| Welcome to Global Village Space

Wednesday, April 17, 2024

Has the economy been thrown away?

The inflows under RDA witnessed a decline of almost 25 percent in July with inflows standing at $188 million — a much lower number than June.

Since the coalition government took charge in April, deposits in Roshan Digital Accounts (RDAs) from overseas Pakistanis are at a declining trend.

The inflows under RDA witnessed a decline of almost 25 percent in July with inflows standing at $188 million — a much lower number than June. According to official data, the deposits under the RDAs registered inflows of $188 million in July 2022, as compared to $250 million in June, which depicts a month-on-month decrease of 24.8 percent.

Read more: Record remittances received in Roshan Digital Account

As soon as Imran Khan lost vote of No Confidence and the coalition government took charge in April 2022, huge withdrawals from RDAs by overseas Pakistanis became the news of the town. The act reflected lack of trust in the new government by overseas Pakistanis.

As a response to the wide spreading news, the State Bank of Pakistan (SBP) came out and refuted news about large withdrawals from Roshan Digital Accounts (RDA) following Imran Khan being voted out of the National Assembly. “RDA inflows are growing, and total inflows have now surpassed the $4 billion mark in April,” SBP said.

However, there were plenty of posts on social media regarding withdrawal of funds from RDA or withholding remittances as a form of protest against the no confidence vote against Prime Minister Imran Khan.

On the other hand, prior to the whole vote of no confidence episode, the SBP had been vigilant about the declining pace of accounts and inflows.

Roshan Digital Account is a major initiative of State Bank of Pakistan, in collaboration with commercial banks operating in Pakistan. These accounts provide innovative banking solutions for millions of Non-Resident Pakistanis (NRPs), including Non-Resident Pakistan Origin Card (POC) holders, seeking to undertake banking, payment, and investment activities in Pakistan.

The initiative was launched in September 2020 by the SBP and offered up to 7 percent profit on US dollar investment.

Former Minister of State for Parliamentary Affairs and an internationally renowned investment banker Mir Mohammad Ali Khan shared on Twitter about the performance of current government with regards to RDA deposits and economic growth. “Where have you thrown the economy?” he said.

The National Assembly of Pakistan passed the Elections (Amendment) Bill 2022 in May which seeks to remove the use of electronic voting machines (EVMs) in general elections as well as disallows overseas Pakistanis from voting electronically.

Despite taking the voting rights away, government is attempting to increase deposits in RDAs. On 27th August, State Bank of Pakistan (SBP) held a webinar on RDA where Pakistan’s notable banking leaders, experts and shariah scholars discussed the importance and benefits of RDA.

Read more: Overseas Pakistanis: Hail, the new Kingmakers

On the other side, Finance Minister Miftah Ismail expects the economy to grow by more than 3.5 percent this fiscal year, down from a 5 percent initial projection.

On account of serious economic challenges and flash floods, the federal government is expected to revise GDP targets.