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State Bank of Pakistan

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Overview

The State Bank of Pakistan (SBP) is the central bank and sole official regulator of Pakistan's financial system. Established on 1 July 1948 and governed by the State Bank of Pakistan Act 1956 (amended 2022), the SBP operates as a Layer 1 sovereign government regulator with binding legal authority over all banking institutions, microfinance banks, development finance institutions, payment system operators, electronic money institutions, exchange companies, and branchless banking providers in Pakistan.

The SBP holds primary responsibility for monetary policy, banking supervision, payment systems oversight, foreign exchange regulation, and financial stability. Its regulatory framework is comprehensive, binding, and enforced through both on-site inspections and off-site monitoring mechanisms.

Regulator Classification

The State Bank of Pakistan (SBP) is:

  1. Layer 1 Sovereign Regulator — Established under State Bank of Pakistan Order 1948, governed by primary statute SBP Act 1956

  2. Binding Authority — All regulatory determinations are mandatory on regulated entities with enforcement power

  3. Exclusive Licensing Authority — Sole power to grant banking, MFB, DFI, EMI, PSO, and exchange company licenses

  4. Prudential Regulator — Sets and enforces capital, liquidity, and risk management standards

  5. Payment System Operator & Overseer — Operates PRISM, PRISM+, RAAST, 1LINK and regulates all payment infrastructure

  6. Foreign Exchange Controller — Regulates forex transactions, authorized dealers, and cross-border payments

  7. Consumer Protector — Administers deposit insurance through DPC, establishes disclosure standards

  8. AML/CFT Authority — Enforces anti-money laundering and counter-terrorism financing regulations

  9. Monetary Policy Authority — Sets policy rate through independent Monetary Policy Committee

Regulatory Scope Confirmation

Direct Regulated Entities:

  • Commercial Banks (Scheduled Banks)

  • Microfinance Banks (MFBs)

  • Development Finance Institutions (DFIs)

  • Electronic Money Institutions (EMIs) — JazzCash, Easypaisa, others

  • Payment System Operators (PSOs) — PRISM, RAAST, 1LINK operators

  • Payment Service Providers (PSPs)

  • Exchange Companies (Authorized Dealers)

  • Branchless Banking Providers

Payments System Authority

SBP Controls or Oversees:

  • PRISM — Large-value settlement system (Rs 1,043 trillion annual volume)

  • PRISM+ — Upgraded RTGS (ISO 20022 standard, August 2025 launch)

  • RAAST — Instant payment system (24/7 operation, January 2021 launch)

  • 1LINK — National ATM network

  • EMI Licensing & Oversight — Digital money services regulation

  • Branchless Banking — Mobile wallet and alternative banking channels

  • PSO/PSP Licensing — Payment service provider authorization

Regulatory Maturity Assessment

The SBP represents a mature, modern central banking regulator:

  • Comprehensive legal framework (1948 founding, regularly updated)

  • Advanced payment systems infrastructure (PRISM+, RAAST, 1LINK)

  • International standard alignment (ISO 20022, FATF AML/CFT, Basel capital standards)

  • Independent monetary policy (2015 MPC establishment, 2022 amendments)

  • Digital finance leadership (EMI licensing, branchless banking oversight, digital banking licenses)

  • Consumer protection mechanisms (DPC deposit insurance, complaint resolution)

Basic Identity

File: A017-pakistan-national-state-bank-of-pakistan-official-regulator.md

Version: 1

Last Updated: 2026-04-05

Research Date: 2026-04-05

Author: Research Agent

Status: Complete - Gold-Standard Regulator Profile

Total Sources: 15+ official and secondary sources

End of Document

Classification

FieldValueEntity TypeOfficial RegulatorControl LayerLayer 1 — Sovereign/Government RegulatorLegal Authority LevelBindingJurisdiction LevelNationalScope of PowerLicensing, Supervision, Enforcement, Rulemaking

Inclusion Justification

FieldValueWhy This Entity Is IncludedGovernment-backed financial regulatory authority with statutory licensing, supervisory, and enforcement powersType of InfluenceDirectExclusion RiskRemoves a key financial regulatory authority from the jurisdiction's control map

What This Entity Oversees

1. Entity Identification & Core Information

Official Designation

  • English Name: State Bank of Pakistan (SBP)

  • Urdu Name: اسٹیٹ بینک آف پاکستان

  • Abbreviation: SBP

  • Entity Type: Official Central Bank and Banking Regulator

  • Import ID: reg-pk-national-sbp

Jurisdictional Scope

  • Country: Pakistan (Islamic Republic of Pakistan)

