State Bank revises Branchless Banking Regulations to bring low income segment of society into financial loop

Banking and Finance

Karachi: State Bank of Pakistan SBP on Monday revised/ amended existing Branchless Banking Regulations for Financial Institutions (FIs), which include commercial, Islamic and microfinance banks for expanding the outreach of branchless banking operations in the country.

These amendments in Regulations shall be immediately applicable to all potential FIs. Financial Institutions which have already been allowed to offer branchless banking services have been advised to streamline their existing operations/processes as per amended Regulations within six months, and report compliance to SBP, according to BPRD Circular No. 09 of 2011.

SBP has introduced Level ‘0’ Branchless Banking BB Accounts to bring low income earning segment of society into financial services loop. With introduction of Level ‘0’ BB Accounts, now, instead of sending physical Account Opening form and copy of customer’s CNIC to the Financial Institution FI for further processing, branchless banking agents have been allowed to send Digital Account Opening form, customer’s digital photo and an image of customer’s CNIC to the FI electronically.

The new category of Level ‘0’ BB Account will provide flexibility to the Agent and Financial Institution (FI) for opening of basic BB accounts while rationalizing ‘Know Your Customer KYC’ requirements in line with transaction limits. The following transaction and maximum balance limits on Level “0” Accounts shall be applicable: Daily Limit Rs. 15,000, Monthly Limit Rs. 25,000, Annual Limit Rs. 120,000 and Maximum Balance Limit Rs. 100,000.

Similarly, transaction limits of Level 1 Branchless Banking Accounts have been reasonably increased to cater to needs of the customers by rationalizing KYC requirements. Now, all services permissible under existing Branchless Banking Regulations shall be available to Level “1” account holders.

The transaction and maximum balance limits applicable to Level “1” Accounts will be: Daily Limit Rs. 25,000 (previous limit was Rs 10,000), Monthly Limit Rs. 60,000 (previous limit was Rs 20,000) and Annual Limit Rs.500,000 (previous limit was Rs. 120,000). There will be no Maximum Balance Limit, according to the amendments.

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