Islamabad, Pakistan, 11/09/2021 / Top Wire News /
Roshan Digital Account (RDA) deposits hit $2.7 billion in October since its introduction in September 2020, demonstrating the increased confidence of foriegn Pakistanis despite the global downturn caused by Covid-19.
During this time, almost 68% of the total, or $1.834 billion, was invested in high-return Naya Pakistan Certificates (NPCs).
In terms of dollars, the three-, six-, and twelve-month NPCs provide profit rates of 5.5%, 6%, and 6.5%, respectively. The return on a three- and five-year certificate is 6.75pc and 7pc, respectively.
In rupee terms, the return rates range from 9.5% to 11% for various tenors.
According to SBP data, overall investments since September 2020 have increased to $2.677 billion, with an average monthly inflow of $191 million.
The central bank and the government are pleased with the influx, but bankers say the reaction has fallen short of expectations.
Under the RDA, the investment in the equity market was just $27 million, or 1% of the total, suggesting that faith in the equity market is extremely low.
Since the RDA’s establishment, the government has made a number of measures to make the programme more appealing, as well as changes to minimise the cost of tax compliance for foreign Pakistanis. For Non-Resident Pakistanis (NRPs) to create and run these accounts, the government has made the taxation process straightforward, convenient, and hassle-free.
The revisions have expanded the scope of the full and final taxation system to dividends and capital gains on investments in stocks and mutual funds, as well as capital gains on real estate investments made through RDAs.
As a result, NRPs will not be required to submit tax returns for income received from RDA investments and will not be taxed on cash withdrawals and bank transfers.
The RDA is a major State Bank programme aiming at linking Pakistanis living abroad with Pakistan’s banking and payment systems.
In February of this year, Prime Minister Imran Khan proposed home loans for Pakistanis living abroad and encouraged participating institutions to offer additional products to fulfil the needs of the Pakistani diaspora, such as automotive and house loans.
According to bankers, there has been no report on house loans made by foreign Pakistanis under the RDA plan thus far.
The government and the State Bank both feel that RDA inflows contributed to stimulate economic activity and improve the nation’s balance of payments by increasing foreign exchange reserves, making the product a win-win for both the diaspora and the country.
In response to demand from foreign Pakistanis in Europe and the United Kingdom, the government has released NPCs denominated in euro and pound sterling, in addition to the current US dollar and rupee certificates.
Source: Submit123News
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