A great success
Pakistan will get up to $1.5 billion investments through the latest initiative of the Government of Pakistan and the central bank
Roshan Digital Account has become a great successful initiative after attracting more than 100,000 digital accounts in over 100 countries across the world since its launch in September last year.
The bankers, analysts and experts are confident of its growing demand and popularity among non-resident Pakistanis in the coming months and said the central bank and the government should address the complaints of account holders on a priority basis and ensure transparency in the programme.
They said Pakistan is expected to receive up to $1.5 billion foreign currency inflows through the Roshan Digital Accounts this year as overseas Pakistanis pose trust in the central bank's initiative.
"The initiative has potential to grow manifold in coming years and may become the third major source of earning foreign exchange after remittances and exports as foreign direct investment is yet to pick up the momentum," bankers said.
SBP role is vital
The RDA, a joint initiative of the State Bank of Pakistan (SBP) and the Government of Pakistan, facilitate overseas Pakistanis for sending remittances through official channels as well as offering them investment opportunities in the country.
Prime Minister Imran Khan inaugurated the RDA service on September 10, 2020. Initially, eight commercial banks operating in Pakistan were part of the programme. Later, more banks have joined the initiative to facilitate the overseas Pakistani community.
"Roshan Digital Account has just crossed 100,000 accounts. They have been opened from 100 countries around the world. Deposits have reached $671 million, with half of these coming in the last eight weeks alone," the SBP tweeted last week.
According to the central bank, the growing popularity of accounts among non-resident Pakistanis across the globe indicates the increasing reach of the RDA and helping the government and the SBP improve the external account of the country.
UAE, Saudi Arabia hold key
In a video message on the occasion of the Roshan Pakistan Digital Account's ceremony organised under Dubai Islamic Bank, SBP Governor SBP Dr Reza Baqir termed RDA as a successful project and said that overseas Pakistanis can now invest in Euro and British pounds in addition to US dollars.
"The overseas Pakistanis are now provided with an opportunity of better profits over investments through these digital accounts, which are more popular in Middle East countries than in any other part of the world," Baqir said.
Dr Murtaza Syed, deputy governor at the central bank, said that RDA is more popular in the UAE and Saudi Arabia.
Under the initiative, the Pakistani diaspora could be able to avail the banking facility from a digital payment system and the consumers would be able to open their bank accounts without visiting a bank, embassy or consulate.
A beneficial project for all
The major objective of the RDA is to attract millions of Pakistanis living abroad by offering much higher returns on deposits than those in developed economies.
"The account offers digital banking facilities, domestic funds transfer, utility bills and tuition fee payment in Pakistan, as well as investments in government bills, stock exchange and real estate with an option of full repatriation," Hamid Ali, a senior banker, told Khaleej Times recently.
He said the RDA is going to be the third major source of foreign currency inflows into the country after rising remittances and steady exports.
Overseas Pakistanis have been providing a large amount of foreign exchange in terms of remittances and now the RDA has attracted $671 million so far. At the same time, long-term domestic Pakistan Investment Bonds attracted only $150 million foreign investment over the past four months.
"Most of the RDA inflows are credited to Naya Pakistan Certificates, which offer up to seven per cent profit in dollar accounts and 11 per cent per annum in local currency if the investment is made for five years," Ali said.
"With the current account surplus and 24 per cent increase in remittances, over nine million overseas Pakistanis are confident about the country's economic future and they are likely to open more RDA accounts and invest in Naya Pakistan Certificates," he added.
Another foreign earnings source
Experts said the country may receive a sizeable investment through the RDA if inflows continued with the current pace.
"I'm confident the country will cross $1 billion investment through the RDA by June and another $500 million will be added by December. The RDA is likely to receive up to $1.5 billion investment from overseas Pakistanis this year," Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, told Khaleej Times last week.
To a question, he said the RDA is gaining popularity among non-resident Pakistanis due to multiple reasons.
"This initiative offers ease of payment facility for utility bills, school fees, local transfer of accounts and better returns on Naya Pakistan Certificates. These are some of the basic facilities overseas Pakistanis are looking for to help out their families while working abroad and at the same time saving some money for their future as well," Tariq added.
Shahbaz Ahmad, a resident of Dubai, said RDA is a good initiative and offers great help to overseas Pakistanis.
"Now, I can pay the utility bills through the RDA and help my aged parents while doing my job abroad," he said.
"I found this initiative very useful ad not only does it give me options in savings and investments in multiple currencies, but also offers services such as school fees, funds transfers and utility payments," he said.
Ensure transparency, makes data public
Experts said the central bank has launched an RDA programme as a challenge and worked round the clock with all the stakeholders such as Pakistani diplomatic missions abroad, expatriates forums, business groups and commercial banks to make this product work. They said the central bank should expand the scope of RDA and address the complaints of RDA account holders in real-time to retain their trust and confidence.
"The SBP should bring more banks into the RDA network and should have round the clock vigilance to monitor the account holders complaints. We may see some concerns even on social media platforms of the central bank, they said.
Another official at a business group in Dubai said overseas Pakistanis demand more transparency and granularity in data.
"The central bank should introduce a mechanism to ensure transparency in RDA. It should start making details public or update on the SBP website in real-time to retain the confidence of non-resident Pakistanis in general and businessmen and investors in particular," he said.
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