SBP revamps branchless banking regulations

Move meant to achieve targets of financial inclusion

KARACHI: The State Bank of Pakistan (SBP) has revamped branchless banking regulations to achieve the targets set out in the National Financial Inclusion Strategy (NFIS) of Pakistan, a statement said on Wednesday.

The regulatory framework outlines the minimum requirements to be adopted by banks offering branchless banking in the marketplace.

According to the revised regulations, the board of directors of banks would be responsible to provide the strategic direction and maintain oversight while senior management will institute necessary internal controls and ensure adherence to applicable laws and regulations.

The scope of alternative delivery channels and technologies has been expanded through revised regulations to include 3G and 4G spectrum, point-of-sale (POS) terminals, internet banking and ATM/debit cards etc for providing branchless banking services.

The transaction limits for Level-0 and Level-1 branchless banking accounts have been increased to encourage opening of more branchless banking accounts. Level-3 accounts have been merged with Level-2 accounts for facilitation and operational ease of customers and the banks.

Level-1 accounts will be opened through either traditional account opening process or biometric verification system. Further, the SBP has also allowed opening of remote accounts for Level-0 customers to promote financial services among all segments of society.

The SBP has also introduced person-to-Inter Bank Funds Transfer (IBFT) service with and without the biometric system. The limit for person-to-person (non-accountholders) transactions conducted through the biometric verification system has also been increased.

The SBP launched the NFIS in 2015 wherein a target of 50% growth in bank accounts by adult population by 2020 has been set to enhance the outreach of basic financial services to the unbanked/underserved population.

Published in The Express Tribune, July 14^th, 2016.

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