The country’s central bank has given overseas Pakistanis a variety of new investment choices in Pakistan, including public and unlisted enterprises, mutual funds, and real estate.
The State Bank of Pakistan has allowed direct investment into shares of companies in Pakistan and units of funds established and operated by private fund management companies licenced by the Security Exchange Commission of Pakistan through Rupee-based Roshan Digital Accounts (RDAs), in order to provide additional investment and financing opportunities to non-resident Pakistanis (NRPs).
Furthermore, to encourage investment in Pakistani real estate, RDA holders can now access financing through their PKR Accounts via digital means. Money Transfer Operators (MTOs) have also been allowed to deposit funds into rupee-denominated RDAs, according to the statement.
Previously, rupee-denominated RDAs could be used to invest in registered government securities, stock exchange-listed securities, mutual funds, self-financing real estate, and bank term deposits.
Non-resident Pakistan Origin Card (POC) holders have recently been permitted to obtain consumer loans from Pakistani banks.
In Pakistan, Authorized Dealers (banks) have wide authority to issue loans in local currency to individual non-resident Pakistanis and non-resident POC holders, subject to adherence to relevant Prudential Regulations and compliance with ‘AML/CFT’ criteria.
Overseas Pakistanis will have additional investment opportunities as a result of the foregoing reforms, as well as the ability to acquire property in Pakistan using bank financing.
Similarly, before, funds could only be transferred into RDAs through banking methods. However, inflows from overseas into RDAs have been approved through MTOs, depending on feedback from NRPs.
This would provide another easy and cost-effective way to transmit remittances, especially to NRPs who may not have a bank account in another country.
Borrowing must have a clear, reasonable, and well-documented purpose. Any such lending by Authorized Dealers, on the other hand, will be subject to the following conditions:
• Borrowers must liquidate the loan by sending remittances in foreign currency through standard banking channels or by debiting their repatriable PKR and foreign currency accounts, which must be fed by remittances from abroad.
• The sale proceeds of the property, whether movable or immovable, created as a result of such lending are not eligible for repatriation unless SBP grants general or particular approval.
• Banks may also give rupee loans to individuals who are foreign nationals, except for the purpose of purchasing immovable property, which is prohibited by the State Bank or any other law.”