KARACHI: Pakistan has reached a significant milestone in digital payments, with Buna Raast, the instant payment system, processing a staggering Rs1 trillion in just 16 days.
This remarkable growth underscores the State Bank of Pakistan’s (SBP) commitment to making digital payments more accessible and convenient. Raast has processed an impressive 892 million transactions worth Rs20 trillion since its inception, with the average payment size through the online system standing at Rs22,421.52.
The Person-to-Person (P2P) module, launched in February 2022, has driven this growth. Building on this success, the introduction of the Person-to-Merchant (P2M) module is expected to further boost digital payments.
The P2M module enables businesses to accept payments via QR codes, Raast IDs, bank account numbers, and request-to-pay options, expanding payment choices for customers.
Pakistan’s financial sector has also witnessed significant growth. The total number of accounts maintained double-digit growth, increasing by 18% to 215 million by the end of fiscal year FY24.
The branch network expanded to 18,355 in FY24 from 17,751 in FY23, facilitating financial intermediation and serving a large number of customers. Total deposits mobilized by banks, DFIs, and MFBs rose by 21.6% in FY24 to Rs33,236 billion.
The banking sector’s after-tax profit rose by 30.4% in FY24 to Rs645.2 billion. However, rising taxation charges remain a concern, with tax charges accounting for about 52% of pre-tax profits in FY24. Additionally, financial depth fell to 61.5% from 64% in FY23.
Development Finance Institutions (DFIs) experienced a contraction in their asset base by 23.7% to Rs2,460 billion. Microfinance Banks (MFBs) saw a deceleration in asset base growth to 8.6% in FY24. Despite these challenges, Pakistan’s digital payment ecosystem is thriving, with Raast leading the charge.
As the financial sector continues to grow and adapt to changing economic conditions, addressing challenges and ensuring sustained progress remains crucial.
The growth in savings accounts is particularly notable, driven by elevated interest rates. This rising trend in savings accounts bodes well for reducing cash preference and improving the saving rate in the economy.
However, the financial sector’s asset base growth of 21.6% to Rs65.2 trillion by the end of FY24 was accompanied by a decline in financial depth.
Overall, Pakistan’s financial sector is exhibiting resilience and growth, with digital payments playing a vital role. The SBP’s efforts to enhance financial inclusion and convenience are yielding positive results. As the economy continues to evolve, it is essential to address challenges and ensure sustained progress in the financial sector.
