The news: State Bank of Pakistan (SBP) Governor Dr. Reza Baqir has announced that overseas Pakistanis will now be able to operate digital bank accounts in Pakistan while residing in a foreign country. The State Bank has taken this initiative with an aim to attract investment from the overseas community and bolster foreign exchange reserves.
Benefitting millions: According to Dr. Baqir, this facility of digitally operating bank accounts can benefit over nine million non-resident Pakistanis. Named ‘Roshan Digital Accounts,’ it will be available to the diaspora next week, allowing them to invest money in local stock markets, buy government bonds and securities, and access basic banking services. The SBP Governor also informed that at least eight Pakistani banks will currently be facilitating the Roshan Digital Accounts. Overseas Pakistanis with a Roshan Digital Account will be able to deposit funds in either the US dollars or Pakistani rupees.
Debt certificates: Moreover, the government is also expected to launch debt certificates with at least five different maturity periods and 5-7% and 9-11% returns on the dollar and rupee denominated ones, respectively. Dr. Baqir acknowledged that the overseas community of Pakistanis constitutes a large number of individuals and most of them are outside the record of Pakistan’s financial system. He said that Pakistan is one of the few countries in the region that have provided their diaspora with access to digital banking in the country. He also addressed the building of confidence in this digital system among Pakistani citizens and emphasized on the short tenor, saying that if somebody wants to dip their toes, test the system and take money out, the State Bank would want people to do it because that’s the only way they will get confidence.
Digital access: The new digital banking access can prove to be convenient for overseas Pakistanis. This is because earlier a non-resident would have had to visit the consulate or embassy to open a bank account, and direct access to the Pakistan Stock Exchange was not allowed. For Pakistan, remittances from its diaspora can be the key to its economy, given that the revenue from its exports last year was just $2 billion less than the $23 billion that poured in the same period, ending June. Dr. Baqir explained that Pakistan has been seeing a very noticeable improvement on the economic front, both domestically and in terms of exports. He remains optimistic that the improvement will sustain.