SBP ends TT charges reimbursement for Banks, keeps free remittance facility intact

Banks and other authorised institutions will no longer receive reimbursement from the State Bank of Pakistan (SBP) for the cost of processing eligible workers' remittances after the central bank discontinued its Telegraphic Transfer Charges Incentive Scheme (TTCIS).

The decision, which took effect on July 1, 2026, was announced through a circular issued by the SBP on Thursday.

While ending the reimbursement mechanism, the central bank directed Authorised Dealers (ADs) to continue operating the scheme at their own expense and retain all of its key features. As a result, overseas Pakistanis sending eligible home remittances and their beneficiaries in Pakistan will continue to receive telegraphic transfer services without paying any charges.

The move shifts the financial burden of qualifying transfer costs from the SBP to participating banks, exchange companies and other authorised institutions, which will now be responsible for absorbing those expenses without reimbursement from the central bank.

The SBP also instructed Authorised Dealers to communicate the change to their customers.

The Telegraphic Transfer Charges Incentive Scheme was introduced to promote the use of formal banking channels for workers' remittances by eliminating transfer costs for eligible transactions. Under the programme, participating financial institutions were reimbursed for telegraphic transfer charges, ensuring that neither the sender abroad nor the beneficiary in Pakistan incurred any fees.

The incentive scheme was last revised in July 2025, when the SBP raised the minimum qualifying remittance amount from $100 to $200. The changes also expanded the programme to cover Exchange Companies (ECs), widening the number of institutions eligible to process zero-cost remittance transactions.

Although the reimbursement component has now been withdrawn, the central bank has made it clear that the zero-cost facility for eligible home remittances will remain in place despite the policy shift.