State Bank of Pakistan reforms branchless banking regulations

branchless banking regulations SBP

The State Bank of Pakistan has reformed branchless banking regulations to accomplish the objectives set in the Financial Inclusion Strategy (NFIS) of Pakistan, a statement said on Wednesday.

SBP has revised regulations to ensure customer protections, minimize risk factor for banks, and promote the bank-led model of branchless banking. It has permitted the financial institutions including commercial banks, Islamic banks and microfinance banks aiming to undertake branchless banking to set the transaction limit.

The central bank said financial institutions cannot handle branchless banking without the help of telecommunication companies, technology service providers and agents.

The scope of alternative technologies and delivery channels has been expanded to include 3G and 4G spectrum, the point of sale terminals, internet banking, and ATM or debit cards.

“The financial institutions can issue personalized ATM/debit cards to their branchless banking customers subject to the condition that such cards shall be used for domestic transactions only,” SBP said.

SBP had issued the framework for the branchless banking regarding agent acquisition to make this service more efficient a month earlier.

Transaction limits for branchless accounts

SBP has categorized branchless accounts into three levels. The transaction limit for first two levels has been set at PKR 25,000 and PKR 50,000 per day and PKR 40,000 and PKR 80,000 per month, respectively.

However, the revised branchless banking regulations have authorized banks to set the transaction limit and monitor activities of third level branchless accounts.

The central bank has also announced Inter Bank Funds Transfer (IBFT) service with and without the biometric system. It has also increased the limit for person-to-person transactions conducted through the biometric verification system.

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