The RDA investment

Published February 4, 2021

OVERSEAS Pakistanis are responding generously to the new initiative, Roshan Digital Accounts, launched by the State Bank in September in order to attract the diaspora to invest their savings in their country’s development. According to the State Bank, some 80,000 non-resident Pakistanis have already opened accounts, transferring their savings of approximately $400m from their respective countries of residence to the country of their origin. Their numbers continue to grow. Many may attribute the initial success of the initiative to the lucrative returns being offered to non-resident Pakistanis on their RDA deposits compared to the nearly zero per cent return they are getting in the host countries. Indeed, the rewarding returns must have played a major role in convincing the diaspora to open these accounts. But that is only one factor.

The entire RDA regime has been designed intelligently, keeping in view the needs of Pakistanis working abroad. These accounts, for example, allow their owners freedom to move their savings in and out of Pakistan — effortlessly — by clicking on their mobile devices from anywhere in the world. The account holders can also easily invest their money in real estate, stock market and government papers through the Central Depository Company. Moreover, the ease of opening these accounts in both Islamic and conventional banks within 48 hours in Pakistani and other eligible international currencies is an added incentive. Non-resident citizens of China and India have played a crucial role in the economic progress of their home country in recent decades. Overseas Pakistanis too have been contributing a great deal to the stability of the nation’s external account by sending home large remittances equal to our annual exports. Nonetheless, the bulk of the money sent back by them has gone into consumption or speculative investments with no channel available for them to bring home their savings owing to the unavailability of an official mechanism to repatriate their money when needed. The RDA initiative has provided them with that channel and they are responding to it as expected.

Published in Dawn, February 4th, 2021

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