The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) are collaborating to launch 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 avenues with minimal hassle.
According to official sources, bank and financial institution users will be able to quickly open accounts on the Pakistan Stock Exchange and mutual funds using the information provided by their banks.
The RDAs have been a resounding success for the SECP and the State Bank of Pakistan (SBP), since they enabled foreign Pakistanis to access the stock exchange and mutual funds.
There will be no additional documentation that investors must submit to brokerage firms or asset management firms. The facility’s name is expected to be announced in the coming weeks. They will be granted access to investment opportunities based on the KYC (Know Your Customer) information previously submitted to banks and branchless banking operators.
The primary goal of this initiative is to increase mass participation in various investment institutions in order to diversify the investor base in Pakistan’s regulated markets and, ultimately, to attract investment in these institutions.
RDAs were launched in Pakistan last year with the express purpose of benefiting Pakistanis living abroad. In partnership with the SECP, abroad Pakistanis were offered the opportunity to invest in the stock market and various bonds, resulting in investment in the provided instruments.
Onboarding over the Internet
The SECP created the digital onboarding method, which has garnered an enormous reaction as public interest in asset management businesses’ instruments has grown.
Until 2020, an official stated, almost 8,000 accounts were opened online. The number of accounts opened online in the first five months of 2021 was 21,000 in March.
The technique enables investors to open mutual fund accounts without the need for physical presence or submission of physical documentation.
Asset management organisations are permitted to conduct an online client verification process in connection with the opening of online accounts in order to protect investors and ensure compliance with all applicable legal and regulatory frameworks.
Additionally, the process incorporates digital verification for the investor’s authentication and original identification documents using virtual meeting tools (such as WhatsApp and Skype) for real-time online face-to-face engagement.
Additionally, a simplified account opening process reduces the need for investors to physically sign several documents and declarations.