Remittances to Pakistan: Complete Guide for the Pakistani Diaspora
Best channels, exchange rate tips, Roshan Digital Account benefits, and tax treatment of remittances for overseas Pakistanis sending money home.
Pakistan is one of the world’s top remittance-receiving countries. In FY 2023-24, overseas Pakistanis sent home approximately USD 27–29 billion — the second largest source of foreign exchange after exports. If you are part of the Pakistani diaspora sending money home, this guide explains how to do it cheaply, safely, and in a way that maximizes value for your family.
Pakistan’s Remittance Landscape
Who Sends Remittances to Pakistan?
Pakistan’s diaspora spans the globe. The largest sources of remittances by country are:
| Source Country | Approx. Share |
|---|---|
| Saudi Arabia | ~27% |
| UAE | ~20% |
| UK | ~14% |
| USA | ~12% |
| Other GCC (Kuwait, Qatar, Bahrain) | ~12% |
| Other (Europe, Australia, Canada) | ~15% |
Workers in Saudi Arabia and UAE primarily send smaller, more frequent transfers (supporting family living expenses), while the UK, USA, and Europe diaspora often send larger, less frequent amounts.
Channel 1: Bank Wire Transfer (SWIFT)
The most traditional method. You instruct your foreign bank to send funds via SWIFT to a Pakistani bank account.
Pros:
- Direct, fully documented
- Good for large amounts (USD 5,000+)
- Best exchange rates at the receiving end if done through a major bank
Cons:
- Typically 1–3 business days
- Fees: USD 15–35 per transfer (sending bank) + correspondent bank charges
- Exchange rate may not be the best available
Best for: Large, occasional transfers where documentation matters (property purchase, investments)
Channel 2: Money Transfer Operators (MTOs)
MTOs are typically faster and cheaper than bank wires for smaller amounts. Regulated by financial authorities in the sending country.
Western Union
- Available in 200+ countries; strong retail network in Pakistan (branches, Jazz Cash, EasyPaisa)
- Fees: typically 1–3% of transfer amount
- Speed: within minutes for cash pickup; 1–2 days to bank account
- Exchange rate: markup of 1–3% on mid-market rate
MoneyGram
- Similar network to Western Union; competitive for Gulf-to-Pakistan corridors
- Often competitive rates for Saudi Arabia to Pakistan transfers
- Speed: minutes for cash pickup
Wise (formerly TransferWise)
- Uses mid-market exchange rate (the “real” rate you see on Google)
- Low transparent fees (typically 0.3–1%)
- Transfer to Pakistani bank accounts: 1–2 business days
- Best choice for UK, Europe, USA, Australia senders
- Payoneer-like recipient account option available
Remitly
- Dedicated to diaspora remittances; competitive for USA, Canada, UK to Pakistan
- Promotional rates for first transfer
- Speed: “Express” (minutes) vs “Economy” (3–5 days, lower fees)
- Integrates with Pakistani mobile wallets (JazzCash, EasyPaisa)
Al Ansari Exchange, Al Fardan Exchange (UAE/GCC)
- Cash over counter; excellent for Gulf workers sending cash
- Rates often better than banks for small amounts
- Widespread in UAE malls, souks, and labour camps
Channel 3: Roshan Digital Account (RDA)
The Roshan Digital Account is SBP’s flagship initiative to attract formal remittances and investments from overseas Pakistanis. Launched in 2020, it has attracted significant inflows and is a game-changer for the diaspora.
What is RDA?
RDA is a multi-currency bank account that overseas Pakistanis can open fully digitally without visiting Pakistan. It is available at 15+ scheduled banks including:
- HBL, UBL, MCB, Allied Bank, Meezan Bank, Bank Alfalah, Standard Chartered Pakistan
Key Benefits of RDA
1. Attractive Profit Rates on PKR Deposits RDA offers special profit rates (typically 1–2% above standard rates) on PKR-denominated deposits:
- Naya Pakistan Certificates (NPCs) available through RDA paid 6–7% in USD terms (rates vary; check current offerings)
- PKR deposits earn competitive national savings-equivalent rates
2. Naya Pakistan Certificates (NPCs) These are government savings certificates exclusively for RDA holders:
- Available in USD, GBP, EUR, CAD, and PKR
- Tenure: 3 months, 6 months, 1 year, 3 years, 5 years
- As of 2024-25, USD-denominated NPCs offered 6.5–7% per annum — exceptional for USD savings
- Profit is repatriable (you can send it back abroad freely)
- Tax-free — profits on NPCs are exempt from Pakistani income tax
3. Invest in Pakistan from Abroad Through RDA, overseas Pakistanis can:
- Invest in PSX-listed stocks
- Buy mutual funds
- Purchase government bonds (T-Bills, Pakistan Investment Bonds)
- Pay for property purchases in Pakistan
4. Full Repatriation Rights All funds in RDA (principal + profit) can be freely sent back abroad. This removes the historic fear of “getting stuck” — your foreign currency is safe.
