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"We are seeing that the use of formal channels for sending money (by expatriates) is not growing as much as the use of informal channels," Reza Baqir said while addressing the fourth annual banking award, the Express Tribune reported on Saturday."The reasons for this may be the comparatively higher cost of sending money (through formal channels) and the questions asked (by banks) from the senders," he added.The central bank chief had recently told the federal cabinet that overseas Pakistanis were reluctant to provide additional information about themselves to banks fearing that their data, which would be shared with the Federal Bureau of Revenue (FBR) in line with the Financial Action Task Force's {FATF) recommendations, could be 'misused'.Bankers and experts have estimated that receipt of remittances through illegal channels stood at around $8 billion a year.Pakistan received $9.3 billion in the first five months (July-November) of the current fiscal year through legal channels.Last year, the government had launched a crackdown on the operators of the illegal hundi and hawala money transfer systems and ran a campaign to encourage the use of legal channels like banks.Speaking at the ceremony, the SBP governor noted that banks were heavily investing in government sovereign papers, treasury bills and Pakistan Investment Bonds (PIBs).He urged banks to lend more to the private sector to boost economic growth."Banks should lend more as they have become risk averters following the incorporation of amendments to the money laundering and terror financing rules," he added."We have made significant improvement in FATF compliancebanks are with us (in the FATF journey)."Baqir was upbeat about the country's turning economic fortunes."The country has a bright future as the newly implemented policies are helping in addressing imbalances in the economy," he maintained."The outlook for the real economy is improving in our (SBP) view.The central bank chief said the recently introduced market-based exchange rate to determine true rupee-dollar parity had started helping improve the country's exports.Secondly, he added, the central bank is not lending money to the government since the beginning of the current fiscal year."This (lending to the government) was the reason behind the loss of the foreign currency reserves," he noted.The country's foreign reserves have improved to $11.5 billion from a low of $7 billion a few months ago."The improvement in the reserves came from a massive reduction in the current account deficit. The foreign investment in debt instruments like treasury bills holds only a one-fifth share in the overall improvement in the reserves," he pointed out."Policies are addressing the accumulated imbalances in the economy."Pakistan signed a tough economic programme with the International Monetary Fund (IMF) in May to borrow a total $6 billion to improve its international payments capacity.The IMF has so far released two loan tranches - coming to a total of $1.5 billion - since July.The lending institution has found the country's economy running in the right direction in its first economic review under the loan programme.( With inputs from IANS )

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