Finance Minister Asad Umar Monday formally launched State Bank of Pakistan’s (SBP) Electronic Money Institutions (EMIs) regulations, providing regulatory framework for institutions who want to offer innovative payment services to the public. The regulations would prescribe minimum service standards and requirements for EMIs to ensure delivery of payment services in a safe and cost-effective manner.
The regulations, to be applicable from April 1, are aimed at promoting innovative, user-friendly and low value digital payment prepaid instruments which have been instrumental in promoting cashless payments like merchant checkouts, e-commerce, transportation and toll payments.
Speaking at the launch ceremony, Umar said that digitization was imperative for bringing about economic revolution in the country, hence the measure taken by the SBP was laudable and much needed. According to a report by the Associated Press of Pakistan, the minister said that this regulation would help resolve different core issues, promote transparency and reduce dependence on human resources. Currently, it is easy for people to remain outside the formal network as it is profitable. However, when the system is expanded, it would make it difficult for people to remain out of this system.
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The minister said that the country was facing many issues in terms of macro-economic matters, low national savings, low ratio of investments and high fiscal deficit but the biggest issue the national economy was facing was that it was a victim of elite capture of economic policies. “Those with good relations turn out to be successful businessman while those making innovations and taking risks are not so successful,” he said. Digitization could become a component towards bringing about fundamental transformation in country’s economy and would be beneficial for those offering innovations.
SBP representatives also gave a detailed briefing about the IMEs regulations, its licensing procedures, limits of e-money instruments and and other requirements during the launching ceremony.
The importance of state-of-the-art investments in cyber security was also emphasised during the meeting. “As we move towards this digital economy, if even a single or two cases of data-hacking are witnessed, it would retard years of development,” said the finance minister.
Speaking at the event, Deputy Governor SBP Jameel Ahmed said that the drafting of the regulation was a challenging task which has been accomplished with the help of different stakeholders and the World Bank. He said that technological advancements have given rise to a platform economy, adding that there were around 157 cellular subscribers with 75 percent teledensity in Pakistan.
He said that SBP was currently working on issuing digital currency by year 2025 to promote financial inclusion, and reduce inefficiency and corruption. The deputy governor stated at the SBP was committed to adopt evolving-realities of time, and by year 2030 the bank would be fully digitized and technology-equipped.