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Digital banking growing at a rapid clip: SBP

Updated June 05, 2018

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People standing in queue to withdraw cash from an ATM outside a bank branch. At the end of 1QCY18, the number of ATMs across the country reached 13,835 and processed transactions worth Rs1.4tr, reducing the load on conventional banking.
People standing in queue to withdraw cash from an ATM outside a bank branch. At the end of 1QCY18, the number of ATMs across the country reached 13,835 and processed transactions worth Rs1.4tr, reducing the load on conventional banking.

KARACHI: Digital channels have been rapidly replacing paper-based transactions as payments through Pakistan Real-Time Interbank Settlement Mechanism in the third quarter of FY18 stood at Rs90.1 trillion against Rs38.8tr in paper-based.

The State Bank of Pakistan (SBP) on Monday issued Payment Systems Review January-March, 2018 providing details about the fast growth of digital transactions in the country.

“Banking through digital channels has been gaining increasing popularity in the country in recent years,” said the report.

Commercial banks in Pakistan are expanding their infrastructure for supporting e-payment due to SBP’s supportive policies. In January-March there were 14,850 bank branches reported by 45 banks and microfinance banks, out of which 117 are overseas branches.

“All but 23 branches in the country are providing online banking services to their customers and there are 13,835 ATM machines. In addition to these, banks offer internet, mobile phone and call centres/IVR banking facilities,” said the report. “During the quarter, PRISM processed 446,500 transactions worth Rs.90.1tr,” it added.

Commercial banks deployed 426 more ATMs by the end of the quarter, taking the country-wide total to 13,835: a 3.2 per cent increase.

During the quarter, ATMs processed 121.6 million transactions valuing at Rs1.4tr. Despite the availability of other financial services, ATMs are still most popularly used for cash withdrawals. In total transactions, cash withdrawals from ATMs have the highest share of 94.8pc in volume and 87.2pc share in value.

In Pakistan, 26 banks are currently offering internet banking service. During the quarter under review, 8.4m transactions worth Rs332.8 billion were processed through internet banking, showing a growth of 13.7pc in value. In total, 19 banks are providing mobile phone banking facility to their customers with the number of registered phone users at 3.1m.

“These users processed 5.9m transactions worth Rs112.8bn using mobile apps, depicting a quarterly increase of 12.2pc and 23pc in volume and value respectively,” said the SBP report.

The publication provided details about the various kinds of cards being used in the country. As on March 31, the total number of payment cards reached 40.1m.

Among overall reported cards, the number of debit cards is 21m (52.4pc), proprietary ATM-only cards is 8.5m (21.3pc), credit cards 1.4m (3.6pc), prepaid cards is 0.2m (0.6pc) and social welfare cards is 8.9m (22.2pc).

During the quarter under review, 142.7m transactions valuing at Rs.1.6tr were processed by these cards, of which the share of debit cards had the highest share of 85pc in value.

“During the quarter under review, 118.1m transactions of value Rs38.8tr were processed through branch banking and paper-based instruments,” stated the SBP report.

These transactions showed a decline of 3.7pc in value, compared to previous quarter.

Published in Dawn, June 5th, 2018