8/22/2019 SBP regulation for Branchless Banking

1/2

June20,2011

StateBankrevisesBranchlessBankingRegulationstobring

low

income

segment

of

society

into

financial

loop

TheStateBankofPakistan(SBP)hasrevised/amendedtheexistingBranchlessBanking

RegulationsforFinancialInstitutions(FIs),whichincludecommercial,Islamicandmicrofinance

banksforexpandingtheoutreachofbranchlessbankingoperationsinthecountry.

Theseamendments in theRegulations shallbe immediatelyapplicable toallpotential

FIs.FinancialInstitutionswhichhavealreadybeenallowedtoofferbranchlessbankingservices

have been advised to streamline their existing operations/processes as per amended

Regulationswithinsixmonths,andreportcompliancetoSBP,accordingtoBPRDCircularNo.09

of2011.

Accordingtotheseamendments,SBPhas introducedLevel 0BranchlessBanking(BB)

Accountstobringthelowincomeearningsegmentofsocietyintofinancialservicesloop.With

theintroductionofLevel0BBAccounts,now,insteadofsendingthephysicalAccountOpening

formandcopyof customersCNIC to theFinancial Institution (FI) for furtherprocessing, the

branchless banking agents have been allowed to send the Digital Account Opening form,

customersdigitalphotoandanimageofcustomersCNICtotheFIelectronically.

ThenewcategoryofLevel 0BBAccountwillprovide flexibility to theAgentand the

Financial Institution (FI) foropeningofbasicBB accountswhile rationalizing the KnowYour

Customer(KYC)

requirements

in

line

with

the

transaction

limits.

The following transactionandmaximumbalance limitsonLevel0Accountsshallbe

applicable: Daily Limit Rs. 15,000, Monthly Limit Rs. 25,000, Annual Limit Rs. 120,000 and

MaximumBalanceLimitRs.100,000.

Similarly, the transaction limits of Level 1 Branchless Banking Accounts have been

reasonably increased to cater to theneedsof the customersby rationalizing theKnowYour

Customer(KYC)requirements.Now,allservicespermissibleunderexistingBranchlessBanking

RegulationsshallbeavailabletoLevel1accountholders.

Thetransaction

and

maximum

balance

limits

applicable

to

Level

1

Accounts

will

be:

DailyLimitRs.25,000(previous limitwasRs10,000),MonthlyLimitRs.60,000(previous limit

wasRs20,000)andAnnualLimitRs.500,000(previouslimitwasRs.120,000).Therewillbeno

MaximumBalanceLimit,accordingtotheamendments.

Other salient features of revised/ amended Branchless Banking Regulations are as

under:

8/22/2019 SBP regulation for Branchless Banking

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AllBBaccountholdersshallbeallowedtotransferuptoRs.25,000permonthtononaccountholders.

Financial Institutions (FIs) are allowed to provide PersontoPerson Funds transferservicetocustomers(sendersandreceivers)uptothetransactionlimitofRs.15,000for

onecustomer

in

amonth.

PersonsavailingthisserviceshallberegisteredbytheFIafterdueverificationprocessforsubsequenttransactions.

DuringtheverificationofcustomerdatafromNADRA, if it isfoundthattheagenthasopenedanycustomeraccountorhasprocessedafundstransfertransactiononthebasis

ofafakeorincorrectinformation/document,theFIsshalltakeappropriatepenalaction

including blacklisting of agent or termination of agency agreement. FIs shall device

mechanismforongoingagentsupervisionandmonitoring.

TheFIsshallformulatestandardizedguidelinesforcapturingcustomersphotograph&imageofCNICatagentlocationstopreventimpersonationofidentity.

The requirement of throughput limit has beenwithdrawn on Level 1BBAccounts.However, throughput requirementsshallnotbeapplicableonnewly introducedLevel0Accountsaswell.

TheBranchlessBankingaccountholders shallbeable topay theirutilitybillswithoutexhaustingtheirBBaccountlimits.

Keeping in view the LevelofBBAccount, the transaction limits allowed and theRiskProfileofeachcustomer,theFIssystemshouldbecapableofcarryingouteffectivedue

diligenceonacontinuousbasis.

ThephraseTransactionProcessingSystem(TPS)hasbeenreplacedwithThirdPartyServiceProvider(TPSP).FIsshallenterintoarrangementwithTPSPafterobtainingprior

regulatoryapprovals.

FIsareallowedtoopenmultipleLevel2andLevel3AccountsofthebranchlessbankingcustomersafterdueKYCproceduredefinedfortheregularbankaccount.

FIs are allowed to maintain branchless banking customer accounts as remunerativeaccounts in order to encourage opening of more accounts. FIs shall develop a

remunerationmechanismforallLevelsofBBaccounts.

FIsentering intoBranchlessBanking shallbe required to submitquarterly reportsonfinancialdataofBBinitiativestoStateBankofPakistanonaprescribedformatandshall

alsoprovideonmonthlybasis, thecustomerscomplaintsof fraud& forgery incidents

andtheactiontakenbyFIs.

ToensurethesuccessoftheBBinitiative,FIsshouldhaveapolicyofzerotoleranceforfraudulent

activities.

FIsshouldhaveaproperpolicy framework inplaceon takingpenalactionagainstthebranchlessbankingagentsincaseitisestablishedthattheagentisinvolvedinanykind

offraud,forgery,misinformationandmisreportingetc.

*****