News Updates

SBP Relaxes Banking Regulations & Process to Prevent COVID-19 Spread

As a precautionary measure to avoid the spread of COVID-19, the State Bank of Pakistan (SBP) has announced a relaxation — effective from January 1, 2022, in various banking rules, regulations, and processes till June 30, 2022.

According to a notification issued by SBP, banks/microfinance banks (MFBs) may utilize NADRA Verisys in place of biometric verification, where the same is not possible or appropriate due to the risk of COVID-19 spread while complying with controls and measures.

The banks/MFBs will continue with the enhanced transaction limit of Rs. 500,000 per month and the maximum account balance of Rs. 500,000 for non-biometrically verified merchant accounts.

SBP has revealed that the Authorized Financial Institutions (AFIs) or branchless banking companies will not downgrade non-biometrically verified Branchless Banking (BB) legacy Level-1 accounts to Level-0.

The notification makes it clear that the relaxations, unless instructed otherwise, will automatically stand withdrawn upon expiry of the extended timeline of June 30, 2022 and, thereafter, banks/ MFBs will follow the applicable regulatory instructions in the related areas.

Moreover, banks and financial institutions can continue to provide Person-to-Person (P2P) transfers through branchless banking channel, as stipulated under Branchless Banking Regulations for Financial Institutions, till June 30, 2022.

SBP has advised the banking institutions to take necessary measures, such as creating customer awareness and making adjustments in their business model and infrastructure accordingly.

Banks can block customers’ accounts without valid identity documents after serving one-month prior notice as stipulated in the AML/CFT/CPF Regulations. These institutions could mark accounts as dormant/in-operative as defined in the AML/CFT/CPF Regulations.

Banks have been advised to conduct biometric verification for all cash in or cash out transactions in Branchless Banking Level-0 accounts, as mentioned in Branchless Banking Regulations for Financial Institutions.

Meanwhile, banks/MFBs haver further been asked to take appropriate steps to ensure smooth transition to normal operations without COVID-19 related regulatory forbearance.

Source: Pro Pakistani