THERE are two broad categories of foreign currency accounts in Pakistan. The latest category of forex accounts is the Roshan Digital Account (RDA) that was introduced in 2020. The other category of foreign currency accounts was intro-duced a long time ago, in 1974, and is still active.

Both these categories are mainly for overseas Pakistani workers to facilitate their home remittances. However, there is a serious discrimination between int-erest rates on these two categories of forex accounts.

The interest rate on RDA is nine per cent per annum, whereas the interest rate is 1pc on the other category of foreign currency accounts. This discriminatory policy, I believe, has been introduced by the State Bank of Pakistan (SBP) for reasons known to itself alone. I cannot understand why SBP is practising this discriminatory policy, whereas the value of dollar remains the same whether it is deposited in an RDA or in an ordinary foreign currency account.

Currently, I have both categories of foreign accounts functional in Pakistan. Since I am getting just around 1pc on the amount in my ordinary foreign currency account, I decided to transfer the balance of this account to my RDA so that I could get the higher interest rate. However, I was told by my bank in Pakistan that the SBP does not allow transfer of funds from an ordinary foreign currency accounts to RDA. What is the logic behind such a decision? The bank says it does not know.

The SBP and the Ministry of Finance should review the matter urgently so that overseas Pakistanis may get higher interest rate on their foreign-earned, remitted funds that are parked locally.

Ejaz Ahmad Magoon
Dubai, UAE

Published in Dawn, October 22th, 2024