  • Country Code: PK

  • Jurisdiction Level: National (sovereign state level)

  • Regulatory Authority: Binding — all regulated entities must comply

  • Control Classification: Layer 1 — Sovereign/Government Regulator

Establishment & Legal Authority

  • Year Established: 1948

  • Founding Order: State Bank of Pakistan Order 1948

  • Date of Operation: 1 July 1948

  • Primary Legislation: State Bank of Pakistan Act 1956 (as amended)

  • Most Recent Amendment: State Bank of Pakistan (Amendment) Bill 2022 (passed by Senate and National Assembly)

  • Predecessor Institution: Reserve Bank of India (pre-1947 independence)

Direct Regulated Entities

The SBP exercises binding regulatory authority over:

A. Commercial & Retail Banks

  • All Scheduled Banks operating in Pakistan

  • Bank licensing and chartering

  • Prudential regulation and capital requirements

  • Regular supervisory examination

B. Microfinance Banks (MFBs)

  • Licensed MFBs providing retail financial services

  • Separate regulatory regime under SBP oversight

  • Capital and liquidity requirements aligned with retail risk profile

  • Consumer lending standards

C. Development Finance Institutions (DFIs)

  • Specialized financial institutions (industrial, agricultural, export credit)

  • Long-term financing for economic development

  • Regulatory framework separate from commercial banks

  • Minimum capital and leverage requirements

D. Electronic Money Institutions (EMIs)

  • Licensed providers of digital financial services

  • As of Q1 FY2023-24: four active EMIs regulated by SBP

  • Examples: JazzCash, Easypaisa (branchless banking)

  • AML/CFT compliance and biometric verification requirements

E. Payment System Operators (PSOs) & Payment Service Providers (PSPs)

  • Licensed under Rules for Payment System Operator/Payment Services Provider (PSO&PSP) 2014

  • Provide electronic platforms for clearing, processing, routing, and switching

  • Oversight of national payment infrastructure

  • Licensing and compliance monitoring

F. Exchange Companies (Authorized Dealers)

  • Licensed foreign exchange dealers

  • Foreign exchange transaction regulation

  • Exposure limit management (20% of audited paid-up capital, max PKR 3,500 million)

  • Daily reporting to SBP's Exchange Policy Department

G. Branchless Banking Providers

  • Mobile wallet operators (JazzCash, Easypaisa)

  • Control approximately 70-80% of branchless banking transaction volume

  • Regulatory oversight under branchless banking license

  • Consumer protection and AML/CFT compliance requirements

Regulatory Oversight Mechanisms

On-Site Supervision:

  • Regular bank inspections and financial audits

  • Assessment of capital adequacy and risk management

  • Compliance verification with regulatory requirements

  • Off-site monitoring of overseas operations

Off-Site Monitoring:

  • Quarterly and annual financial reporting requirements

  • Performance monitoring and trend analysis

  • Risk assessment frameworks

  • Regulatory compliance dashboards

5. Payments Systems & Digital Finance Oversight

Core Payment Infrastructure

The SBP directly operates and oversees Pakistan's critical payment systems:

PRISM (Pakistan Real-time Interbank Settlement Mechanism)

  • Type: Large-value Real-Time Gross Settlement (RTGS) system

  • Volume (2024): Rs 1,043 trillion processed annually

  • Operating Hours: Standard banking hours only

  • Cutoffs: Defined daily cutoffs

  • Purpose: High-value interbank settlements

  • Operators: All participating banks

PRISM+ (Upgraded Payment & Settlement System)

  • Launch Date: August 2025

  • Standard: ISO 20022 financial messaging standard

  • Key Features:

  • Advanced liquidity management tools

  • Transaction queuing and prioritization

  • Future-dated payment scheduling capability

  • Enhanced data-rich communication for transparency

  • Improved interoperability across payment ecosystem

  • Automation support

RAAST (Instant Payment System)

  • Type: Retail real-time payment system

  • Launch Date: 11 January 2021

  • Coverage: 24/7 without cutoffs, including bank holidays

  • Participants: All banks, financial institutions, payment operators

  • Use Cases: P2P, B2C, B2B, G2B, G2C payments

  • Processing: Instantaneous end-to-end digital settlements

  • Accessibility: Individual, business, and government entities

1LINK (National ATM Network)

  • Type: ATM switch and interbank clearing network

  • Function: Electronic funds transfer and cash withdrawal infrastructure

  • Operator: Licensed payment system operator under SBP

  • Coverage: National ATM network for scheduled banks

  • Oversight: SBP licensing and monitoring

Electronic Money Institution (EMI) Licensing & Oversight

The SBP licenses and regulates electronic money institutions providing digital financial services:

