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ISLAMABAD: Prime Minister Shehbaz Sharif directed provincial governments on Monday to fully cooperate with the center to move the country toward a “cashless” system, a statement from his office said as Islamabad attempts to digitize its economy for greater transparency. 

Pakistan is a cash-dominated market where a significant portion of transactions, particularly in the informal sector, are conducted using cash.

The country’s central bank has taken steps in recent months to ensure a transition toward a more cashless economy so that financial transactions are more traceable, reducing chances of tax evasion and corruption. Pakistan’s digital payments have also been on the rise. Since its 2021 launch, the central bank’s Raast system has processed over 892 million transactions worth Rs20 trillion ($72 billion).

Sharif held a weekly review meeting on Pakistan’s cashless economy and digitization efforts on Monday, the Prime Minister’s Office (PMO) said in a statement. 

“The federal government should hold meaningful consultations with the provincial governments for effective and comprehensive implementation of the digitization transformation plan,” the PMO quoted Sharif as saying following a review meeting on cashless and digital economy.

“He further directed that all provincial governments, including Gilgit-Baltistan and Azad Jammu & Kashmir, should fully cooperate with the federal government in digitizing the economy and moving toward a cashless system.”

The premier said that with coordination from provinces, the federal government’s digitization transformation plan should be made more efficient so that its goals are achieved within the stipulated time.

During the meeting, Sharif highlighted that digitizing the economy will enhance transparency and offer greater convenience to the public without incurring additional costs.

“The government is encouraging digital payments and digital transfer of funds through policy measures,” the PMO quoted him as saying. 

Pakistan launched the Merchant Onboarding Framework last week that requires banks and payment providers to equip all merchants with Raast-enabled digital payment tools such as QR codes and POS [Point of Sale] systems.

Earlier in July, Sharif ordered the doubling of all key digital economy targets including mobile-based payments, QR code adoption and overall transaction volumes as part of the same plan.

The government in May also approved setting up the Pakistan Digital Assets Authority to regulate blockchain-based financial infrastructure.

Pakistan, a country of over 240 million people, has a vast informal economy and low tax compliance. The government has long identified digitization as a key tool to improve governance, reduce corruption and expand the country’s narrow tax base.

KARACHI: Pakistani police said on Monday it had gunned down three militants during an intelligence-based operation in the southern port city of Karachi last night, among them the mastermind of an attack that targeted Chinese nationals last year. 

Counter-Terrorism Department (CTD) Deputy Superintendent of Police Raja Umar Khattab told Arab News police carried out a raid at a house in Karachi’s Manghopir area on Sunday night, in coordination with intelligence agencies, where the militants were hiding. He said the three militants were shot dead after a shootout ensued with police. 

The CTD official said the militants were part of the “Khawarij” group, a term the Pakistan military regularly uses for the Tehreek-e-Taliban Pakistan (TTP) militant outfit. The militants have been identified as Zafran, Qudratullah and Matiullah alias Abu Nasir, Khattab said. 

“Among those killed, Zafran was the mastermind behind last year’s attack on Liberty Textile Mill in the SITE area of Karachi which targeted Chinese nationals,” Khattab said. “He had recruited the attacker, Sharifullah, as a security guard, provided him with weapons, and later facilitated his escape to Afghanistan.”

Khattab was referring to the incident which took place in Karachi in November 2024. A security guard, Sharifullah, had injured two Chinese nationals working on installing a machinery in Liberty Textile Mill by firing at them. 

Khattab said the government had announced a bounty of Rs20 million [$71,942] on Zafran’s head. The CTD official said hand grenades, a suicide vest and a diary were recovered from the slain militants’ possession.

He added that the diary contained details of several potential targets the militants wanted to attack, among them the Police Training Center in Karachi’s Baldia Town.

Militant groups have previously carried out attacks against Chinese nationals in the country. In October 2024, two Chinese nationals were killed in a suicide bombing near the Karachi airport, which was claimed by the separatist outfit Baloch Liberation Army. In March 2024, another suicide bombing killed five Chinese engineers and a Pakistani driver in northwestern Pakistan as they were traveling to the Dasu Dam. This attack was claimed by the TTP. 

Chinese nationals have been in the crosshairs of separatist militants who believe Beijing is helping Pakistan exploit minerals in the underdeveloped southwestern province of Balochistan, where China has a strategic port and mining interests. China and Pakistan have both denied the allegations. 

Beijing has been pushing Islamabad to provide foolproof security to Chinese citizens working in Pakistan , frustrated by the string of attacks on its nationals. Pakistan has repeatedly assured China it will provide safety to its citizens in the country.