The State Bank of Pakistan (SBP) is actively working towards launching a cross-border payment system, akin to RAAST, aimed at providing convenient and cost-free services to overseas Pakistanis.
The primary objective is to attract remittance inflows through formal banking channels. In this regard, the banking regulator has commenced discussions with the Arab Monetary Fund (AMF), a subsidiary organization of the Arab League.
The purpose is to establish a connection between Pakistan’s Raast system and the AMF-owned Buna payment systems. This collaboration aims to facilitate real-time, cross-border payments for overseas Pakistanis.
“We are in talks with the Arab Monetary Fund which has a remittance project called Buna which connects all Gulf Cooperation Council (GCC) countries,” Jameel Ahmed, the State Bank of Pakistan (SBP) governor, said at the launch of a new Pakistani banknote in Karachi to celebrate 75 years of the SBP.
“SBP is also likely to sign a Memorandum of Understanding (MoU) with them soon. Accordingly, Pakistan’s payment system will be connected with Buna and as a result of this connectivity the speed and cost of our remittances will significantly improve,” he added.
The SBP chief said linking RAAST with Buna was one of the key objectives of the SBP’s ‘Strategic Vision 2028′, which aims to take the Pakistani central bank further ahead.
RAAST is Pakistan’s first instant payment system that enables end-to-end digital payments among individuals, businesses, and government entities. The number of users registered with the RAAST Payment system surged to almost 30 million by the end of March 2023.
Buna, which is operated by the Arab Regional Payments, Clearing and Settlement Organization (ARPCSO) and supported by all Arab central banks, enables financial institutions and central banks in the Gulf and beyond to send and receive cross-border payments throughout the day in real-time in all available Arab and International currencies.
It serves as a single-entry point to the region’s financial systems for global financial institutions as well as a multi-currency and multi-instrument system for local ones.
It is anticipated that the introduction of this instant and affordable payment system will incentivize remittances through banking channels. Consequently, the inflows from various countries, primarily from GCC states, will also be reflected in the banking system, thereby bolstering the economy.