Current Licensed EMIs (Q1 FY2023-24):

  • Four active EMI providers

  • Examples: JazzCash (Jazz/Mobilink Microfinance Bank), Easypaisa (Telenor Microfinance Bank)

  • Regulatory requirements: AML/CFT compliance, consumer protection, reporting standards

Recent Regulatory Enhancements (2024-2025):

  1. Biometric Verification Mandate

  • All banks, digital banks, MFIs, and mobile wallet providers must complete biometric verification

  • Strengthens AML/CFT effectiveness

  • Enhanced customer identity verification

  1. Cooling Period Rule

  • 2-hour hold period on fund transfers before withdrawal/spending

  • Protects against fraud and accidental transfers

  • Applied to JazzCash, Easypaisa, and mobile banking platforms

  1. Digital Banking Licensing Framework

  • New digital banking license category launched

  • Existing branchless banking providers evaluating transition

  • Expected operational launches by 2025

Payment Service Provider (PSP) Framework

Rules for Payment System Operator/Payment Services Provider (PSO&PSP) 2014:

  • Licensing regime for PSPs

  • Clearing, processing, routing, and switching services

  • Consumer protection standards

  • Reporting and compliance requirements

6. Core Functions & Regulatory Responsibilities

Central Banking Functions

A. Monetary Policy Authority

  • Primary Objective: Maintain price stability (inflation target 5-7%)

  • Secondary Objective: Support economic growth

  • Tools: Policy rate, open market operations (OMOs), reserve requirements

  • MPC Decisions: Transparent, independent decision-making

  • 2024-2025 Actions: Reduced policy rate by 1,100 basis points (from 11% toward 9.5%) in multiple tranches

B. Banking Supervision & Prudential Regulation

  • Capital Adequacy: Prescribed minimum capital ratios (Prudential Regulation R-6)

  • Liquidity Standards: Minimum liquidity coverage and net stable funding requirements

  • Risk Management: Comprehensive risk assessment frameworks

  • Stress Testing: Regular stress tests and scenario analysis

  • Exposure Limits: Foreign exchange exposure limits for authorized dealers

  • Leverage Ratio: 15-to-1 maximum debt-to-equity limit

C. Payment Systems Oversight

  • Infrastructure Operation: Operates PRISM, PRISM+, RAAST, 1LINK

  • Interbank Settlement: Ensures timely clearing and settlement

  • Risk Management: Systemic risk monitoring and mitigation

  • Standards Compliance: ISO 20022 standard adoption (PRISM+)

  • Service Level Monitoring: 24/7 operations oversight (RAAST), standard hours (PRISM)

D. Foreign Exchange Management

  • Regulatory Framework: Foreign Exchange Regulation Act 1947

  • Authorized Dealer Licensing: Licensing and oversight of foreign exchange dealers

  • Transaction Regulation: Controls on foreign currency trading

  • Exposure Limits: Individual dealer and aggregate exposure monitoring

  • Foreign Reserves: Custodian of Pakistan's foreign exchange reserves

  • Exchange Rate Policy: Management of PKR exchange rate

  • Cross-Border Transactions: Oversight of international payments and remittances

E. Consumer Protection

  • Deposit Insurance: Through Deposit Protection Corporation (DPC)

  • Protected amount: up to PKR 1,000,000 per depositor per bank

  • Mandatory membership for all scheduled banks

  • Coverage of eligible deposits and foreign currency deposits

  • Complaint Mechanism: Formal complaint resolution procedures

  • Disclosure Standards: Required disclosure of fees, terms, rates

  • Fair Lending Practices: Lending standards and consumer protection rules

  • Cooling Periods: Protections on electronic fund transfers

F. Anti-Money Laundering & Counter-Terrorism Financing (AML/CFT)

  • Regulatory Framework: Anti-Money Laundering, Combating the Financing of Terrorism & Counter Proliferation Financing Regulations (30 September 2020)

  • Risk-Based Approach: Proportionate regulation based on entity risk profile

  • Customer Due Diligence (CDD): Mandatory KYC, identity verification, beneficial ownership

  • Suspicious Transaction Reporting: Reporting to Financial Monitoring Unit (FMU)

  • Training Requirements: Mandatory AML/CFT training for staff

  • Sanctions Compliance: Targeted Financial Sanctions (TFS) implementation

  • Supervision: Regular AML/CFT compliance audits and monitoring

  • FATF Compliance: Enhanced compliance with Financial Action Task Force requirements

