Prime Minister Imran Khan and State Bank of Pakistan (SBP) Governor Dr. Reza Baqir today announced the launch of Roshan Apni Car initiative which aims to allow non-resident Pakistanis (NRPs) to purchase vehicles in Pakistan through their Roshan Digital Accounts (RDAs).
“RDA was conceived to offer lifestyle banking products in Pakistan to overseas Pakistanis, including money deposit facilities, investment opportunities in Naya Pakistan Certificates (NPCs), the stock market and real estate, as well as other day-to-day payment facilities,” said the SBP in a press release.
“This suite of lifestyle products is being constantly expanded, with today’s launch of Roshan Apni Car and Roshan Samaaji Khidmat being the latest example.”
The RDA holders will be able to apply for car financing in Pakistan digitally with quicker processing time, attractive financing and insurance rates and through both conventional as well as Shariah-compliant forms.
“Only from RDAs, we believe Pakistan car market may attract $200-300 million during next two years. This is based on analysis that 10 percent of funds which are being parked in deposit accounts will be utilized for purchase of local cars,” said Sherman Securities in a research note.
It added that as per the latest SBP data, there are approximately 9m Pakistanis residing abroad, out of which around 0.12m have opened RDAs so far in the last eight months.
Sharing the breakdown of investments through RDAs, the research notes further highlighted that so far, NRPs are maintaining average account size of $8,300 out of which 65pc is allocated to the NPCs, 25pc in shares market (PSX) while rest is allocated in deposit accounts.
“If we assume 15-20pc of overseas Pakistani families open RDAs during next two years and divert 10pc of the funds towards automobiles, the local car market may attract $200-300m during next two years,” it added.
“Roshan Apni Car has been specially designed for Overseas Pakistanis and has many distinguishing features,” said the SBP governor during a press conference.
Pakistan’s annual car sales are estimated to be over 180k units with market size of Rs550bn ($3.5bn) while average per car value – including taxes and federal excise duty (FED) – is around Rs3m (Rs5.3m including car financing on five-year terms).
Sherman Research pointed out that “overseas Pakistanis have potential to buy 10k-13k cars per annum during next two years. We believe annual car demand may increase by 5-7pc.”
“Moreover, car manufacturers have committed to significantly slashing the car delivery time for RDA holders,” the SBP pointed out in the press release.