Government uses more than half of Roshan Digital Account inflows
By the end of December 2024, Pakistan had utilized 63% of the inflows received through the Roshan Digital Account (RDA), according to a report by the State Bank of Pakistan (SBP). Since its launch on September 10, 2020, RDA inflows have totaled over $9.34 billion, of which $5.911 billion have been used, as per SBP data.
The RDA inflows have been crucial for the government, especially as it awaited a $1 billion tranche from the International Monetary Fund (IMF). In 2024 alone, the government received over $2 billion through RDA, utilizing $1.345 billion of it.
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The RDA, developed in collaboration with commercial banks, offers Non-Resident Pakistanis (NRPs) the ability to open and manage bank accounts in Pakistan digitally. These accounts facilitate banking, payments, investments, and remittances to Pakistan.
In 2024, Pakistan received $9.3 billion via RDA, marking a 33% increase in remittances during the first half of FY25. This surge is expected to help meet the trade deficit and maintain a surplus in the current account for FY25. However, foreign direct investment (FDI) remains sluggish, with inflows totaling only $1.1 billion in the first five months of FY25.
The RDA's appeal lies in its fully digital account-opening process, eliminating the need for NRPs to visit banks, embassies, or consulates. Since its inception, $1.7 billion has been repatriated through RDA, while $1.73 billion remains pending. By the end of 2024, the number of RDA accounts had reached 778,713, indicating growing interest from overseas Pakistanis.
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Bankers noted that RDA inflows in 2024 exceeded those of the previous year, attributing this to the stability of the exchange rate, which held steady at Rs278 per dollar for over a year. Despite the increased remittances and improved exports, RDA and FDI inflows were insufficient to cover Pakistan’s external debt repayments without assistance from the IMF and friendly nations.
Bankers acknowledged RDA as a valuable source of foreign exchange for the government but pointed out that overseas Pakistanis remain hesitant to invest in other financial products or sectors, largely due to political instability. They also noted that while RDA provided a significant boost, it could not replace domestic bonds, which have lost their appeal to foreign investors since 2020 for various reasons.
Source: Dawn