This study explores the impact of fluctuations in the price of crude oil on remittances from the Gulf Cooperation Council (GCC) countries as well as impact of remittances inflows on financial development of Pakistan and both of the models finds the motive behind remittances in Pakistan that is either Consumption or Investment. In the ranking of top 20 remitting countries in the world, comprises most of the GCC countries. This paper, examines the effect of crude oil prices fluctuation on the worker’s remittances from Gulf Cooperation council towards Pakistan over the period of 1990-2016. By using the Panel data estimation procedure difference GMM, highlights the manifold variables effects and also the sensitivity of oil prices with the inflow of remittances towards country like Pakistan. There is a positive and significant impact of oil prices fluctuations on remittances, results are consistent with earlier studies. Though, the central motives for sending remittances remain controversial. First model of this paper observes the significance of altruistic versus investment motives.. This research finds that altruism is important for remitting, as the GDP per capita differential between sending and receiving countries is negatively associated with the inflow of remittances. By contrast, interest rate differentials coefficient is very small but significant, suggesting a weak investment motive (Chami et al, 2005). On the other hand this work explores the influence of remittance inflows on financial sector development in Pakistan using time series data from 1990 to 2014. Financial development index (FDI) has been constructed through Principle Component Analysis (PCA) using six main indicators of financial development from stock and banking sectors. Auto regressive distributed lag (ARDL) bound testing approach of co-integration shows that remittances have a positive impact on financial improvement in the short-run but a negative effect in the long run depicts that remittances received however did not stimulate financial development in the long-run (Karikari et al 2016). Different results of short run and long run elasticities indicates the compensatory motive behind remitting the migrants funds and weak opportunistic motive of migrants and these results are consistent with first model of this study. This study is important for Pakistan to properly articulate policies and channelize these growing inflows so that it can raise financial development. Supervisor:- Dr. Hassan M. Mohsin