Opening bank accounts
In Pakistan, a large number of people are excluded from availing banking facilities either due to legal reasons, excessive paperwork, or the inconvenience of visiting a bank. Women, trans persons, self-employed and those in the informal economy are deprived of availing these facilities and remain on the fringes.
According to a report, only 62% of adults have a bank account. It is further revealed that women hold only 14.5 million active bank accounts in Pakistan, which is only 27% of the total active accounts. The major chunk, 73% or 37.8 million, belongs to men, showing the gender imbalance in financial inclusion.
The government has launched the ‘Banking on Equality’ initiative to remove the disparity and encourage women to open a bank account. This a certainly a step in the right direction as every citizen has the right to financial inclusion but unfortunately, the gap is gradually rising and requires more efforts. It is known that many women are willing but are not part of the banking sector. Financial institutions are instructed to increase women staff to at least 20% by December 2024 and bring more women-centric policies.
The State Bank of Pakistan recently also allowed all citizens to open bank accounts through digital channels without visiting a bank branch using websites or mobile apps. Around the world, opening a bank account is a simple task for all residents with a legal identity card but in Pakistan, there are numerous legal procedures which discourage people.
The government should make it convenient for all residents to open a bank account. It should also allow freelancers, self-employed or unemployed women, and recipients of remittances from abroad to open bank accounts with minimum documentation requirements. It will also help ensure that all transactions are documentation are known to tax authorities.
Pakistan is still placed on the FATF’s grey list despite making progress. It should work towards ensuring financial inclusion for all segments of society by promoting the digitalization of bank services in the country. Those who are excluded should be included in the system so they can fulfill their financial needs through swift and secure digital financial infrastructure in Pakistan.