There are two main categories of foreign currency accounts in Pakistan. The most recent, introduced in 2020, is the digital foreign currency account (RDA). The other category, established in 1974, remains active today. Both are designed primarily for overseas Pakistani workers, facilitating their remittances. Both allow overseas Pakistanis to transfer any amount of their inward remittances abroad.
However, there is a serious disparity in the interest rates offered on these two types of accounts. The RDA offers a 9% annual interest rate, while the interest rate on the older foreign currency accounts is only 1%.
This discriminatory policy was introduced by the State Bank of Pakistan (SBP) for reasons that remain unclear. It is perplexing why the SBP maintains this disparity when the value of a US dollar is the same whether deposited in an RDA or a standard foreign currency account.
I hold both types of accounts. Given that I receive only around 1% interest on my ordinary foreign currency account (GBP), I wanted to transfer the balance to my RDA (GBP) to benefit from the higher interest rate of around 9%. However, my bank in Pakistan informed me that the SBP does not allow such transfers between these accounts.
I would like to draw public attention to this discriminatory policy and request that the SBP and the Ministry of Finance review it urgently so that all overseas Pakistanis can earn higher interest rates on their remitted funds.
EJAZ AHMAD MAGOON,
Dubai.
