Pakistan intends to digitize all payments made by federal, provincial, and local governments as well as state-owned enterprises by June 2026, a parliamentary committee has been informed on Thursday.

During a briefing to the National Assembly Standing Committee on Finance and Revenue, State Bank of Pakistan (SBP) Governor Jameel Ahmad outlined the government’s strategy for a cashless economy. He indicated that the central bank has also decided to link Raast, Pakistan’s instant payment system, with the Arab Monetary Fund’s Buna platform to enhance the speed and security of remittances from expatriate Pakistanis, though this arrangement will not facilitate outward remittances.

Buna, which was established in 2020, functions as a multi-currency cross-border payment system under the Arab Monetary Fund. It currently accommodates currencies such as the Saudi Riyal and Emirati Dirham and plans to incorporate the Chinese Yuan to boost regional commerce.

Governor Ahmad pointed out that the digital payments framework in Pakistan has experienced swift adoption. He mentioned that the annual transaction volumes for Raast, which used to be recorded over a year, are now processed within a mere nine days. Furthermore, he stated that the system currently supports 226 million accounts, 46 million Raast IDs, and more than 95 million active users of mobile banking.

SBP officials informed the committee that all payments at the federal and provincial levels are set to be digitized by June 2026, with state-owned enterprises expected to transition by December 2026. This initiative encompasses salaries, pensions, taxes, and utility payments. Finance Secretary Imdadullah Bosal explained that the process will be gradual, with the government bearing the costs to promote adoption.

The central bank is also implementing measures to enhance security, which will include a liability framework making banks responsible for losses arising from fraud or system errors, provided complaints are lodged within two hours. Additionally, a two-hour cooling-off period will be enforced on certain transactions to mitigate risk.

Ahmad emphasized the recent introduction of Mashreq Bank’s digital operations in Pakistan, which was completed in just 12 months, significantly quicker than the international average of five years. The bank has also established its global middle office in Pakistan.

Furthermore, five additional digital banks have received in-principle approval to start operations.

Deputy Governor Saleem Ullah stated that the digital ecosystem includes 19,000 bank branches, 20,000 ATMs, and 850,000 QR-enabled merchants. He added that offline transactions will also be available, with no fees imposed on consumers.

Committee members expressed concerns regarding low financial literacy rates, regulatory gaps, and unreliable internet connectivity. MNA Hina Rabbani Khar raised the issue of whether the system could function effectively while a significant portion of Pakistan’s economy remains undocumented.