Remittances sent by overseas Pakistanis play a key role in maintaining a balance in Pakistan’s current account. These are the second biggest source of foreign exchange for the country after exports. National Bank of Pakistan (NBP) handles the largest percentage of these crucial inflows and has been playing a pivotal role by promptly transfer of money to the recipients’ accounts.
Syed Hasan Irtiza Kazmi – EVP/Group Head, National bank of Pakistan (NBP) is a seasoned banker with over 22 years of rich and diversified experience in the financial sector. He has recently been elevated to the position of Head of Global Home Remittance Management Group at the Bank. He was previously Divisional Head – Consumer Banking, Cash Management & Product Development, Commercial and Retail Banking Group, NBP.
During his career, he has worked in various capacities at Pakistan Kuwait Investment Company (Pvt.) Limited, Dubai Islamic Bank Pakistan Limited, Bank Alfalah Limited, ORIX Investment Bank Limited and MCB Bank Limited. Kazmi has also served as a Nominee Director of NBP on the Board of Directors of various listed and non-listed companies.
Irtiza Kazmi has an ambitious plan to boost the overall inflow of remittances through banking system and make NBP a preferred choice. The Bank has its branches spread throughout the country. The added advantage is that all of NBP’s branches are ‘real time online branches’.
Following are the excerpts from an exclusive interview with Irtiza Kazmi.
Eurasia Review: You have recently taken over position as Head of Global Home Remittance Management Group, what are the facets of your strategy to boost remittances being handled by NBP?
Irtiza Kazmi: The first and foremost thing that has our focus is technology. Technology is rapidly changing our lives on a daily basis; remittances are no exception. In Pakistan, the remittance payment options are very limited; you can pick up cash from any branch or get the money transferred in your account. The global remittance offerings are far more than what is being offered to the Pakistani customer. We are striving to offer more innovative products and services to our customers in coming days.
The second most important thing is customer service. Remittance is not a one off business. A remitter usually sends money to his family every month, that’s 12 transactions per year. If the customer is not getting the service it needs at the branches, he will visit other banks. So one of the most important things in increasing business is customer service and that will also be improved with the technological advancement. If the customer can receive their funds without visiting the branch and have access to his remittance 24/7 that’s when the game changes.
Third and equally important thing is our relationship with our foreign tie-ups. Pakistani Diaspora is spread across the world and they all want to send money to their families back home. We have around 40 plus tie ups across the globe and we cover over 180 countries and territories through our tie-ups. We are striving hard to increase this number to give more options to the Pakistani expats to send money home.
Eurasia Review: How efficient and elaborate is NBP’s branch network in Pakistan?
Irtiza Kazmi: NBP has one of the widest branch networks with around 1400 branches across Pakistan. Our strategy is to provide banking services to customers from all walks of life. We are present in cities and towns where at times we are the only bank. As you are aware that only about 15% of Pakistan’s population is banked where they hold individual or joint accounts and vision of the Government of Pakistan as well as that of State Bank of Pakistan (SBP) is to include as many people into the banking system as possible. We are working for this goal successfully and can easily say that we enjoy the deepest penetration geographically in Pakistan.
Eurasia Review: How extensive is NBP network in Middle East, Europe and North America?
Irtiza Kazmi: We have presence in 17 countries. From East to West, our network starts from Japan, Hong Kong, China, South Korea, to Bahrain and Kingdom of Saudi Arabia (KSA) in the Middle East, to Kazakhstan, Turkmenistan, Azerbaijan and Uzbekistan in Central Asia, to France and Germany in Europe and USA and Canada and our close neighbors Afghanistan and Bangladesh. We cover the globe when it comes to the having branches or representative offices. We are continuously working on increasing our branch network based on the business opportunities.
Eurasia Review: Which of the regions out of Middle East, Europe and North America will be your prime focus?
Irtiza Kazmi: As far as remittances go, currently Middle East is the leading contributor. As per SBP figures, out of about US$20 billion that were remitted to Pakistan lately, over US$12.75 were received from the Middle East, that’s 64% of the total quantum. Within the Middle East, over US$10 billion were received from KSA and UAE alone with about US$5.9 billion and US$4.3 billion respectively. The remaining US$2 billion was spread between Bahrain, Qatar, Kuwait and Oman to name a few. Europe, including the UK sent around US$3.4 billion with UK having the major share of the pie with over US$2.5 billion. As for USA, the total remittances received were around US$2.5 billion.
