Residents can create accounts in the capital market using their bank’s platform or app under the State Bank of Pakistan’s (SBP) ‘Shared KYC (Know Your Customer) Project,’ according to central bank governor Dr Reza Baqir, who said that the initiative will open the path for greater equity market accessibility.
Dr Reza Baqir praised the Central Depository Company (CDC) involvement during a visit to commemorate the successful functioning of significant programmes for Pakistan’s capital market, including Roshan Equity Investment for RDA holders and Raast for dividend payments.
The central bank launched and commercial banks implemented very efficiently the successful roll-out of significant national interest projects like RDA, of which Roshan Equity is a component, and Raast, he said.
He recognized that CDC had a significant impact in Roshan Equity’s operations.
“This is just the start of our goal for the development of Pakistan’s capital market,” Dr Baqir added.
“CDC will again serve as an information sharing bridge for the digital opening of capital market accounts through banking portals for local resident investors as part of the Shared KYC Project, with the goal of eliminating repetition of information capture and KYC processes,” said CDC CEO Badiuddin Akber.
Many financial transactions of Roshan Digital Accounts and Raast for the Pakistan Stock Exchange are already being processed by the CDC.
Meanwhile, brokerage firms have stated that the Shared KYC Project is beneficial to the expansion of the stock market.
“This will save a lot of time and effort when it comes to registering a broker account, and it may help grow the investor base,” said Mohammad Sohail, CEO of Topline Securities.
“I believe this will be very beneficial because account opening has been a huge difficulty in the Pakistani market,” said Samiullah Tariq, the Pak-Kuwait Investment and Development Company’s head of research. “In comparison to regional countries, the investment ratio is really low,” he added, adding that the number of investors is less than a tenth of the Bangladesh market.
He believes that this strategy will help enhance domestic investor penetration and entice domestic investors to formal channels of investing, such as the equity market.
“It will also assist in the growth of firms and the raising of funds when new investors are looking for investment opportunities,” he added.