SBP, Arab Monetary Fund to integrate cross-border remittance platforms

The State Bank of Pakistan (SBP) and the Arab Monetary Fund (AMF) are currently in the process of integrating their respective payment systems, Buna and Raast, to streamline cross-border remittances between Pakistan and the Arab region. 

This development follows a memorandum of understanding (MoU) signed last year by the governor of the SBP and the chairman of the AMF, to establish a framework of cooperation between Buna, a cross-border payment system operated by Arab Regional Payments Clearing and Settlement Organization (ARPCSO) and owned by AMF, and Raast, a Pakistani instant payment system for real-time settlement of small-value retail payments. 

Technical talks are now underway to integrate the two systems and facilitate millions of Pakistanis living in the Gulf region by enabling them to send remittances in real-time at a lower cost. 

The integration will also benefit businesses through instant, safe and cost-effective cross-border payments and aims to strengthen economic, financial, and investment ties between Arab countries and Pakistan.

The deputy governor of the SBP, Saleem Ullah, said in a recent interview that these talks aim to finalise the technical requirements for the integration, with both systems using the same vendor to potentially expedite the process.

The initiative is expected to significantly benefit the approximately five million Pakistanis living in the Gulf by reducing remittance costs and transaction times, thereby encouraging the use of legal remittance channels. 

Additionally, it promises to foster economic and financial ties between Arab countries and Pakistan, potentially increasing export opportunities for Pakistani goods and services. 

The integration also aims to enhance the regulation of remittances through the SBP, possibly allowing for the use of these funds to secure financing from Gulf markets.