New initiatives to facilitate digital financial products have been unveiled by the State Bank of Pakistan (SBP) to boost digitalization.
In a bid to further boost the digitalization of financial services and enhance financial inclusion, the State Bank of Pakistan (SBP) has unveiled two groundbreaking initiatives: digital cheques clearing and a unified QR code for payments. Governor Dr. Reza Baqir introduced these initiatives during the 5th Stakeholders Meeting on Digital Financial Services held earlier this week in Karachi.
The primary aim of these initiatives is to streamline and modernize financial transactions, making them more efficient and accessible to a wider audience. Dr. Baqir highlighted the significance of these steps in the broader context of accelerating digitalization and fostering financial inclusion in Pakistan.
The first initiative, digital cheques clearing, aims to replace the traditional physical presentation and clearing of cheques. This move is anticipated to significantly reduce the time involved in cheque processing, offering a more streamlined and efficient mechanism for financial transactions.
The second initiative involves the introduction of a unified QR code for payments. This innovative approach enables users to make payments seamlessly through any digital application, eliminating the need for multiple applications. This not only simplifies the payment process for users but also contributes to a more interconnected and user-friendly digital financial ecosystem.
Governor Baqir underscored the SBP’s commitment to promoting innovative digital financial services and expressed readiness to resolve any challenges that may arise during the implementation of these initiatives. The SBP has been actively exploring Open Banking, a system that facilitates the sharing of customer-permissioned information among financial institutions. This initiative is aimed at promoting consumer choice, fostering competition, and enhancing efficiency in the financial sector.
The stakeholders’ meeting, a recurring event initiated by Governor Baqir in October 2019, serves as a platform for key players from the public and private sectors to collaborate on resolving cross-cutting issues related to digitalization. The meeting witnessed the participation of prominent figures, including Chairman of the Pakistan Telecommunication Authority (PTA), Major General (R) Amir Azeem Bajwa; Chairmen of the Federal Board of Revenue (FBR), Asim Ahmed; Chairman of the National Database and Registration Authority (NADRA), Muhammad Tariq Malik; and the Country Director of the World Bank, Najy Benhassine, among others.
The forum addressed various issues related to digital financial services, including taxes and duties on Point of Sale (PoS) machines, remote account opening facilitated by NADRA, and a pricing mechanism review for mobile SIM verification.
Furthermore, during the meeting, the SBP and PTA jointly announced the formation of a task force to prevent digital financial services fraud. Additionally, the SBP and FBR have agreed to establish a joint committee to regularly collaborate on initiatives aimed at increasing digitization in the economy.
Governor Baqir informed participants about the progress made on the SBP’s Raast payment platform, highlighting the upcoming launch of the second phase of person-to-person payments in October 2021. This phase involves integrating banks with the Raast platform, contributing to the overall growth of internet and mobile banking, which has seen a 30% and 20% increase, respectively, in Q3, FY21 compared to the same period last year.
The latest initiatives and collaborative efforts underscore Pakistan’s commitment to advancing its digital financial infrastructure, positioning the country as a leading player in the global digital economy.
