In a significant move to curb illegal remittance channels, Pakistan’s government has ramped up efforts to target illicit transactions, including hawala hundi operations. Finance Minister Senator Muhammad Aurangzeb outlined the government’s strategic approach during a National Assembly session on March 18, 2025, under the chairmanship of Speaker Sardar Ayaz Sadiq.
The crackdown, which began in 2023 under the caretaker government, continues to be a focal point of the current administration’s economic reforms. Senator Aurangzeb emphasized that this initiative, in collaboration with the State Bank of Pakistan (SBP), has successfully targeted informal channels for remittances, such as hawala and hundi, both of which have traditionally been used to move money without passing through formal banking channels.
According to the Finance Minister, the government’s approach has focused on strengthening formal remittance systems by implementing a strict regulatory framework. Under this policy, exchange companies are now subjected to uniform rules that ensure only authorized entities can operate in the remittance market. To facilitate this, the SBP has raised the capital requirements for exchange companies, ensuring that only financially sound firms are allowed to conduct business in this sector.
In a bid to make remittance channels more accessible and efficient, the government has also instructed ten major banks to establish dedicated exchange counters. These steps have contributed to a significant reduction in the informal remittance business, with the overwhelming majority of funds now flowing through authorized channels.
The results of these measures are already apparent. In 2023-2024, Pakistan’s remittances from overseas Pakistanis totaled an impressive $30.02 billion. Minister Aurangzeb highlighted that in the first nine months of the current fiscal year, remittances have shown considerable growth and are projected to reach between $35 billion and $36 billion by the end of FY25. This increase in remittances is attributed to the government’s policies aimed at providing more convenient options for overseas Pakistanis to send money home.
In addition to addressing the remittance issue, the Finance Minister provided updates on other aspects of government policy during the National Assembly session. He clarified that there are no current plans to revise the pay scales or significantly increase the salaries and allowances of federal government employees in the upcoming fiscal year.
Aurangzeb also took the opportunity to discuss ongoing reforms in the Federal Board of Revenue (FBR), which are designed to improve its functionality and restore public confidence in the tax collection process. He emphasized that the government’s commitment to tax digitalization is progressing with the help of McKinsey & Company, who were selected through a transparent process. The McKinsey team is working closely with the National Database and Registration Authority (NADRA) and Pakistan Revenue Automation Limited (PRAL) to streamline tax collection and enhance efficiency.
In response to questions during the session, the Finance Minister addressed the issue of tenancy ceilings and informed the house that a revised market survey from the Ministry of Housing and Works had been received. This survey is now being reviewed to determine whether the rent limit for privately-owned residential properties should be increased.
On the broader economic front, Minister Aurangzeb also provided insights into Pakistan’s foreign debt situation. According to the Ministry of Finance, Pakistan’s total foreign debts and liabilities as of June 2023 amounted to $126.14 billion, representing 43.03% of the country’s Gross Domestic Product (GDP). The country repaid $11.47 billion in foreign debt during the fiscal year 2024.
In terms of imports, the Commerce Minister, Jam Kamal, shared that Pakistan imported 3,140 metric tons of sugar between March 2024 and January 2025, spending over $3 million on these imports. Additionally, Pakistan imported 50,000 tons of sugar from India.
Addressing unemployment, the Ministry of Planning and Development reported that no new survey had been conducted since 2021 to determine the current unemployment rate. However, according to the 2021 survey, the unemployment rate stood at 6.3%, with 4.5 million people unemployed and 67.2 million people in the workforce.
In conclusion, the National Assembly session ended with a unanimous resolution to allocate the National Assembly Hall for national security briefings, underscoring the ongoing efforts to address key national issues. The government’s crackdown on illegal remittance channels continues to be a pivotal strategy in improving Pakistan’s financial ecosystem and ensuring that overseas remittances flow through formal, regulated channels.