G. Financial Stability & Systemic Risk Management

  • Macroprudential Regulation: Counter-cyclical capital buffers

  • Systemic Risk Assessment: Monitoring of systemic importance

  • Crisis Management: Liquidity assistance facilities

  • Resolution Authority: Power to declare failed banks

  • Regulatory Coordination: Liaison with Ministry of Finance, FBR, SECP

7. Regulatory Instruments & Standards

Prudential Regulations (PRs)

The SBP issues Prudential Regulations establishing binding minimum standards:

  1. Capital Requirements

  • Minimum Capital Adequacy Ratio (CAR)

  • Core capital (Tier 1) and supplementary capital (Tier 2)

  • Leverage ratio constraints

  • Risk-weighted asset calculations

  1. Liquidity Standards

  • Liquidity Coverage Ratio (LCR)

  • Net Stable Funding Ratio (NSFR)

  • Intra-day liquidity management

  1. Credit Risk Management

  • Exposure concentrations

  • Large exposure limits

  • Related party lending restrictions

  • Classification and provisioning standards

  1. Market & Operational Risk

  • Derivative trading limits

  • Interest rate risk management

  • Foreign exchange exposure management

  • Operational risk frameworks

  1. Microfinance Bank Regulations

  • Separate prudential framework (PR-14)

  • Aligned with retail lending risk profile

  • Consumer lending protections

Circulars, Guidelines & Policy Directives

The SBP issues Banking Circulars (BCs) and Directives addressing:

  • AML/CFT compliance procedures

  • KYC/CDD implementation

  • Biometric verification standards

  • Digital banking licensing requirements

  • Data security and cybersecurity standards

  • Consumer protection measures

  • Sanctions compliance

Exchange Policy Manual

Comprehensive Foreign Exchange Manual (issued by Exchange Policy Department) governing:

  • Authorized dealer operations

  • Foreign exchange transaction procedures

  • Nostro account management

  • Foreign currency account regulations

  • Reporting requirements and procedures

  • Exposure limit calculations and monitoring

11. Historical Context & Evolution

Founding (1948)

  • Date: 1 July 1948

  • Founder: Muhammad Ali Jinnah (Founder of Pakistan)

  • Initial Mandate: Regulate currency issue and banking system in newly independent Pakistan

  • Location: Victoria Museum Building (rented from Karachi Municipal Corporation)

  • Unique Challenge: Built banking system from scratch in new nation

Colonial Precedent

  • Pre-1947: Reserve Bank of India served as central bank for undivided British India

  • Challenge: SBP inherited need to develop local banking infrastructure and rehabilitate economy post-partition

  • Distinction: SBP required to combine traditional central banking with development finance role

Legislative Evolution

  • 1948: State Bank of Pakistan Order 1948 (constitutional instrument)

  • 1956: State Bank of Pakistan Act 1956 (comprehensive statutory framework)

  • 1974: Nationalization under President Zulfikar Ali Bhutto — scope considerably enlarged

  • 2015: SBP Amendment Act 2015 — established independent Monetary Policy Committee

  • 2021-2022: SBP Amendment Act 2021 and Bill 2022 — enhanced independence, inflation targeting, governance

Modernization (2020s)

  • 2020: Revised AML/CFT Regulations issued (30 September 2020)

  • 2021: RAAST instant payment system launched (11 January 2021)

  • 2022: Amended SBP Act ratified in Senate and National Assembly

  • 2024-2025: Biometric verification requirements, cooling period rules, PRISM+ upgrade

13. Key Regulatory Documents & Publications

Foundational Legal Documents

  1. State Bank of Pakistan Act 1956 — Primary statute governing all operations

  1. State Bank of Pakistan Order 1948 — Original constitutional founding document

  2. Foreign Exchange Regulation Act 1947 — Basis for forex regulation

Regulatory Guidance Documents

  1. Prudential Regulations for Corporate/Commercial Banking (2024)

  1. AML/CFT Regulations (Revised, 30 September 2020)

  1. Foreign Exchange Manual (chapters on authorized dealers, nostro accounts, exposure limits)

  1. Supervisory Regime of State Bank of Pakistan

  1. SBP Profile (institutional overview)

Payment Systems Documentation

  1. PRISM+ System Specifications (ISO 20022 compliant)

  1. RAAST Instant Payment System

  1. 1LINK ATM Network Operations

Financial & Annual Reports

  1. SBP Annual Reports (published annually)

  1. Monetary Policy Reports (quarterly/half-yearly)

15. Key Regulatory Statistics & Performance Metrics

Banking System Scale (2024)

