Bank account holders can invest in equity market

Published March 30, 2022
Reza Baqir, Governor of the State Bank of Pakistan (SBP), gestures during a news conference at the head office in Karachi on January 22, 2021. — Reuters/File
Reza Baqir, Governor of the State Bank of Pakistan (SBP), gestures during a news conference at the head office in Karachi on January 22, 2021. — Reuters/File

KARACHI: Under the State Bank of Pakistan’s (SBP) ‘Shared KYC (Know Your Customer) Project’ resident investors can open accounts in the capital market using their bank’s portal or app, central bank governor Dr Reza Baqir said on Tuesday, adding that the move will pave the way for wider outreach of the equity market.

During a visit to the Central Depository Company (CDC) to mark the successful operations of important projects for Pakistan Capital Market, namely Roshan Equity Investment for Roshan Digital Account (RDA) holders and Raast for dividend payments, Dr Baqir appreciated the CDC’s role. The successful roll-out of important projects of national interest like RDA, of which Roshan Equity is a component, and Raast have been initiated by the central bank and very well executed by commercial banks, he said.

He acknowledged that CDC has played an active role in the operations of Roshan Equity.

“This is only the beginning of what our vision is for the development of Pakistan’s Capital market,” said Dr Baqir.

“For the Shared KYC Project, CDC will again act as the information sharing bridge for the digital opening of capital market accounts through banking portals for local resident investors with the objective of removing duplication of information capture and KYC processes,” said CDC CEO Badiuddin Akber.

The CDC is already processing thousands of transactions related to Roshan Digital Accounts and Raast for the Pakistan Stock Exchange.

Meanwhile, brokerage houses said the Shared KYC Project is good for the growth of the equity market.

“This will save a lot of time and effort for opening a broker account and may help in increasing the investor base,” said Mohammad Sohail, the CEO of Topline Securities.

“I think this is very helpful as account opening has been a major issue in Pakistani market,” said Samiullah Tariq, head of research at the Pak-Kuwait Investment and Development Company. “The investment ratio is very low on per capital basis compared to regional countries,” he said, adding that the number of investors is almost one tenth of Bangladesh market.

He was of the view that this initiative should help increase penetration in the domestic investors and attract domestic investors towards formal avenues including investment in the equity market.

“It will also help grow companies and raise capital when new investors are seeking investment avenues,” he added.

Published in Dawn, March 30th, 2022

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