Govt plans to issue debit cards for PSEs

The government has decided to issue debit and credit cards for public sector enterprises (PSEs) in a bid to address petty cash and imprest money issues of these state units.

Sources revealed to The Express Tribune that the issue was taken up at a recent high-level meeting, chaired by Prime Minister Shehbaz Sharif.

Meeting participants agreed that debit cards, rather than credit cards, should be used to meet petty cash and imprest money requirements of the PSEs, including the ministries, divisions, state-owned enterprises and other government departments.

The meeting was informed that the government had formed a committee, led by the Finance Division, which was evaluating the integration of a card payment system into government services.

The committee will review the existing payment procedures, proposed debit card payment processes, advantages and disadvantages, and regulatory requirements, and is expected to come up with a comprehensive report. This document will be shared with the prime minister for a formal decision.

Sources said that the issue was also taken up for discussion at a meeting of the Special Investment Facilitation Council (SIFC). All participants agreed to introduce the system to facilitate the immediate cash needs of state-owned enterprises.

During the meeting, the prime minister was informed that the government was working to explore mechanisms for the securitisation of remittances and currency stabilisation. In an effort to enhance the securitisation of remittances, the government was looking to establish effective mechanisms to incentivise the use of formal banking channels for the inflow and outflow of foreign exchange.

Recommendations for a future framework aimed at currency stabilisation were also being developed, sources said. At present, the informal channels for foreign currency flows are still working. Hawala and Hundi are one of the popular informal channels being utilised even by the overseas Pakistanis to send money back home.

The government wants to shut down such informal channels by promoting the formal networks through incentives. According to sources, the government is also working to restore the cash-over-counter facility.

The Finance Division is set to form a working group comprising the Ministry of Commerce, the State Bank of Pakistan and the Federal Board of Revenue to ensure the restoration of cash-over-counter facility at the National Bank of Pakistan (NBP) branches and booths at border crossings. The group will identify the underlying issues and provide updates at the next Economic Coordination Committee (ECC) meeting with a report due within two weeks.