Roshan Digital Account (RDA) is a facility provided to the non-residents of Pakistan to give them access to banking facilities within Pakistan without having to visit a consulate or embassy. Through RDA, overseas residents have sent record high remittances of $29.4 billion in FY21.
RDA was launched by the State Bank of Pakistan (SBP) in partnership with the country’s commercial banks to provide account and banking solutions to the 11 million overseas Pakistanis living in different countries. It has a diverse portfolio that caters to the Pakistani diaspora mainly. Nearly 0.3 million overseas Pakistani residents have opened RDAs so far. Pakistan heavily relies on these inflows to cover its trade deficit.
Remittance inflows contribute significantly to a country’s economic well-being and alleviate poverty. It improves the social conditions and acts as an investment catalyst in the country, influencing growth-promoting production, exports, consumption, and income in return. Remittances can withstand the test of time, be it the Global Financial Crisis of 2008-09, the slump in oil prices during the middle of the previous decade which hit Gulf economies, or Pakistan’s domestic economic challenges during the 2018-19 balance of payment crisis and the Covid-19 pandemic. During the current economic downturn, remittances are the only hope to manage countries’ balance of payment difficulties.
The Roshan Digital Account (RDA) has recently received the highest-ever single-day inflow of $57 million, reaching a total of $4.5 billion. State Bank of Pakistan has termed it good news for the country’s economy in general and the financial sector. The current rise in remittances through RDA will help Pakistan diversify its sources of foreign exchange and reduce the current account deficit burden on the economy. Overseas Pakistanis are the major asset of Pakistan’s economy, protecting the country from default by remitting record remittances of over $30bn. With such high inflows, there is a growing hope that these remittances will be used productively in various areas of the economy.
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