Amir Saeed

Restrictive banking policies and cumbersome foreign transaction processes prevent Pakistan’s IT exporters from repatriating their earnings, depriving the economy of crucial foreign currency inflows.

Talking to WealthPK, Anees Amin, Chief Executive Officer at TechScape Private Limited, highlighted that the IT sector had witnessed a rapid growth recently, establishing the country as a competitive player in the global technology outsourcing market. IT services, software development, and freelancing are key components of the country’s export portfolio. He argued that despite these advancements, many IT companies struggle with strict banking regulations that complicate the process of transferring foreign earnings back to Pakistan. These policies have made it difficult for businesses to access their funds, forcing many to keep their profits abroad. “One of the most significant challenges is the restrictive nature of the banking system, which complicates foreign transactions for the IT exporters. These businesses often face delays and hurdles in converting foreign earnings into local currency or transferring funds to their home banks.”

“As a result, many retain their revenues in foreign accounts, which limits the amount of foreign currency flowing into the country through the IT exports. This trend has also contributed to a decline in remittance inflows crucial to the country’s economic stability.” He suggested that the government should simplify the regulatory procedures to reduce strain on the financial institutions. Currently, many banks are overwhelmed by the complexity of rules surrounding the foreign currency transactions, which results in delays and inefficiencies. “A more streamlined approach would help reduce these delays, making it easier for the IT exporters to repatriate their earnings and reinvest them. Furthermore, eliminating redundant bureaucratic barriers would make the banking system more transparent and efficient, ultimately fostering an environment more conducive to the business growth and innovation.” Talking to WealthPK, Ghulam Rehman, President of Freelancers Association Gilgit-Baltistan, said the central bank had recently introduced a policy adjustment allowing for limited equity investment abroad.

This has given the IT exporters greater flexibility in managing their foreign earnings. “As this adjustment is a step in the right direction, more comprehensive reforms are necessary to unlock the full potential of the country’s IT sector. Further steps must be taken to simplify the financial operations for exporters, as the current banking system is still insufficient to sustain the industry’s expansion.” He suggested that a more adaptable and easily accessible banking system would promote additional investment in the IT industry, drawing in foreign and domestic capital. The financial system must be changed to accommodate the unique requirements of technology-driven enterprises if the country’s IT sector is to realize its enormous untapped potential. “The government should foster an environment more conducive to innovation and entrepreneurship by facilitating more seamless international transactions, which would ultimately increase the sector’s contribution to the economy.”

Credit: INP-WealthPk