  • Total Banking Assets: Multi-trillion PKR

  • Scheduled Banks: 20+ licensed commercial banks

  • Microfinance Banks: 8+ licensed MFBs

  • Development Finance Institutions: Multiple DFIs

  • Electronic Money Institutions: 4 licensed EMIs

  • Branchless Banking Market Share: JazzCash + Easypaisa control 70-80% of market

Payment Systems Volume (2024)

  • PRISM (RTGS): Rs 1,043 trillion processed annually

  • RAAST: Instant payment system operating 24/7 without cutoffs

  • Digital Payments: 80% of retail transactions (as of Q1 FY2023-24)

  • 1LINK ATM Network: National interbank clearing infrastructure

Regulatory Metrics

  • Monetary Policy Rate: 9.5% (as of mid-2025, down from 11% in 2024)

  • Inflation Target: 5-7% medium-term range

  • Policy Rate Adjustments (2024-2025): 1,100 basis points reduction

  • Minimum CAR for Banks: 11-16% (risk-weighted)

  • Deposit Protection Limit: PKR 1,000,000 per depositor per bank

AML/CFT Compliance

  • Regulatory Framework Date: 30 September 2020

  • Biometric Verification: Mandatory for all banks, MFIs, EMIs (2024)

  • Cooling Period: 2-hour hold on electronic transfers (2025)

  • FATF Compliance Status: Ongoing alignment with international standards

16. Notable Regulatory Precedents & Actions

Recent Regulatory Developments (2024-2025)

  1. Cooling Time Rule (2025)

  • 2-hour hold period for fund transfers

  • Protection against fraud and accidental transfers

  • Applied to JazzCash, Easypaisa, mobile banking

  1. Biometric Verification Mandate (2024)

  • All financial institutions required to verify customers biometrically

  • Enhanced AML/CFT effectiveness

  • Aligned with international standards

  1. Digital Banking License Framework (2024-2025)

  • New regulatory category for digital-native banks

  • Existing branchless banking operators evaluating transition

  • Expected operational launches by 2025

  1. PRISM+ Upgrade Launch (August 2025)

  • ISO 20022 standard implementation

  • Advanced liquidity management

  • Enhanced interoperability and automation

  1. Policy Rate Reduction Cycle (2024-2025)

  • Cumulative 1,100 basis point reduction

  • Multiple tranches from June 2024 through May 2025

  • Supporting economic growth post-IMF program

17. Regulatory Approach & Philosophy

Risk-Based Regulation

The SBP employs a proportionate, risk-based approach:

  • Regulatory intensity matched to entity size and risk profile

  • Microfinance banks subject to lighter prudential requirements than commercial banks

  • EMI regulation tailored to digital finance characteristics

  • Branchless banking oversight balanced with consumer protection

Transparency & Independence

Governance Principles:

  • Independent Monetary Policy Committee (established 2015)

  • Published monetary policy decisions and rationale

  • Regular financial reporting to stakeholders

  • Transparency in regulatory rule-making

Monetary Policy Focus

Price Stability Priority:

  • 2022 amendments elevated inflation targeting as primary objective

  • Reduced government borrowing from SBP balance sheet

  • Enhanced central bank independence

  • Inflation target range: 5-7%

Systemic Stability & Financial Inclusion

Dual Mandate:

  • Systemic financial stability (prudential regulation)

  • Financial inclusion (microfinance bank regulation, branchless banking oversight, digital finance)

  • Payment system accessibility (24/7 RAAST, extensive ATM network)

  • Consumer protection (deposit insurance, complaint mechanism)

Regulatory Powers

Legal Enforcement Authority

The SBP possesses binding regulatory authority with enforcement mechanisms:

  1. Licensing Authority

  • Power to grant, renew, suspend, or revoke licenses

  • License conditions and regulatory requirements

  • Remedial actions short of revocation

  1. Supervisory Authority

  • Mandatory examination authority

  • Order issuance power

  • Direction authority on operational matters

  1. Penalty Authority

  • Monetary penalties for non-compliance

  • Gradation based on violation severity

  • Public disclosure requirements for serious violations

  1. Resolution Authority

  • Power to declare failed banks

  • Merger and acquisition authority

  • Orderly resolution procedures

Regulatory Compliance Mechanisms

Reporting Requirements:

  • Quarterly financial statements

  • Monthly supervisory returns

  • Real-time transaction reporting (PRISM, RAAST)

  • Daily foreign exchange position reports

  • Suspicious activity reporting (AML/CFT)

  • Consumer complaint statistics

Examination & Inspection:

  • On-site bank examinations (at least annually)

  • Off-site monitoring and analysis

  • Risk assessment visits

  • Compliance audits

  • Specialized inspections (AML/CFT, operational risk, etc.)

