In an effort to support freelancers and boost IT exports, the State Bank of Pakistan (SBP) has introduced a comprehensive framework for opening and operating digital bank accounts. The development was announced through a circular notification to the CEOs and presidents of all the banks.
Under this framework, freelancers will have the opportunity to open an Exporters’ Special Foreign Currency Account (ESFCA) as specified in the Foreign Exchange Manual, which will enable them to retain a higher percentage of their export earnings. For IT exporters, their ESFCAs have been increased from 35% to 50% of their export earnings.
All existing Freelancer Digital Accounts (FDAs) will be treated as opened under the new framework, which aims to streamline the account opening process for freelancers, making them digital with minimum documentation requirements and offer both physical account opening options.
Freelancers can now deposit up to 50% of their export earnings or a minimum of USD 5,000 per month in their ESFCAs. Additionally, they can make payments directly from these accounts without requiring approval from the State Bank or banks.
Additionally, the SBP has advised banks to facilitate the issuance of debit cards to IT exporters, enabling them to make online payments from their ESFCAs balance.
The framework is expected to provide greater flexibility to freelancers and IT exporters and empower them to generate more business from foreign clients, which will ultimately contribute to increased foreign exchange earnings for the country.
Recent initiatives by the State Bank of Pakistan are aimed at simplifying and enhancing the banking experience for freelancers and IT exporters while encouraging the growth of Pakistan’s IT and IT-enabled services industry. The revised framework provides an opportunity for these professionals to increase their earnings and bring additional foreign exchange to the country.
The initiative is seen as a major step towards promoting an enabling environment for the gig economy and promoting greater financial inclusion for freelancers and IT exporters. It is expected to have a positive impact on the country’s foreign exchange reserves and tax revenues.