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Business Recorder
12 hours ago
- Business
- Business Recorder
Friction for cash, ease for digital: Pakistan's road to documenting the economy
Pakistan stands at a pivotal economic crossroads. With our national instant payment system RAAST processing 371 million transactions worth Rs8.4 trillion in first quarter of 2025 — a 164.5% increase in volume and a 146% surge in value from the previous year — it is enabling real-time digital payments, reducing cash dependency, and significantly improving transaction transparency. Yet, an estimated 37.5% of gross domestic product (GDP) remains in the shadow economy, representing a significant untapped opportunity. Digital payments are essential for a modern economy, enabling efficient government services and expanding financial inclusion. The challenge lies not in enforcement, but in making formal systems accessible and affordable. Global examples like Brazil and Kenya demonstrate the benefits of payment digitisation; in these countries, digital reforms not only improved convenience for citizens, but also redefined governance, expanded financial inclusion, and enhanced transparency. These outcomes aren't outside the realm of possibility for Pakistan either. With over 143 million broadband users the country has the potential to transform into a cashless economy. Mobile wallets now outnumber traditional bank accounts, and branchless banking infrastructure is robust, yet 90% of e-commerce is still cash-on-delivery. Even many government disbursements rely on paper-heavy, fraud-prone systems. Pakistanis clearly will adopt digital when it's easy, trusted, and backed by institutional will. But Pakistanis do adopt digital when given reliable and accessible solutions, and we've seen that firsthand. The country has one of the world's largest digital payments networks, with over 123 million branchless banking accounts and maintain a distribution reach 37 times greater than the traditional banking network. Pakistan govt's budget steps may hinder cashless economy drive: TOAP Its 704,000 agent touchpoints represent a parallel financial ecosystem that has enabled access to services in every corner of the country, especially the under-served areas. One recent example illustrates the impact of digital intervention. During the Prime Minister's Ramazan Relief Fund programme, JazzCash disbursed funds to over 1.1 million beneficiaries, of which more than 600,000 were via wallets. Not only were there zero leakages through this channel, but it also offered recipients, especially women in rural areas, more convenience, dignity, control, and visibility over their finances compared to the CNIC-based method where they often to wait in queues. We've also seen how policy direction paired with existing infrastructure can drive rapid adoption. After Frontier Works Organisation (FWO) mandated digital toll payments, JazzCash M-Tag volumes grew significantly in transaction count within a year. Pakistanis clearly will adopt digital when it's easy, trusted, and backed by institutional will. In a significant move underscoring this commitment, Prime Minister Shehbaz Sharif has constituted a high-level steering committee, including key federal ministers, the State Bank Governor, FBR Chairman, and leaders from major banks and payment platforms, to accelerate the adoption of digital payments and realise a cashless Pakistan. Meeting weekly, the committee is responsible for coordinated, institutionalised reforms to formalise the economy, reduce reliance on cash, and ensure greater convenience for citizens, launching a series of ambitious initiatives to expand and incentivise digital payments across the country. We need to capitalise on this unprecedented high-level push and move Pakistan decisively toward a cashless economy through a coordinated strategy anchored in five critical interventions. First, digital payments acceptance must be mandated nationwide. This requires strict district-level enforcement to ensure all merchants accept digital payments, alongside enhanced RAAST merchant account limits to support widespread adoption and usage. Second, digital payments should be incentivised through targeted fiscal measures. Reducing the sales tax to 5% on all digital payments, providing Federal Excise Duty exemptions on merchant discount rates, and granting a three-year tax audit break for businesses embracing digital acceptance would make digital transactions more attractive. Additionally, exempting duties on payment acceptance devices for two years would lower the cost of entry for merchants. Third, the government must accelerate the digitalisation of its own payments. Mandating RAAST QR codes for all citizen-to-government (C2G) payments, transitioning the Benazir Income Support Programme fully to digital wallets, and adopting digital wallets for all government disbursements—including social welfare, Zakat, and pensions—will ensure that public funds are delivered efficiently, transparently, and securely. Fourth, cash payments should be made more expensive to discourage their use. This can be achieved by introducing a surcharge on over-the-counter government cash payments, capped at Rs100, and by limiting cash-on-delivery transactions to Rs10,000. Furthermore, mandating digital payment acceptance across all logistics companies will help reduce the dominance of cash in e-commerce and related sectors. The question is not whether we can become a cashless society, but whether we possess the collective will to seize this opportunity decisively. Finally, robust data monitoring and public awareness must underpin