SBP Governor Jameel Ahmed announced on Friday a significant achievement in regional financial connectivity as Pakistan now enables cross-border payments in Pakistani rupees with Arab countries. This milestone was made possible through the integration of Raast, Pakistan’s instant payment system, with the Arab Monetary Fund’s Buna platform.
The SBP also revealed plans to enhance cross-border payments with China, allowing e-wallet holders in Pakistan to make direct payments for e-commerce and small purchases via online banking channels. This development is part of the central bank’s broader efforts to deepen regional financial ties and accelerate digitalisation in Pakistan.
Speaking during the presentation of the SBP’s Annual Report for 2023-24 to parliament, Governor Ahmed emphasized that the integration of Raast with the Buna system marked a crucial step forward. “This integration allows for the inclusion of the Pakistani rupee as a settlement currency, a significant milestone for cross-border digital financial integration,” he said. This move is expected to bolster trade and financial transactions with Arab nations and foster greater economic cooperation in the region.
Additionally, Pakistan is moving towards improving its financial relationship with China. The SBP approved a cross-border partnership between Pakistani and Chinese financial services firms, enabling Pakistani e-wallet users to conduct transactions in China. This initiative is expected to simplify e-shopping and small-ticket purchases from Chinese merchants within specified annual limits.
In a move to enhance digital financial inclusion, the SBP also announced the upcoming launch of the third National Financial Inclusion Strategy (NFIS) for 2024-2028. The strategy aims to extend banking services to 75% of the adult population by 2028, with a particular focus on increasing financial inclusion for women. This goal builds on the progress made under previous NFIS strategies, which raised financial inclusion to 60% of the adult population by 2023.
Governor Ahmed highlighted that NFIS 2028 will target a reduction in the gender gap, aiming to ensure that at least 25% of new users are women by 2028. This initiative reflects the SBP’s commitment to fostering economic empowerment for underserved groups, including women, youth, and the disabled, particularly in rural areas.
The SBP’s new strategy will also prioritize expanding digital financial services, improving the ecosystem for financing in key sectors such as agriculture, SMEs, and microfinance, and promoting sustainable finance solutions. By focusing on these areas, NFIS 2028 aims to drive inclusive economic growth and improve the well-being of Pakistan’s low-income populations.
As part of its financial inclusion agenda, the SBP is also developing a financial inclusion index for Pakistan. This index will offer a comprehensive measure of the country’s financial inclusion, assessing access, usage, and quality of financial services. The index will be published annually to provide an accurate understanding of progress in this area and guide evidence-based policymaking.
Governor Ahmed also provided updates on other financial initiatives, including the Electronic Warehouse Receipt Financing (EWRF) system, which was launched in 2022 for maize and rice crops. The system allows farmers, traders, and processors to access financing from banks against physical commodities stored in accredited warehouses, without needing traditional collateral. In FY24, banks disbursed Rs1,891 million under the EWRF system, surpassing the target of Rs1,741 million.
Additionally, the SBP reported ongoing success with the Crop Loan Insurance Scheme (CLIS), which aims to mitigate the impact of natural disasters on agriculture. Between July 2008 and December 2023, banks submitted insurance premium claims totalling Rs11.3 billion for 7 million beneficiaries. Meanwhile, the Livestock Insurance Scheme for Borrowers (LISB) continues to support small farmers, insuring nearly a million livestock owners between 2014 and 2023 with claims amounting to Rs3.22 billion.
These initiatives, combined with the SBP’s push for greater digital financial integration and inclusion, signal a robust strategy to foster sustainable growth and ensure that Pakistan’s financial system supports all sectors of society. As the central bank looks toward the future, its focus remains on empowering underserved populations and facilitating regional financial cooperation.