Having said this, our focus on all of the regions is equal. There are many Pakistanis that are moving to the West and have ties within Pakistan but are unable to send their money through legal channels because of either limitations/regulation at their country of residence or non-availability of easy options. We are trying to establish relationships with foreign banks as well as money sending businesses enjoying global presence to assist these customers.
The current situation in KSA is also very alarming for us as a good number of Pakistanis are facing difficulty in continuing their jobs owing to downward slide in crude oil prices and its overall impact on the economy of KSA. The Government needs to facilitate these Pakistanis on priority as they are the source of the much needed foreign exchange for the country.
Eurasia Review: What incentives are being offered to overseas Pakistani by NBP to use its facilities?
Irtiza Kazmi: NBP does not charge the Overseas Pakistanis any fee for sending their remittance through majority of our partner banks and Money Sending Businesses around the world. There are no charges being levied on the beneficiaries in Pakistan either, so the remittances are free of charge. Additionally, we have recently launched a campaign during Ramadan where we have offered gifts/prizes to our customers for sending remittances through NBP. We also have staff present in KSA and UAE who assists the remitters in sending the money to Pakistan and answer any question that they may have and resolve any complaint that may arise.
Eurasia Review: How does your fees/changes compare with other banks operating in Pakistan?
Irtiza Kazmi: I have said earlier that here are no charges on any of the remittances received from 95% of our tie-ups. The transaction is completely free, both at the remitter’s end and the beneficiary’s end. However, a few of our tie-up partners charge a fee from the remittance but that’s the same across the board and those charges are paid by the remitter regardless of the bank from which the remittance is collected.
Eurasia Review: Do you believe that after Britain’s verdict to quit European Union, remittances originating from Britain/EU may be affected?
Irtiza Kazmi: I don’t think that there will be a big impact. As I mentioned previously, UK takes the lead in remittances from Europe with a market share of 75%. With that said, the only impact that may arise is because of the devaluing Pound Sterling. As all remittances are received in Pakistan are in US dollars, a weakening Pound might slightly impact the overall remittance numbers, but this in my view will be negligible.
Eurasia Review: If yes, what measures are being taken to overcome the potential threats?
Irtiza Kazmi: We are educating the customers to use legal channels for sending their remittances. Rough estimates suggest that remittances sent through illegal channels are equal to the remittance sent through legal channels. That’s about US$20 billion coming into Pakistan through illegal channels of Hawala and Hundi. We are already working on promoting legal channels for remittances to our customers and feel that the media can and should also play its role in educating the masses. I am sure that you are aware that most of the money sent through illegal channels is used for illegal activities both within Pakistan and globally. We want our customer to know that their money is safest when sent through the banking channel and that money also helps Pakistani economy.
Eurasia Review: It is believed that a significant quantum of remittances is being sent through informal channels, what are the reasons people avoid formal channels?
Irtiza Kazmi: Lack of awareness, in my opinion, is the main factor. People are afraid that there are hidden charges in sending remittances whereas there are actually none. The risk in sending money through illegal channels is way too much. There have been instances where these illegal players took the customer’s money and disappeared. People lost their monthly salaries and the worst part is that they could not even lodge a complaint against anyone as they were part of an illegal activity.
These misconceptions come from the lack of information. That’s one of the focus areas for us and we are trying to educate the customer that sending the money through legal channels is not only the safest but the fastest as well. Money sent from anywhere in the world is available to the customer in Pakistan within minutes.
People are not aware of the ills that illegal money sending business is involved in. Reports show informal channels use this money in human trafficking, illegal trade of weapons, drugs and what not. Therefore, the people sending money through illegal channels are supporting these activities as it is their money that is being used in conducting all sorts of illegal activities. I would again request the media to focus on this issue and also play their part in educating the customers in the benefits of using the formal channels for remittance as against the ills of informal and illegal channels.