Foreign exchange inflows into the RDAs reach $3.6 billion in 18 months

KARACHI: Inflows under Roshan Digital Accounts, a facility that provides banking solutions to Pakistanis abroad, amounted to $3.6 billion from September 2020 to February 2021, central bank data showed on Monday.

Expats opened 365,182 accounts in 175 countries, showing that an increased number of Non-Resident Pakistanis (NRPs) sent funds through this program. These digital counts stood at 342,611 at the end of January.

The investment programs offered under the RDA, known as Naya Pakistan Certificates (NPC), offer attractive rates in both rupee and common foreign currencies such as US dollar, pound and euro.

The SBP data also showed that a significant amount of GDR funds were invested in both NPCs and the capital market. From September 2020 to the end of February 2022, total investment in NPCs was $2.5 billion, including $1.3 billion invested in conventional NPCs and $1.1 billion in compliant instruments in Sharia. Expats have invested $35 million in the stock market. Digitally onboarding the Pakistani Diaspora helps them to save and invest in Pakistan by addressing the issues on multiple fronts including extreme ease of engaging with the formal banking system in Pakistan with great comfort. In addition, Pakistanis living abroad also help the economy by sending their money to Pakistan under RDA. These inflows are also helping to build up the country’s foreign exchange reserves at a time when the country is struggling with a high current account deficit due to rising imports caused by soaring world prices for oil and other commodities.

After receiving a good response from the NRPs, the SBP in April 2021 allowed overseas Pakistanis to purchase cars through their RDAs, under the Roshan Apni Car scheme. Under this scheme, banks offer both lien and non-lien loans to RDA holders, and car assemblers claim to deliver cars to RDA holders on a priority basis.

Under lien-based financing, the bank has a lien on the GDR funds or the depositor’s NOC holdings; as such, these loans are available at comparatively lower rates. In addition, fixed rate and variable rate loans are offered to facilitate clients with varying risk appetites. Additionally, non-residents can now apply for housing finance (under Roshan Apna Ghar) and deposit funds in RDAs through money transfer operators such as Western Union and MoneyGram.

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