Think tank mulls digital accounts
by Our CorrespondentISLAMABAD: Adviser to Prime Minister on Finance Abdul Hafeez Shaikh has stressed the need for undertaking demand trials in the pursuit of developing the target market.
The matter came up for discussion in a special meeting of a think tank, formed by the prime minster, during Eid holidays with PM aide Shaikh in the chair.
All members of the high-level group participated in the meeting while the State Bank of Pakistan (SBP) governor joined proceedings on a special invitation.
During the meeting, the work done by the Finance and Banking Committee was under primary focus apart from the feedback from the Committee on Social Safety Nets.
Sultan Ali Allana presented the work of the committee on banks and financial institutions to improve liquidity and credit flow to individuals and businesses.
The emphasis was on offering digital accounts to overseas Pakistanis, with reference to their objectives, key processes, features as well as main regulatory and administrative challenges.
Other proposals for enhancing the temporary relief facilities, expanding lending to small and medium enterprises (SMEs) and enabling demand growth through expansion of consumer lending and encouraging housing finance were also shared.
Adviser to PM on Commerce Abdul Razak Dawood and Adviser on Institutional Reforms Ishrat Husain emphasised the need for due diligence with reference to the potential adverse effects of the new scheme for remittances/products, Financial Action Task Force (FATF) concerns and harmonisation of all initiatives aimed at promoting the digital economy.
It was discussed that the experience of Pakistan Banao Certificates needed to be applied as a benchmark to plug potential loopholes while offering new products.
The SBP governor appreciated recommendations of the committee for improving liquidity for individuals and businesses and shared that the central bank, in collaboration with the Ministry of Finance and Central Directorate of National Savings (CDNS), had been in the final phase of launching a savings product for overseas Pakistanis. This will be in partnership with banks and the CDNS, and a lot of back-end work has already been done.
Husain and other participants raised concern over the level of automation and digitisation within the CDNS and stressed the need for combining the SBP’s and committee’s proposals to offer more robust and legally compliant solutions.
Speaking on the occasion, Dr Ijaz Nabi shared the committee’s assessment of the Ehsaas programme, with reference to the key areas of concern. He briefed the participants about the recommendations shaped so far.
Meeting participants felt the need for inviting Dr Sania Nishtar in the next meeting to have a better understanding before moving forward.
Provincial coordination issues were also highlighted, which should be resolved for a smooth implementation of matters like tax harmonisation.
The adviser to PM on finance told the finance secretary to organise a meeting among the SBP, Shoukat Tarin, Sultan Ali Allana and Arif Habib in order to have an understanding of the bilateral point of view on the features, processes and allied aspects of the digital account scheme, with a view to evolving consensus on a unified practical approach.
Moreover, it was decided that other proposals of the committee also needed to be deliberated upon with the SBP in the same meeting to have clarity about the way forward.
It was unanimously agreed that the think tank would meet again shortly in order to immediately finalise its work.
Shaikh shared that recommendations of the meeting would be presented to the PM soon, so that directives from the top were incorporated into the budgetary process including the budget speech.
Published in The Express Tribune, May 27th, 2020.