How to Open an RDA
- Visit your chosen bank’s website (available fully online)
- Upload: valid Pakistani passport, CNIC, proof of overseas residence, source of funds declaration
- Account opening typically takes 2–5 business days
- Fund via SWIFT transfer from your foreign bank account
Exchange Rate Tips: Getting the Best Rate
Exchange rates can vary by 2–5% between providers — on a USD 1,000 transfer, that is PKR 6,000–15,000 difference.
1. Compare Rates Before Sending
Use our Remittance Calculator and Currency Converter to compare what different providers actually offer.
2. Avoid Weekend Transfers (When Possible)
Interbank rates are fixed on weekends. Some providers hold the weekend rate through Monday morning. Check if rates improve on Tuesday-Thursday.
3. Watch the Dollar-Rupee Rate Trend
If the PKR is depreciating, sending sooner captures more rupees per dollar. If PKR is strengthening (as it did in 2024-25), waiting slightly can be advantageous. Check live rates on our Currency Converter.
4. Use Limit Orders (Available on Some Platforms)
Wise and some MTOs allow you to set a target exchange rate and execute the transfer automatically when that rate is reached.
5. Avoid Airport Currency Exchange
Exchange counters at airports (in both sending and receiving countries) typically offer the worst rates — avoid for all but emergency cash needs.
Pakistan’s FASTER Payment System
FASTER (Fast And Secure Transfers for Efficient Retail) is SBP’s inter-bank retail payment system. It processes inward remittance credit to Pakistani bank accounts within 20 seconds on a 24/7 basis.
When you send money to a Pakistani bank account via any MTO or bank, FASTER handles the final credit in Pakistan. This is why many remittances now appear in your family’s bank account within minutes of you sending, even if sent at 2 AM Pakistan time.
Key benefit for senders: No need for your family to wait days for funds to arrive. Modern remittance corridors (especially UAE-Pakistan and UK-Pakistan) have near-instant delivery thanks to FASTER integration.
Tax Treatment of Remittances in Pakistan
This is a critical question for the diaspora: does receiving remittances create a tax liability in Pakistan?
The Good News: Remittances Are Not Taxable Income
Money received as genuine family remittances (supporting parents, spouses, children) is not taxable income in Pakistan. There is no tax on receiving remittances for personal/family support purposes.
However, There Are Important Nuances
1. Large Amounts Require Source Declaration If your family member deposits large amounts (cumulatively significant), FBR may question the source in a wealth statement audit. Your overseas family member should maintain records of the transfers.
2. Investment Remittances Are Treated Differently If you remit money to Pakistan for investment purposes (property, stocks, business), that investment is tracked in the wealth statement. Profits generated from that investment are then taxable.
3. Profit on RDA/NPC is Tax-Exempt One of the biggest benefits of RDA: profits on Naya Pakistan Certificates are explicitly exempt from income tax and withholding tax under the Income Tax Ordinance.
4. No Zakat Deduction on RDA RDA accounts are exempt from compulsory Zakat deduction at source — a unique benefit compared to regular bank accounts.
Security: Avoiding Remittance Fraud
- Only use licensed MTOs — verify registration with the financial regulator in your country (FCA in UK, FinCEN/CFPB in USA, CBUAE in UAE)
- Never share OTPs — no legitimate MTO asks for your OTP via phone call
- Verify recipient account number before large transfers
- Hawala/hundi is illegal — informal money transfers bypass SBP’s oversight and carry legal risk in both sending and receiving countries
Quick Comparison: Best Channels by Use Case
| Scenario | Best Channel |
|---|---|
| Small, frequent transfers (USD 200–500) | Remitly, Western Union, Al Ansari |
| Large transfers (USD 2,000+) | Wise or direct bank SWIFT |
| Investment in Pakistan | Roshan Digital Account (RDA) |
| Gulf workers (cash pickup) | Al Ansari, MoneyGram, Western Union |
| UK/Europe diaspora | Wise (best rate transparency) |
| Tax-free profit on savings | Roshan Digital Account + NPC |
Tools for Overseas Pakistanis
| Need | Tool |
|---|---|
| Compare live exchange rates | Currency Converter |
| Calculate net amount after fees | Remittance Calculator |
Pakistan’s remittance inflows are the lifeblood of millions of households and a critical pillar of the national economy. Sending through formal channels — especially RDA — benefits both your family and the country’s foreign exchange reserves.