Roshan Digital Account: Inflows down, clock in at $146mn in October

Inflows under the Roshan Digital Accounts (RDA) decreased 13% month-on-month to $146 million in October, down from $168 million in September 2022 and the lowest since December 2020.

Cumulative inflows hit $5.3 billion at the end of October, 26 months since the programme was launched, according to data released by the State Bank of Pakistan (SBP) on Monday.

Out of the overall $5.295 billion deposited in RDAs, $3.344 billion or almost 63.15% have been invested in Naya Pakistan Certificates (NPCs), data shows. Of this, $1,722 million have been invested in conventional NPCs, whereas $1,622 million have been invested in Islamic NPCs.

Just $46 million, or less than 1%, has made its way into the Pakistan Stock Exchange (PSX).

“State Bank of Pakistan needs to raise rates on USD-denominated NPC, if this funding source has to be exploited,” said Ismail Iqbal Securities Limited in a note.

“When NPC rates were initially decided the spread of one year (1Y) NPC over 1Y US treasury and 1Y LIBOR (London Inter-Bank Offered Rate), was around 6%. Now, it is less than 2%,” it added.

Roshan Digital Account: Inflows clock in $5.14bn in 25 months

Overseas Pakistanis from 175 countries have so far opened some 485,873 accounts under RDA. On a monthly basis, the number of accounts opened increased by 3%.

The RDA is an initiative of the State Bank, in collaboration with commercial banks in Pakistan, to provide innovative banking solutions to NRPs, including Non-Resident Pakistan Origin Card (POC) holders, seeking to undertake banking, payment and investment activities in the country.

This is the first time in Pakistan’s history that non-resident Pakistanis (NRPs) are being provided an opportunity to remotely open an account in Pakistan through an entirely digital and online process without any need to visit a bank branch.

The initiative was launched in September 2020 by the SBP and offered up to 7% profit on US dollar investment.

Last week, the central bank launched the Roshan Equity Investment (REI), a product offered to NRPs under the umbrella of RDA.

The REI account allows investors the benefit of investing in the local stock market just as they are able to avail the facilities of car financing, house financing and purchase of government bonds through their RDAs.