Regulatory Coordination:

  • Ministry of Finance (fiscal policy liaison)

  • Federal Board of Revenue (tax compliance)

  • SECP (securities market coordination)

  • Financial Monitoring Unit (AML/CFT)

  • NPS (National Payment System Council)

Binding Regulatory Powers

The SBP Act 1956 and amendments vest the following powers:

  1. Monetary Policy Authority

  • Unilateral power to set policy rate

  • OMO and reserve requirement tools

  • Refinance facility determinations

  1. Licensing Authority

  • Sole authority to license banks, MFBs, DFIs, EMIs, PSOs

  • Charter amendment authority

  • Closure and merger authority

  1. Examination & Inspection Authority

  • Unrestricted access to institutions and records

  • Power to demand information

  • Corrective action authority

  1. Prudential Regulation Authority

  • Authority to prescribe capital adequacy standards

  • Liquidity requirement setting

  • Exposure limit determinations

  • Risk management standards

  1. Foreign Exchange Control Authority

  • Authorized dealer licensing

  • Foreign exchange transaction regulation

  • Exposure limit controls

  • Cross-border payment oversight

  1. Consumer Protection Authority

  • Deposit protection scheme oversight

  • Consumer complaint resolution

  • Disclosure standards setting

Specific Regulatory Powers (Notable Instances)

Electronic Money Institution Regulation:

  • Power to license EMIs (JazzCash, Easypaisa)

  • Imposition of biometric verification mandates (2024)

  • Cooling period requirements for mobile wallets

  • Digital banking license framework authority

Branchless Banking Regulation:

  • Regulatory oversight of mobile money providers

  • Consumer protection standards

  • AML/CFT compliance enforcement

  • Operating restriction authority

Payment System Oversight:

  • PRISM+ system standards setting

  • RAAST operational governance

  • 1LINK network regulation

  • ISO 20022 standard adoption authority

Regulatory Role and Function

Board of Directors

The SBP's governance is administered by a Board of Directors with the following composition:

  • Governor SBP — Chair of the Board and Chief Executive Officer

  • Secretary of Finance — Government representative

  • Eight Non-Executive Directors — Nominated by the Federal Government

Director Requirements (SBP Act 1956, as amended):

  • Must be eminent professionals in economics, finance, banking, or accountancy

  • Must have no conflict of interest with the Bank's business

  • Appointed for a period of 3 years

  • Compliance with regulatory and governance standards

Monetary Policy Committee (MPC)

Established under the SBP Amendment Act 2015, the MPC ensures transparency and independence in monetary policy decision-making:

  • Chair: Governor, State Bank of Pakistan

  • Membership: 10 members total

  • Governor (Chair)

  • 3 SBP Board members nominated by the Board

  • 3 senior SBP executives nominated by the Governor

  • 3 external economists appointed by the Federal Government on recommendation of the SBP Board

Primary Responsibility: Setting the policy rate to achieve price stability (5-7% inflation target range)

Organizational Structure

The SBP operates through specialized departments including:

  • Banking Services Department (BSD) — Bank supervision and regulation

  • Monetary Policy Department — Policy formulation and implementation

  • Exchange Policy Department (EPD) — Foreign exchange regulation

  • Payment Systems Department — PRISM, RAAST, and payment infrastructure

  • Digital Financial Services (DFS) — EMI and branchless banking oversight

  • Consumer Protection Department (CPD) — Depositor protection and complaints

  • Compliance and Risk Management — AML/CFT and regulatory compliance

Headquarters: State Bank Building, I.I. Chundrigar Road, Karachi, Pakistan

Constitutional Basis

The SBP derives regulatory authority from:

  1. State Bank of Pakistan Act 1956 (primary statute)

  • As amended by Act No. VI of 2022

  • Defines core functions: monetary policy, banking supervision, payment systems

  • Establishes the Board of Directors and governance structure

  1. State Bank of Pakistan Order 1948

  • Original constitutional instrument

  • Established the Bank immediately after independence

  • Charged with regulating currency, reserves, and credit system

  1. Foreign Exchange Regulation Act 1947

  • Governs foreign exchange management

  • Authorizes SBP to regulate authorized dealers

  • Sets exposure limits and transaction reporting requirements

Binding Authority

  • Authority Status: Binding on all regulated entities

  • Enforcement Mechanism: Regulatory enforcement actions, penalties, license revocation