these efforts. Live dashboards at the Prime Minister's Office should track progress in real time, while financial institutions must be assigned specific, time-bound targets. A national awareness campaign is also crucial to educate the public and drive widespread adoption of digital payments. Above all, the objective is to create friction for cash and ease for digital. The rapid adoption of M-Tags after toll digitisation demonstrates that when digital payments are more convenient and cost-effective, Pakistanis will make the switch. Implementing these measures decisively can unlock the country's digital potential and bring the informal economy into the formal fold. This digital transformation will come at a price, but the cost of inaction is far greater, which we are already bearing. Due to the sheer size of our informal economy, Pakistan's tax-to-GDP ratio hovers around 10%. Formalising the economy through digital means is our best shot at raising that without imposing new taxes. Examples from other markets demonstrate that the government-backed digital payment initiatives have a huge multiplier effect. When citizens receive government benefits digitally, they become active participants in the digital economy, driving merchant acceptance and creating network effects benefiting the entire ecosystem. The transition to a cashless society represents more than a technological upgrade, it constitutes an economic imperative determining Pakistan's global marketplace competitiveness. In Pakistan too, we have seen firsthand how branchless banking and fintech players have enabled digital transformation in the remotest areas by ensuring smooth access to the most basic financial services. The technology exists, the distribution infrastructure is developing rapidly, and the public has demonstrated high readiness for adoption when solutions are convenient and reliable. The question is not whether we can become a cashless society, but whether we possess the collective will to seize this opportunity decisively. While we welcome recent measures in the federal budget aimed at promoting formalisation and enforcement, policymakers must remain vigilant about persistent leakages through cash transactions. A gradual, well-calibrated approach is essential to ensure that digital payments do not inadvertently become more expensive than cash, which would undermine adoption. Digital transactions offer transparency, while cash enables concealment of income—policy should therefore focus on penalising cash usage and incentivising digital payments. Otherwise, the risk is that suboptimal measures will drive transactions back into the cash economy, contradicting the government's vision for a digital Pakistan. The writer is CEO of Jazz; Chairman of Mobilink Microfinance Bank; and member of the Prime Minister's Cashless Economy Committee.
Time of India
13-06-2025
- Time of India
NGO worker loses Rs8.4L in matrimonial fraud
Pune: A woman (28) on Tuesday registered a complaint with the Pune cybercrime police stating that she lost Rs8.4 lakh in a matrimonial fraud. The woman is working with an NGO and residing in Yerawada. Tired of too many ads? go ad free now A case has been registered and the investigations are underway, an officer from the Pune cybercrime police said. The officer said the woman is divorced. She had made a profile on a matrimonial website for divorced people. In April, a London-based NRI contacted her after checking the profile. He told her that he was running a real estate business in London. "After a few calls, he proposed to the woman for marriage," the officer said. He said according to the complainant, the man on April 29 told her that he was coming to Pune to meet her and shared a copy of his air ticket. However, the next day, the complainant received a call from a woman, who claimed to be calling from Indira Gandhi Airport in New Delhi. The woman told the victim that the man was caught with 73,000 pounds. She demanded Rs 35,000 for issuing a certificate to allow him to enter the country with such an amount of foreign currency. "When the complainant refused to give the money, the man messaged her and requested her to pay the money. He assured her he would return the money immediately," he said. The officer said the woman then transferred money to a bank account number provided to her. The suspect kept taking money from her by claiming the charges had increased. "On May 3, the man told the complainant that he reached Pune airport, where he was again detained. Tired of too many ads? go ad free now The woman then sold her gold jewellery, borrowed money from her friend and transferred it to the bank account given to her," the officer said. He said almost a month later, the man again contacted the woman and told her that he was arrested in a money laundering case and was being taken to a court in Pune. "The man again demanded money by citing the reason for paying commission to the Pune police, lawyers and judges. The woman, once more, transferred the money," he said. Later, the man demanded money once again and she refused. She, however, received an email from 'customs' stating that the department would share that man's location only after the payment. The woman again fell prey to that trick and transferred money. "She was then told that the man had damaged a lawyer's cellphone and laptop. They took money from her under the pretext of damages. On June 2, she again transferred money for the treatment of the man," he said. The officer said after transferring Rs 8.4 lakh in total, the woman realised that she was being duped and stopped responding to the calls made by the man.
