Branchless banking is the future

State Bank to make regulatory framework flexible.

KARACHI: Branchless banking is the future of the country’s financial sector as it opens up opportunities for bringing unbanked segments of society into the financial system, said State Bank of Pakistan (SBP) Governor Shahid Kardar.

Addressing the signing ceremony between United Bank Limited (UBL) and Shore Bank International (SBI) for UBL’s branchless banking initiative (Omni banking) on Thursday, Kardar stated that the SBP is willing to make regulatory framework for branchless banking more flexible to broaden the scope of financial services in line with its financial inclusion strategy.

He added that the central bank is open to ideas and suggestions from the private sector to make this framework more conducive to expand the reach of the financial system in the country.

The governor said the existing network of 13,000 branchless banking outlets has already surpassed the total network of around 10,000 branches in less than two years.”

Kardar also highlighted that the cost of setting up a conventional bank branch is about 76 times higher than using third-party agents, while the use of mobile phones for branchless banking further reduces the cost.

UBL President Atif Bokhari explained that SBI would offer technical assistance to UBL Omni, the bank’s branchless banking initiative. “We aim to support the financial inclusion agenda of the SBP by facilitating the conversion of a large number of non-bank account holders into regular bank account holders and by incorporating them within the fold of the documented economy,” said Bokhari.

Published in The Express Tribune, January 21^st, 2011.