ISLAMABAD – The State Bank of Pakistan has said that Roshan Digital Accounts (RDA) would be further improved, as the central bank would introduce more services and products under RDA.
The SBP would introduce new services and products under RDA. The SBP would launch insurance product with the help of banks and it is working on pension plan. The central bank would also open RDA like accounts for the entities, which are owned by Non Resident Pakistanis (NRPs). The SBP would further improve the RDA services under RDA 2.0. “It (RDA) is a permanent feature and regulator is here to support this,” said Syed Ali Raza, Senior Joint Director, digital, innovation and settlement department of the State Bank of Pakistan, in SBP podcast. He rejected the rumors about withdrawal of money from the RDA after change in government in April this year.
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The RDA initiative was rolled out in September 2020 allowing NRPs access to the Pakistani financial market. IT was further augmented by investment and consumer products such as Naya Pakistan Certificate, Roshan Apni Car etc. on attractive rates. As of June 2022, approx. 429,364 Roshan Digital Accounts have been opened with an inflow of $4.6b out of which $2.9b were invested in NPC.
The official informed that 65 percent ($2.987 billion) of the RDA inflow investment is in Naya Pakistan Certificates. Meanwhile, $40 million investment is made in stock exchange and remaining has invested in properties and purchase of cars.
As many as 1550 Non Resident Pakistanis (NRPs) have purchased cars for their families under ‘Roshan Apni Car’ scheme. Naya Pakistan Certificates are especially offered by the government to the expatriates at a very attractive rate of return from 5-7 percent in US dollar, which is one best in the world. He informed that there is no proposal to change the rate of return in dollar.
However, the government might change the rate in Pakistani rupee, which is currently 11 percent. He informed that out of total inflows, some $800 million have been repatriated by RDA holders in the last 22 months since the start of RDA in Sep 2020 to meet their personal needs in their countries of residence.
He informed that commercial banks operating in Pakistan are working with the State Bank of Pakistan for RDA.
According to the SBP official, the incumbent government has also owned the RDA, which was initiated in previous government’s tenure. There is full support of the government for RDA. Prime Minister and finance minister had tweeted that RDA is here to stay. He said that there is legal cover for RDA and its nature could not be changed.
The official said that SBP had conducted a survey for RDA in March this year. He further said that 10,000 people had responded to the survey from 116 countries. Around, 70 percent of the respondents of the survey had expressed satisfaction over the RDA, especially Roshan Apna Ghar and Roshan Apni Car.
However, some of the people expressed concerns over the complaint management process, which should be automotive. The SBP has formulated portal of Sunwai and mobile App for addressal of complaints.
It is pertinent to mention that the total inflows through RDA do not remain in accounts but are invested in augmented RDA products or either consumed in Pakistan. Approximately, only $500m remain in the accounts. Further, the opinion that SBP is masking the actual data of inflows to RDA is also not true.
Only those inflows are considered fresh, which arrive from abroad while the rumor that NPCs on maturity are considered as fresh inflows is incorrect.
The apprehension that there have been large outflows from RDA is very misleading and far from reality. There have been outflows, however, these were due to the maturity of investments in NPCs which started in early 2021 and the repatriation of these funds is a key feature of RDA around which the product was designed to garner confidence in the public.
Another reason for the outflows is rising inflation due to which people are accessing their savings to make ends meet. During the last 23 months only $800mn have been repatriated. RDA has a legal cover under “Foreign Currency Deposit Protection Ordinance 2001” and State Bank of Pakistan also firmly stands by their RDA initiative. It is here to stay.
