State Bank of Pakistan (SBP) has introduced various options to overseas Pakistanis to invest in Pakistan, mainly in listed and unlisted companies, mutual funds, and real estate.
In order to provide further investment and financing opportunities to non-resident Pakistanis (NRPs), the State Bank of Pakistan has allowed direct investment through the Rupee-based Roshan Digital Accounts (RDAs) into the shares of companies in Pakistan and units of funds established and operated by private fund management companies licensed by the Security Exchange Commission of Pakistan (SECP), according to a statement issued by the banking regulator.
Moreover, to facilitate investment in Pakistan’s real estate, the financing facility has been allowed to RDA holders through their PKR Accounts using digital channels. In addition, the inflow of funds into rupee-denominated RDAs has been allowed through Money Transfer Operators (MTOs), it said.
Earlier, investments through rupee-denominated RDAs were allowed in registered government securities, listed securities on the stock exchange, mutual funds, real estate with self-financing, and term deposits of the banks.
The above changes will not only provide more investment opportunities to non-resident Pakistanis but also facilitate them to purchase property in Pakistan through bank financing. Likewise, earlier, the flow of funds into RDAs was allowed only through banking channels. However, based on the feedback received from NRPs, inflows from abroad into RDAs have been allowed through MTOs. This would provide another convenient and economical avenue for sending remittances, particularly to the NRPs who might not have a bank account abroad.
Recently, the non-resident Pakistan Origin Card (POC) holders had been allowed to avail consumer financing from banks in Pakistan.
“The Authorized Dealers (banks) have general permission to provide loan to individual non-resident Pakistanis and non-resident Pakistan Origin Card (POC) holders in local currency in Pakistan, subject to observance of the relevant Prudential Regulations and compliance of ‘AML/CFT’ requirements. The purpose of borrowing must be clear, legitimate and duly documented. However, any such lending by the Authorized Dealers shall be subject to the following conditions:
- The loan shall be liquidated by the borrowers through remittances from abroad in foreign exchange through normal banking channels or by debit to their repatriable PKR and foreign currency accounts which must be fed through foreign remittances.
- Sale proceeds of the property, moveable or immoveable, created from such lending shall not be eligible for repatriation unless otherwise allowed by SBP through general or specific permission.
- Banks may also grant rupee loans to resident individual foreign nationals, except for purchasing immovable property and the purposes either restricted by the State Bank or any other prevalent law.”
It is pertinent to mention here that the remittances received through RDAs have already crossed USD 2 billion. SBP greatly values the contribution and trust of overseas Pakistanis in this initiative and assures them that it would continue to enhance the feature-set of the RDAs so that the accounts can seamlessly cater to their complete banking needs.