Pakistan's
banking sector unites to propel digital economy growth
Pakistan's
banking sector is rallying together to bolster the digital economy. A recent
meeting between Federal Minister for Finance and Revenue, Mohammad Aurangzeb,
and a delegation from the Pakistan Banks’ Association (PBA) has paved the way
for enhanced support in three pivotal areas: Small and Medium Enterprises
(SMEs), Agriculture, and the Digital & Technology sector.
Minister
Aurangzeb emphasized a collaborative approach, eschewing "directed
lending" and instead advocating for voluntary targets set between banks
and the State Bank of Pakistan (SBP), the country’s central bank. This
collaborative strategy ensures that banks contribute to these vital sectors
based on their capacities, expertise, and existing services.
Financial
inclusion stands out as a top priority. Recommendations include leveraging
technology to streamline targeted subsidies for subsistence-level farmers,
drawing inspiration from the successful Benazir Income Support Programme
(BISP). This initiative seeks to bridge the gap between marginalized
communities and financial services.
The
meeting underscored the banking sector’s dedication to supporting existing
institutions like the Small and Medium Enterprises Development Authority
(SMEDA) and the National Credit Guarantee Company Limited (NCGCL). Banks will
actively provide financial and managerial assistance to these organizations,
empowering SMEs further. Additionally, proposed measures such as revising SME
Prudential Regulations, enhancing clean financing limits, and reviewing regulatory
retail portfolio limits aim to facilitate easier access to funding for small
businesses.
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Significant
attention was also devoted to the digital and technology sectors. The PBA
proposed measures to facilitate retail foreign investment through innovative solutions
like digital micro sukuks (Islamic financial certificates) and infrastructure
bonds. Other initiatives include integrating freelancers into payment gateways
and establishing dedicated online portals for overseas remittances to boost
digital participation in the economy.
Currently,
banks utilize various technological tools for internal operations.
Recommendations suggest extending these products and services to the public,
potentially unlocking new export opportunities and revenue streams. Moreover, leveraging
technology to improve documentation within the economy stands as another
pivotal area where banks can make a substantial impact.
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Minister
Aurangzeb commended the PBA’s initiatives and stressed the crucial role banks
play in propelling economic development. He endorsed the proposed governance
structure, which involves collaboration between the PBA, SBP, and the Ministry
of Finance and Revenue, ensuring clear direction and efficient implementation
of the recommendations.
PBA
Chairman, Zafar Masud, reiterated the commitment to working closely with the
government and the SBP. With combined efforts, Pakistan's banking sector is
poised to emerge as a potent catalyst for growth in SMEs, agriculture, and the
digital & technology sectors, thereby fostering a more prosperous Pakistan.
Source:
https://www.phoneworld.com.pk/