Tuesday, June 18, 2024
Editor's PickPakistan’s fintech success spurring new products and bolstering foreign exchange reserves

Pakistan’s fintech success spurring new products and bolstering foreign exchange reserves

Pakistan’s 2020 ambitious digital initiative — the Roshan Digital Account (RDA) — to usher in Islamic and conventional investments into the country from its diaspora is exhibiting promising success, spinning off new fintech-enabled instruments.

The RDA is spearheaded by the State Bank of Pakistan (SBP) enabling non-resident Pakistanis (NRPs) to undertake banking services including transferring funds and making payments as well as investment activities, including investing into Naya Pakistan Certificates which are sovereign investment papers — Islamic and conventional — reserved for the qualified diaspora. Such a digital undertaking was the nation’s first. In April, Prime Minister Imran Khan confirmed that RDA deposits exceeded the US$1 billion threshold.

Growing community

The initiative was rolled out in collaboration with a number of banks including the country’s largest Islamic financier, Meezan Bank, as well as the likes of Bank Alfalah, Faysal Bank, Habib Bank and Standard Chartered. Just this month, the Bank of Punjab (BOP) secured SBP’s approval to also begin offering the account, at no cost. It is the first bank in the Islamic Republic to offer the service for free.

“This will help attract small depositors who were keeping away from [the] RDA on account of associated operating costs,” BOP explained. “BOP customers will avail various services without any charges as BOP’s RDA offers conventional and Islamic banking accounts with no minimum balance requirement.” The account is also complemented with a mobile app enabling lifestyle banking facilities.

Growing success

Since its launch last September, the takeup for the RDA has grown from strength to strength. In the first five months, it attracted US$500 million in deposits; the pace more than doubled as it hit the US$1 billion mark in the subsequent two months. Over 120,000 RDAs have been opened from 170 countries.

According to SBP Governor Dr Reza Baqir, these deposits are a new source of foreign exchange inflows to bolster Pakistan’s foreign exchange reserves and balance of payments position.

Growing range

The phenomenal success of the RDA has paved the way for new products: Roshan Apni Car and Roshan Samaaji Khidmat.

Roshan Apni Car is a car financing scheme, available both in conventional and Islamic formats, that can be obtained completely online by RDA holders on behalf of their loved ones.

Roshan Samaaji Khidmat enables NRPs to meet their Zakat obligations as well as to make donations to charities, hospitals and educational institutions. This service is also integrated with Ehsaas, the government’s flagship poverty alleviation program.


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