  • On-Site Supervision: Regular inspections of banks and financial institutions

  • Off-Site Monitoring: Regular financial reporting and compliance monitoring

  • Overseas Operations: SBP monitors Pakistani banks' international operations

2022 Amendment Highlights

The SBP (Amendment) Bill 2022 introduced critical changes:

  1. Inflation Targeting Enhancement

  • Primary objective: maintain price stability (5-7% inflation target)

  • Reduced government borrowing from SBP balance sheet

  • Enhanced SBP independence in monetary policy

  1. Quasi-Fiscal Operations

  • Removed provisions requiring SBP to conduct quasi-fiscal activities

  • Maintains continued refinance facilities to financial institutions with checks and balances

  1. Capitalization Framework

  • SBP must maintain sufficient capital

  • Statutory reserves and retained earnings mechanism

  • Prescribed procedures for achieving desired capital levels

  1. Fund Provisions Removed

  • Sections 17A-17E removed (obsolete credit funds)

  • Includes Rural Credit Fund, Industrial Credit Fund, Export Credit Fund, Loans Guarantee Fund, Housing Credit Fund

  • Streamlined organizational focus

Licensing and Authorization Relevance

The YAML Front Matter - State Bank of Pakistan (SBP) issues authorizations within its regulatory mandate in Pakistan:

License TypeDescriptionPrimary AuthorizationCore license type within the entity's regulatory scopeSupplementary AuthorizationsAdditional permissions for specific activities

[Specific license types and requirements require verification from official sources]

Payments and Money Movement Relevance

The YAML Front Matter - State Bank of Pakistan (SBP) has the following relevance to payments and money movement in Pakistan:

FunctionRelevancePayment System OversightOversees payment systems and payment service providers within mandateLicensingLicenses entities involved in payment services where applicableConsumer ProtectionEnforces consumer protection rules for payment servicesAML/CFTEnsures payment service providers comply with AML/CFT requirements

Payment Systems Governed or Overseen

Large-Value Payment Systems (LVPS)

System NameRelationshipStatusNotesPRISM (Pakistan Real-time Interbank Settlement Mechanism)Direct OperatorActiveRTGS for high-value interbank settlements; Rs 1,043 trillion processed annually (2024)PRISM+ (Upgraded RTGS)Direct OperatorLaunched Aug 19, 2025ISO 20022 compliant; enhanced liquidity management; includes SBP's first Central Securities Depository (CSD)

Retail & Instant Payment Systems

System NameRelationshipStatusNotesRAAST (Instant Payment System)Direct OperatorActive (launched Jan 11, 2021)24/7/365 real-time payments; 1.9 billion transactions / PKR 44.3 trillion cumulative to Jun 2025; P2P, P2M, BulkRAAST P2PDirect OperatorActive603 million transactions / PKR 15.7 trillion (Q2 FY26)RAAST P2M (Person-to-Merchant)Direct OperatorActive33.6 million transactions / PKR 167.6 billion (Q2 FY26); 838,856 merchants on RAAST QRRAAST Bulk ServiceDirect OperatorActiveGovernment & corporate disbursements; 9 million transactions / PKR 2.6 trillion (Q2 FY26)

Interbank Switching & Card Networks

System NameRelationshipStatusNotes1LINK (National ATM/Payment Switch)Oversight (licensed PSO)ActiveInterbank ATM switching, EFT, bill payments; operates 1GO RAAST P2M serviceVisa PakistanOversightActiveInternational card scheme; debit/credit card processingMastercard PakistanOversightActiveInternational card scheme; debit/credit card processingUnionPay International PakistanOversightActiveCard scheme with growing domestic acceptancePOS NetworkOversightActive195,849 terminals at 159,284 merchant locations; ~1 million daily card payments (FY25)

Licensed Electronic Money Institutions (EMIs)

As per SBP List of Authorized EMIs (updated Jan 9, 2026):

Commercial Operations (6 active):

EMI NameBrand/ProductLicense DateKey ServicesNayaPay (Pvt.) LtdNayaPaySept 2021 (first EMI license)Consumer wallets, merchant payments, Mastercard debit cards, P2P transfersSadaPay (Pvt.) LtdSadaPay2022Consumer wallets, Mastercard debit cards, freelancer payments (acquired by Papara for $50M in 2024)Finja (Pvt.) LtdSimSim / Finja2022Digital credit, merchant payments, SME lending, collections (acquired by OPay Pakistan)Akhtar Fuiou Technologies (Pvt.) LtdDigitt+2023Consumer wallets, digital paymentsE-Processing Systems (Pvt.) Ltd (EPSPL)OneZappNov 2024Digital wallets, payment processingWemsol (Pvt.) LtdWemsolFeb 2025Digital payments, e-wallets

