By Muskan Naveed ISLAMABAD, Oct. 29 (INP-WealthPK): Roshan Digital Account (RDA) is an initiative of the State Bank of Pakistan for the digital onboarding of non-resident Pakistanis in order to boost the economy of the country through formalizing the channels of remittances. Pakistan – being a developing country – has a large informal sector. The black economy is regarded as large as nearly 50% of the Gross Domestic Product (GDP) of the country. While arguments for the black economy exists as it helps small-scale traders and vendors operate seamlessly, the problem arises from the fact that the country does not benefit substantially from the informal economy. The widespread use of informal channels is not uncommon in the international payment realm. The Hawala/Hundi is an alternate system for remittances available in the informal economy. While this system is used predominantly by money-launderers and terrorists to move around cash without being detected, it is also popular among everyday folk in Pakistan because of the decreased complexities. Pakistan has been combating money laundering and terror financing and a strict crackdown has been launched against the Hawala/Hundi system by the government. The State Bank of Pakistan has also been on the forefronts of eliminating alternative remittance systems in the country – both to target illegal activities and help the growth of the economy.  What is Roshan Digital Account Roshan Digital Accounts is one of the newer initiatives taken to curb alternative remittance systems. The initiative was launched by the State Bank of Pakistan in collaboration with commercial banks to provide digital banking solutions and the digital onboarding of non-resident Pakistanis. Through the initiative, a non-resident Pakistani (NRP) can open and operate a bank account in Pakistan without any physical requirements. This is a monumental step towards digitization for the country because earlier account creation for NRPs was a complex procedure with the requirement of physical presence. The fruits of Roshan Digital Accounts The world is on a fast-paced move towards digitization and developing countries have been lagging behind. Technologically advanced countries like China have nearly achieved the complete digitization of its economy as the primary medium of transactions is through digital means. Pakistan has been catching up with the rest of the world with initiatives like Roshan Digital Accounts. The initiative was designed to target the alternative remittance system and while still in infancy, it is showing phenomenal results. Pakistan achieved record-high remittances of $8 billion in the first quarter of fiscal year 2021. The country had also achieved a current account surplus during fiscal year 2020 all because of the rising remittances. This was made possible because of Roshan Digital Accounts as sending remittances to Pakistan has become an easy procedure. Roshan Digital Accounts is also expected to boost foreign direct investment in the country as it also enables investment of non-resident Pakistanis through Naya Pakistan Certificates (NPCs) issued by the government. The tax filing requirements have also been waived for NPCs. Account holders can also invest in the Pakistan Stock Market. In almost six months after the launch of RDA, nearly 100,000 bank accounts had been opened by foreign Pakistanis and a sum of $671 million had been injected into the economy through digital accounts. The figure is expected to reach $2 billion by the end of December. If the projections for the growth of RDA are realized, the initiative will play a crucial role in uplifting the Pakistani economy.