Muhammad Soban

The State Bank of Pakistan (SBP) has launched a scheme to provide financial services to 50 million more people in the country, WealthPK reports. Sima Kamil, Deputy Governor of the central bank, said that banks should offer services to support savings, investments, micro-insurance and credit needs of people beyond opening accounts to ensure real financial inclusion.

She said that 10 percent of all bank accounts have only one transaction within one year. Out of three women, only one has an active bank account. Many women in Pakistan, particularly those living in rural areas, are not permitted to possess even a cell phone. The stakeholders must think about this alarming situation.

Sima Kamil said that having a bank account is only one part of financial inclusion. “An individual needs more from a bank than just an account,” she added. She said that the AMA journey began in 2016 under branchless banking regulations and a total of 147 million accounts existed at the end of December 2021, up from 66 million in 2016. It shows a 122 percent increase in five years, with half of these 77 million accounts being branchless.

Sima Kamil said hardly 57 percent of the 220 million people in Pakistan own bank accounts, as opposed to 76 percent globally. Dr Mahmood Khalid, a senior economist at the Pakistan Institute of Development Economics, Islamabad, told WealthPK that the SBP has initiated many programnes to enhance financial inclusion in the far-flung areas of Pakistan.

He said that the objective of such schemes is to provide people with a financial inclusion option. Assan Mobile Account is one of such initiatives of SBP that would help to increase financial inclusion.

“Although its functions are limited, it again requires a backend bank account. However, its application is very easy and can even be carried out with a simple phone, which is not attached to any internet option. This is what financial intermediation is all about. Banks play an active role in financial mediation, facilitating financial transactions,” said Dr Mahmood Khalid.

He said that such financial services were becoming part of gadgets like phones without physical interaction with the banks with the advent of technology. Getting those services through the conventional way could cost highly. In today’s modern age, financial services can be obtained through the telephone everywhere with minimal cost. Dr Mahmood Khalid said that opening a formal bank account requires a lot of documents and verifications. However, the digital bank account needs the National Identity Card number and the SIM card of a cell phone.

He said that mobile phones have already been used as cash purses but it depends on the acceptability at both ends of seller and buyer. “The same will be the case of AMA. The recipient also needs to be willing to accept this version of the transaction if the major part of the economic transactions is supposed to be carried out in the shadow economy,” he told WealthPK.

Independent News Pakistan-Wealthpk