CGAP (Consultative Group to Assist the Poor) reports that the State Bank of Pakistan (SBP), the nation’s central banking authority, recently announced modifications to its branchless banking regulations that include: removal of the requirement to have one’s fingerprint scanned to open an account; increases in transaction limits and the elimination of the maximum balance; and introduction of “Level 0” accounts that can be opened electronically, without physical paperwork. CGAP quotes Mr Mansoor Hassan Siddiqui, the Director of the Banking Policy and Regulations Department at SBP, as stating that “the purpose of these regulations and the recent amendments was to help expand the outreach of the banking channels so that the financially excluded population can have easy access to formal financial services.”
The branchless-banking regulations were introduced in 2008 in order to encourage branchless banking and ease of operation of these accounts. Among the modifications, Mr Siddiqui cited the introduction of “Level 0” accounts as the most important since “this will encourage more and more people to open a Mobile Wallet Account.” Mr Siddiqui added, “In the medium term (i.e. three years’ time), I expect a reasonably significant number of banks, specifically the larger banks with an extensive presence in the country, to be offering branchless banking services with over 30,000 branchless banking agents and at least 5 million branchless banking users.” The total number of branchless banking accounts now reportedly stands at approximately 500,000.
By Carol Kim, Research Associate
About Consultative Group to Assist the Poor (CGAP): Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center dedicated to facilitating the provision of financial access to poor people worldwide. CGAP is supported by approximately thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.
About State Bank of Pakistan (SBP): Established in 1956, the State Bank of Pakistan (SBP) is the nation’s central banking authority. SBP is responsible for the following primary functions: to regulate and supervise the nation’s financial system, to carry out monetary policy and to manage public debt. In addition, SBP performs the following non-traditional functions: developing the financial framework of the country, providing credit to priority sectors and furthering the Islamization of the banking system.
Sources and Additional Resources:
Consultative Group to Assist the Poor (CGAP): “State Bank of Pakistan Removes Barriers to Branchless Banking”, July 2011, http://technology.cgap.org/2011/07/25/state-bank-of-pakistan-removes-barriers-to-branchless-banking/
MicroCapital.org: “MICROCAPITAL BRIEF: Reporting Tepid Growth, State Bank of Pakistan (SBP) Permits Microfinance Institutions (MFIs) to Accept Gold as Collateral”, June 13, 2011, https://www.microcapital.org/microcapital-brief-reporting-tepid-growth-state-bank-of-pakistan-sbp-permits-microfinance-institutions-mfis-to-accept-gold-as-collateral/
MicroCapital.org: “MICROCAPITAL BRIEF: Standard Chartered Bank (Pakistan) Closes $6.9m Loan to Tameer Micro Finance Bank Limited (TMFB) With Support of State Bank of Pakistan’s Micro Finance Credit Guarantee Facility”, April 1, 2011, https://www.microcapital.org/microcapital-brief-standard-chartered-bank-pakistan-closes-6-9m-loan-to-tameer-micro-finance-bank-limited-tmfb-with-support-of-state-bank-of-pakistans-micro-finance-credit-guarantee-facility/
MicroCapital’s Universe Profile: Consultative Group to Assist the Poor (CGAP), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29
MicroCapital’s Universe Profile: State Bank of Pakistan (SBP), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=State+Bank+of+Pakistan+%28SBP%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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