RDA gains momentum

The Roshan Digital Account (RDA) scheme launched on 10th September 2020 gains pace as it receives $500 in just 5 months.

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State Bank’s latest initiative Roshan Digital Accounts (RDA’s), in collaboration with commercial banks operating in Pakistan, launched on September 10, 2020 has managed to captivate the attention of the overseas Pakistanis by offering much higher returns on deposits compared to the returns in developed economies. Remittances worth $250 million were received in the first 14 weeks and the inflows increased twofold in the next six weeks to cross $500 million.

SBP is expecting for the inflows to reach $1.5 billion by the end of one year; and $2 billion by Dec 2021 doesn’t seem impossible either.

The RDA’s were basically introduced to allow Non-Resident Pakistanis (NRPs) to partake in banking, payment and investment activities in Pakistan without being physically present in the country. Through RDA’s, NRP’s can now have access to online banking, domestic funds transfer, payment of utility bills and tuition fees. Moreover, they can also invest in government bills, stock exchange, and real estate sector with the option of full repatriation. This new banking solution aims to encourage Pakistanis living abroad to invest in their own country and help elevate the nation’s economy.

Though the incumbent government has been making concentrated efforts to attract foreign currency by introducing different schemes for the diaspora, none of them have been able to garner such a response. In 2019, the Pakistan Banao Certificate was launched which failed to yield desirable results as there was no groundwork or marketing involved.

For the first time savings of expats are being tapped through RDA. The flagship product of the RDA scheme is Naya Pakistan Savings Certificate (NPC) which aims to boost the country’s economy by attracting foreign investments.

Read More: Roshan Digital Accounts (RDA’s) receive $400m in 4 months

NPC are high-interest yielding sovereign investment certificates issued by the State Bank of Pakistan (SBP) for Foreign Currency Value Account holders (FCVA) and Pakistani Rupee Value Account holders (NRVA). They offer lucrative risk-free returns for the investors over different maturities and are also presenting the NRP’s with an opportunity to play their part in the development of a progressive Pakistan. NPCs offer attractive risk-free returns over different maturities. The buyers can own the certificate in US dollar with the highest interest rate of 7pc and in Pak rupees with the highest rate of 11pc per annum provided the investment is made for 5 years.

RDA- A Growth Opportunity for Banks

The commercial banks operating in Pakistan have also realized that they need to cash the opportunity that the government has provided them with by launching RDA. There are currently 9 million expats around the world that require the services of local banks and therefore, few of the banks have started working on their marketing strategies to capture the interests of the Overseas Pakistanis.  At the start of the scheme, 8 banks were doing it and two more banks have recently jumped on the bandwagon. To-date, around 88,000 accounts have been opened from 97 countries.

Another reason for the rapid increase in inflows is the two-way communication between SBP and the expats. SBP and the banks kept engaging with the expats to understand the challenges that they were facing with regards to the RDA scheme.

In the early days, the expats were not happy with the tax rates and there were issues relating to account opening from the banks’ side. There was also no option of NPC in Islamic mood. However, all these issues have been addressed by SBP.

Since the finalization of the 10 percent tax rate (WHT) with no requirement for expats to file returns and the launch of the Shariah compliant NPC, the inflows have sped up. Apart from the NPC, the expats are also keen on investing in Pakistan stock market. Banks are looking for raking in the inflows by providing lending options.

According to financial analysts, the inflows till now have been extremely encouraging and can be a good substitute for hot money. They could also increase in the second half of the current fiscal FY21, if the current account remains surplus with an improved foreign exchange reserve, they believe.


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