The State Bank of Pakistan (SBP) has decided to look into strategic collaboration of NADRA with MasterCard. According to The Express Tribune, this inquiry is based on concern over the security of the national database and NADRA’s mandate.
Abid Qamar, chief spokesman for the SBP, said that they are looking into this agreement and is in the process of getting more information from the two parties involved. MasterCard and NADRA announced during World Economic Forum that Pakistani Citizens would be able to use their identity cards to conduct financial transactions and receive government disbursements as well as remittances as a result of their partnership.
The agreement that was signed in Switzerland has created many concerns for the central bank as MasterCard’s servers are not present in Pakistan, and also payment service and financial transactions don’t fall under the jurisdiction of NADRA.
NADRA lacks the mandate to venture into the area of payment services as it falls under Payment Service and Electronic Funds Transfer Act of 2007 and would require approval from SBP that it hasn’t sought. Also, the press release issued about this agreement mentioned that Pakistanis would be able to receive remittances but no permission has been asked from Pakistan Remittance Initiative and without its authorization NADRA cannot receive remittances from abroad.
The servers of MasterCard are on foreign soil, and not all of those countries have friendly ties with Pakistan. NADRA holds the data of almost all its citizens from their CNIC numbers, personal information to their finger prints, etc. which can be at risk if the servers are not in Pakistan. It has been reported that there are around 10,000 attacks per month on NADRA attempting to crack its database which so far has never been successful. With servers in the foreign jurisdiction, there is a chance of replication of user information.
Also, contrary to the press release this agreement involves three parties NADRA, MasterCard and Faysal Bank instead of two. According to a source that confided to The Express Tribune, Faysal Bank was involved only to meet the regulatory requirements of the SBP.