are not meant for Dubai. We should at least have check or control over the foreign exchange going out of the country,” he said.
Talking about the situation of Pakistan’s foreign exchange reserves, Mandviwalla said that the country needs $3 billion till June this year and the government is willing to go for another bond program for meeting requirements of debt repayment.
SBP may reconsider a further devaluation of rupee as there is still a difference of Rs 2 per dollar, he added.
He further informed that the imports of the country have increased by 12 per cent despite the tall claims of the government of controlling imports through the imposition of regulatory duties. “Whatever reserves we have presently is of loaned money,” he stated.
Commenting on the increase in counterfeit notes in the country, an SBP representative said that the strategy to detect fake currency notes was adopted in 2015 under which cash management function is being brought at par with international and regional best practices ensuring that no counterfeit note is issued by banks.
The quality of banknotes in circulation is also being improved. In phase-I of the strategy starting from April 1, 2017, banks in 30 cities were given machines for detection of banknotes of Rs 500 and above. By July 2018 machines will be introduced for detection of fake notes of Rs 100.
Apart from the technical measures, SBP has also launched an awareness programme to counter the fake notes.
However, the members of Senate committee termed the measures insufficient for controlling the circulation of counterfeit notes in the country asking SBP to do more in this regard.
