RDA inflows reach $2.114bln in 11 months

KARACHI: Foreign exchange inflows through Roshan Digital Account (RDA) reached $2.114 billion in 11 months, helping strengthen the country’s external sector.

RDA has connected 220,806 expatriate Pakistanis with the country’s banking system since its launch in September last year.

Inflows in August amounted to $245 million dollars, compared with $307 million in the previous month, according to the figures from a brokerage house on Tuesday.

Nearly 2,114 fresh accounts were opened in the month of August.

RDA is a landmark initiative of the State Bank which seamlessly connects the Pakistani diaspora to the Pakistani financial system and economy. For the first time, it allows overseas Pakistanis to open a bank account in Pakistan in a completely digital manner, without needing to visit any bank branch or embassy.

The tax treatment is simple, freeing overseas Pakistanis from the need to file a tax return in Pakistan on income derived from investments through the account.

Importantly, the account is fully repatriable, giving overseas Pakistanis the comfort of being able to remit the money in their accounts back to where they live without any difficulty.

During September 2020 to August 2021, total investments made through RDA stood at $1.5 billion of which $869 million were invested in Conventional Naya Pakistan Certificates (NPCs), $606 million in Islamic NPCs and remaining $21million in stocks, showed a data by Arif Habib Limited.

The Economic Coordination Committee (ECC) of the cabinet had month approved a budgeted subsidy of Rs13.103 billion for this current fiscal year for a reward scheme to sustain foreign remittances at last fiscal year’s record of $29.4 billion and made RDAs part of the subsidy scheme. The RDA transfers remain in bank accounts rather than being invested in government debt at up to seven percent interest rate and will entail reward subsidies.

The government also introduced Roshan Apna Ghar that would facilitate overseas Pakistanis to buy a house for themselves and/or their families in Pakistan, which has been quite difficult for many of them due to host of manual procedures, mandatory physical visits to Pakistan with long stay to complete the process and the hassle of trips to many offices.

The government expects both NPCs and the Roshan Apna Ghar to help achieve the greater goal of attracting investments by overseas Pakistanis, which are more sustainable and reliable. The government with the help of State Bank plans to introduce new avenues of investments for overseas Pakistanis.