Time of India
29-04-2025
- Politics
- Time of India
Maharashtra Reclaims Raghuji Bhosale's Historic Sword in London Auction for Rs47.15 Lakh
1 2 3 4 5 6 Nagpur: In a proud moment for Maharashtra, the state govt successfully acquired the historic sword of Maratha warrior Raghuji Bhosale I at an international auction in London on Tuesday. The acquisition, which includes the cost of the auction, handling, transport, and insurance, amounted to Rs47.15 lakh, announced cultural affairs minister Ashish Shelar at a press conference in Mumbai. Calling it a proud moment for the state, Shelar credited chief minister Devendra Fadnavis for leading a rapid and coordinated response to secure the prized artefact, including contacting the Indian embassy in London and securing the sword through mediated auction. "This is the first time our govt retrieved such a significant historical object from abroad," Shelar said. TOI had reported on April 28 that the sword linked to Raghuji Bhonsle I was listed for auction at Sotheby's London as part of a high-profile collection of arms and armour. The listing described it as an 18th-century khanda, with an estimated value between £6,000 and £8,000 (roughly Rs6.3 to Rs8.4 lakh). On Monday, Mudhoji Bhosale, currently residing in Nagpur and a descendant of Raghuji Raje, had written to the Prime Minister, home minister, chief minister, and culture minister, urging them to ensure the sword returns to Maharashtra, its rightful home. Following the letter, sources confirmed that a phone call took place between Mudhoji and chief minister Devendra Fadnavis at 1.50am on April 29 to discuss the matter. Mudhoji is also expected to address the media at a press conference on Wednesday. Fadnavis said in a tweet, "I'm happy to share that the Maharashtra govt successfully brought back the historic sword of Raghuji Bhosale from a London auction. This priceless treasure, tied to the proud legacy of Nagpur and the Maratha Empire, will now return home. Thanks to the swift action by our cultural affairs team, this rare symbol of valour and heritage comes back where it belongs — in Maharashtra." The sword is a rare example of the Maratha 'Firang' type — a straight, single-edged European blade with an intricately crafted Mulheri Ghat hilt, adorned in gold and wrapped in green cloth. Most notably, the sword bears a Devanagari inscription in gold: 'Srimant Raghoji Bhosale Senasahib Subha Firang', marking it as a personal weapon of Raghuji Bhosale I. Experts believe the sword may have been taken out of the country during British looting after the Battle of Sitabuldi in 1817, when the East India Company defeated the Nagpurkar Bhosales and seized valuable artefacts from their treasury. Raghuji Bhosale I (1695–1755) was a key military leader under Chhatrapati Shahu Maharaj and the founder of the Bhosale dynasty of Nagpur. His military campaigns helped expand the Maratha Empire into Bengal, Odisha, and parts of South India. He was honoured with the title 'Senasahibsubha' for his service. "This sword is not just a weapon — it is a symbol of Maratha legacy, resilience, and pride," Shelar said. Sotheby's which conducted the auction on Tuesday, said on its portal that the basket-hilt sword (khanda) was sold for £38,100. Raje Mudhoji Bhonsle of the Nagpur royal family congratulated and thanked the Maharashtra government for acquiring the sword. His representatives also took part in the bidding process on his behalf and had bid up to Rs35 lakh, the member of the erstwhile royal family told the media.
