The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) are collaborating to develop digital accounts for resident Pakistanis that will be similar to the Roshan Digital Accounts (RDA) for overseas Pakistanis, allowing citizens to invest in a variety of investment opportunities in a simple and hassle-free manner.
Customers of banks and financial institutions will be able to quickly open accounts in the Pakistan Stock Exchange and mutual funds using the information provided to their banks, according to official sources.
The RDAs have been a huge success for the SECP and the State Bank of Pakistan (SBP), as they allowed Pakistanis living abroad to access the stock exchange.
There will be no additional documentation that investors must submit to brokerage firms or asset management firms. The facility will most likely be revealed in the coming weeks. They will have access to investment opportunities thanks to the KYC (Know Your Customer) information that they have already provided to banks and branchless banking companies.
The fundamental goal of this initiative is to increase mass participation in various investment institutions in order to broaden the investor base in Pakistan’s regulated markets and, as a result, attract investments in these institutions.
Last year, RDAs were created in Pakistan, primarily for Pakistanis living abroad. Overseas Pakistanis were offered the option of investing in the stock exchange and various bonds in partnership with the SECP, resulting in inflows of funds into the provided instruments.
Digital Onboarding
The SECP created a digital onboarding system, which has gotten a lot of attention as the public’s interest in investing in asset management businesses’ instruments has grown.
Until 2020, more than 8,000 accounts were opened online, according to an official. The number of accounts opened online in the first five months of 2021 was 21,000 in March.
The mechanism provides investors with a seamless account opening process for mutual fund investments, eliminating the need for physical presence and the submission of physical documents. The system uses virtual meeting tools (WhatsApp, Skype, etc.) to authenticate the investor and original identification documents, allowing for real-time online face-to-face engagement.
The necessity for investors to physically sign many paperwork and statements is also eliminated with a simplified account setup process. To entice investors to mutual funds that focus on investing and savings, the apex regulator has established a digital onboarding technique with AMCs. documents.
Asset management firms are permitted to execute an online customer verification process in order to assure investor protection and compliance with all applicable legal and regulatory frameworks when opening online accounts.
In addition, the approach incorporates digital verification for investor authentication and original identification documents via virtual meeting tools (such as WhatsApp and Skype) for real-time online face-to-face engagement.
A streamlined account opening process also eliminates the need for investors to physically sign several documents and statements.
