KARACHI: The State Bank of Pakistan (SBP) plans to issue licenses to digital-only banks in the coming months to modernize and strengthen the country’s financial sector, a senior official said on Wednesday.
“We have taken a number of measures to increase digital financial services in the country and one of them is to set up digital-only banks,” Sima Kamil, the central bank’s deputy governor, told Arab News in an exclusive interview on the sidelines of an event, “Ensuring Sustainable Growth and Promoting Digitization,” at the SBP headquarters.
Kamil said the process to start awarding licenses would begin in the next couple of months, adding that the authorities would also consider overseas applicants.
“We have launched a consultative framework and invited opinions,” she continued. “The framework will be announced in the next couple of months and people will be able to apply for licenses to launch digital-only banks.”
Kamil said she expected about eight digital-only banks to emerge in the country after the completion of the process.
“Depending upon the number of applications, we expect to issue licenses to about five to eight banks,” she informed.
Pakistan launched its first state-of-the-art digital payment system, Raast, earlier this year which enabled individuals, businesses and government entities to make instant payments. The system has been active in 30 banks since January 2021.
“Digitization is very important in any economy today,” said the SBP deputy governor. “Unless we effectively digitize, we will not have financial inclusion and documentation.”
She informed it would also become possible to operate the country’s existing digital payment system by using cellphone numbers in the future.
“In the existing system, you need to know the account details of an individual or entity before you can make a digital payment,” she explained. “Soon it will be possible for people, however, to mention a mobile phone number to their bank which can become their alias identity. The financial transactions could then be done using these contact numbers.”
According to the country’s central bank, Pakistan has had low electronic transactions due to limited banking penetration, lack of trust and awareness of digital payment methods and high cost of transactions.
However, SBP Governor Dr. Reza Baqir told an event on Wednesday that “no country can make economic progress unless it aggressively moves toward digitization.”
Baqir also touched upon current economic trends and measures taken by the central bank to stabilize Pakistan’s exchange rate, economic growth and current account deficit.
The SBP governor maintained the current account balance was manageable and there was no need to worry about it.
“There are three things that are worrisome for any economy’s current account: no movement in exchange rates, high level of current account deficit and the low level of reserves,” he continued, adding that Pakistan’s reserves were increasing, its exchange rate was stable and current account deficit was low as compared to the past.
Baqir said Pakistan recorded a current account deficit of six percent in the past and was now expecting it to hover between 2.5 to three percent which was sustainable.
Pakistan to set up digital-only banks in ‘couple of months’ — central bank
https://arab.news/gx9zw
Pakistan to set up digital-only banks in ‘couple of months’ — central bank
- In an exclusive interview with Arab News, the central bank’s deputy governor Sima Kamil hoped to issue about eight banking licenses
- The State Bank of Pakistan is currently improving the country’s digital payment system to make transactions possible through cellphone numbers
Chinese aerospace firm eyes up to $10 billion investment in Pakistan, ministry says
- China is a major ally and investor in Pakistan, with several Chinese private sector firms undertaking joint ventures in the South Asian country
- China’s Aerospace Development Industry Investment Group Co. says it plans investments in advanced technology industries and mining and minerals
ISLAMABAD: A Chinese aerospace firm has expressed interest in investing up to $10 billion in various sectors in Pakistan, the information ministry in Islamabad said on Thursday.
China is a major ally and investor in Pakistan and has pledged over $65 billion in investment in road, infrastructure and development projects under the China-Pakistan Economic Corridor (CPEC), besides several Chinese private sector manufacturers undertaking joint ventures in the South Asian country.
Pakistan offers significant investment potential owing to its strategic geographic location connecting South Asia, Central Asia, and the Middle East, a large consumer market of over 240 million people, and a young and dynamic workforce. The country also provides attractive incentives for investors.
On Thursday, officials of the Aerospace Development Industry Investment Group Co. of China met with Pakistan’s Board of Investment Minister Qaiser Ahmed Sheikh to discuss investment opportunities and potential avenues in the country, according to the Pakistani information ministry.
“They informed that Aerospace Development Industry Investment Group is an international investment group with an AAA corporate credit rating, engaged in strategic industrial investments in areas including advanced technologies, aerospace development, artificial intelligence, electric vehicles, drone technologies, and energy projects,” the ministry said.
“The delegation expressed keen interest in investing between USD 5 billion to USD 10 billion in Pakistan across multiple sectors including mining and minerals, advanced technology industries, and industrial development. They also emphasized their interest in collaborating with Pakistan on skill development initiatives.”
Sheikh appreciated the interest shown by the Chinese company, saying that Pakistan is taking concrete steps to improve investment climate in the country.
“The Board of Investment is actively working on regulatory reforms to facilitate investors, promote ease of doing business and streamline business procedures,” he was quoted as saying.
The minister referred to the Pakistan–China Business-to-Business Conference held in September last year, where more than 300 companies from Pakistan and China participated and signed 167 Memoranda of Understanding (MoUs) aimed at strengthening bilateral investment and trade cooperation.
“Pakistan and China already have a Free Trade Agreement, and Pakistan is now focusing on increasing its value-added exports to further enhance economic cooperation,” he said.
Sheikh also briefed the delegation on the incentives available for investors in Pakistan’s Special Economic Zones (SEZs), including exemption from income tax and sales tax on the import of machinery, to promote industrial investment.
