State Bank advocates fast-paced digitalisation

Insists it will help reduce informal economy, increase tax receipts

KARACHI:

The State Bank of Pakistan (SBP) has urged commercial banks and technology firms to join hands to accelerate the adoption of digital mode of payments to reduce the size of informal economy, increase tax collection and support economic growth.

“We say we are against cash transactions. However, our actions speak otherwise,” said Syed Irfan Ali, Managing Director, Deposit Protection Corporation, SBP, at the “Future Banking Summit 2022” on Thursday.

“World is changing. It is going digital. If we do not accept the change, we will remain where we are today.”

Economic sanctions on Iran and India’s desire to check corruption and eradicate black economy have transformed them into digital economies, pointed out Ali.

“Pakistan has two options for speeding up transformation towards a digital economy – either to do what India did (which abruptly changed currency, remained in pain and it took around two years to achieve success) or accelerate the evolution…through collaboration,” he suggested.

Ali stressed the need for increasing collaboration among stakeholders, including the regulator (central bank), to achieve the goal of transforming Pakistan into a digital economy sooner rather than later, according to a statement issued by summit organisers.

Financial Action Task Force’s (FATF) grey listing of Pakistan has transformed the country. “Luckily, we are not on the blacklist. We have just transformed…We will hopefully be removed soon from the grey list (to white list).”

Ali cited the introduction of Raast – a mode of fast-track digital payments – and Roshan Digital Account (RDA) for overseas Pakistanis as the two world-class examples of digitalisation of Pakistan’s economy.

“Inflows from overseas Pakistanis through the RDA have surpassed $5 billion last week. Non-resident Pakistanis are remitting on an average $250 million a month through their digital accounts,” he said.

Published in The Express Tribune, September 16^th, 2022.

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