KARACHI: State Bank of Pakistan (SBP) Governor Dr Reza Baqir on Friday launched the SBP FX Regulatory Approval System (RAS) for end-to-end digitalization of submission processes in foreign exchange-related cases.
Both the SBP governor and Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Husain gave speeches during the event.
According to a statement issued by SBP, “The initiative will feature a fully digitalized platform to the business community and individuals in approaching banks for their foreign exchange related requests. It will transform FX operations by replacing the paper-based requests with electronic submissions, which is not only efficient but also cost effective. This development is also congruent with the government’s vision of Digital Pakistan.”
SBP Deputy Governor Jameel Ahmad on the occasion gave a brief overview of SBP’s Knowledge Management Programme to digitalize the decision-making processes at the central bank. He said that all FX related transactions create cross border monetary and reputational exposures for both the businesses and country and need to be well managed to avoid any unwarranted risks.
He said that in order to address this issue, remove inherent problems related to paper-based processes and to ensure timely delivery of services to the stakeholders, SBP has developed this online platform under the umbrella of its ‘Knowledge Management System’.
SBP Governor Reza Baqir said that the bank has worked with various public and private sector entities to provide alternate delivery channels for payments. He also mentioned that work of micropayment gateway is at an advanced stage, which would revolutionize the payment spectrum in the country.
He listed several recent SBP steps, including expanding the delegation of FX related requests to bank; providing ease in payments for acquisition of services from abroad by one-time registration of contract with SBP and remittance of all subsequent payments by the banks; payments directly through the banks for acquisition of services from digital service providers up to $200,000 per year without any approval from SBP; and facilitating exporters by allowing them to make shipments on ‘Open Account Basis’ with direct dispatch of documents to the importer.
He said that end-to-end digitalization of process through the commercial banks’ portals will enable customers to lodge their FX related requests from the location of their convenience thereby sparing their valuable time previously spent in navigating the paper-based processes.
Chief Guest Dr Ishrat Husain, in his address, explained the government’s vision on digital Pakistan, highlighting strengthening connectivity, improving digital infrastructure, increasing investment in digital skills, and promoting innovation and tech entrepreneurship.
Dr Husain was particularly dismayed about the absence of venture capital funds in Pakistan. He said that in the last decade, there has been a proliferation of centers of entrepreneurship, accelerators and incubators for training and promoting startups, but there hasn’t been a consequential increase in the number of venture capital funds, angel funds and other modes of risk-sharing financing.
“In the absence of such funds, families, friends and folks would not be able to sustain these ventures. The VC funds are usually founded by high net worth individuals who have made money elsewhere and are now able to invest in high risk, high reward companies,” he stated.
The PM’s aide urged big business houses and high net worth individuals to come forward and invest in such startups.