Pilot Operations (1):

EMI NameStatusHubPay (Pvt.) LtdPilot operations

In-Principle Approval (3+):

EMI NameStatusYAP Pakistan (Pvt.) LtdIn-principle approvalCerisma (Pvt.) LtdIn-principle approvalToko Lab (Pvt.) LtdIn-principle approvalBarq PakistanIn-principle approval (Oct 2025; Saudi-backed)

Licensed Payment System Operators (PSOs) & Payment Service Providers (PSPs)

As per SBP List of Authorized PSOs/PSPs (updated Nov 5, 2025):

Entity NameLicense TypeKey Services1LINK (Pvt.) LtdPSOATM switching, interbank EFT, 1GO RAAST P2M, bill paymentsKeenu (Pvt.) LtdPSPPayment gateway, digital wallet, QR payments, merchant acquiringPayFast (Pvt.) LtdPSPOnline payment gateway, bank transfers, wallet paymentsSafepay (Pvt.) LtdPSPOnline payment gateway (full commercial license Apr 2025)Accept Technologies (Pvt.) Ltd (Paymob)PSPPayment gateway, merchant acquiringInfotech (Pvt.) LtdPSPPayment processing services

Licensed Digital Banks

Under SBP Licensing and Regulatory Framework for Digital Banks (2022):

Digital BankTypeStatusBackingHugoBank PakistanDigital Retail Bank (DRB)In-Principle ApprovalLocal consortiumKT Bank Pakistan LtdDigital Retail Bank (DRB)In-Principle ApprovalKuveyt Turk Participation BankMashreq Bank PakistanDigital Retail Bank (DRB)In-Principle ApprovalMashreq Bank UAERaqami Islamic Digital BankDigital Retail Bank (DRB)In-Principle ApprovalIslamic banking consortiumEasypaisa (Telenor Microfinance Bank)Digital Retail Bank (DRB)First DRB License (Jan 2025)Telenor / Ant Group

Branchless Banking / Mobile Wallets

PlatformOperatorStatusScaleJazzCashJazz (Mobilink Microfinance Bank)Active — market leader21M monthly active users; 238,000 agents; dominant in rural areasEasypaisaTelenor Microfinance BankActive18M monthly active users; 213,000 agents; strong urban presence; transitioning to DRBUPaisaU Microfinance BankActiveSmaller market shareHBL KonnectHabib Bank LimitedActiveBank-led mobile wallet

Internet Payment Gateways (Bank-Operated)

Bank / ProviderProductNotesHBLHBLPay Checkout / HBL IPGVisa, Mastercard, UnionPay acceptance; 2% MDRBank AlfalahAlfalah MPGS GatewayMarket leader in bank-operated payment gatewayMCB BankMCB PayOneOnline payment acceptanceUBLUBL Digital Payment GatewayDigital commerce payments

Payment System Statistics (FY 2024-25)

MetricValueTotal retail payment transactions9.1 billion (38% YoY increase)Total retail payment valuePKR 612 trillion (12% YoY increase)Digital share of retail payments88% (up from 78% in FY23, 85% in FY24)Mobile-originated transactions81% of all digital transactionsBranchless banking app users72 million (up from 8M in FY2019)Digital wallet penetration50.2% (up from 10.5% in FY2019)POS terminals195,849 across 159,284 merchant locationsDaily card payments~1 millionRAAST cumulative (to Jun 2025)1.9 billion transactions / PKR 44.3 trillionPRISM annual volume (2024)Rs 1,043 trillion

Relationship to Other Regulators

Domestic Coordination Bodies

  1. Federal Government (Ministry of Finance)

  • Secretary of Finance serves on SBP Board

  • Fiscal policy coordination

  • Government borrowing oversight

  1. Financial Monitoring Unit (FMU)

  • AML/CFT intelligence coordination

  • Suspicious activity reporting recipient

  • FATF compliance oversight

  1. Securities and Exchange Commission of Pakistan (SECP)

  • Capital markets oversight (complementary)

  • Insurance and corporate governance regulation

  • Data sharing on financial institutions

  1. Federal Board of Revenue (FBR)

  • Tax compliance coordination

  • Financial data sharing

  • Anti-money laundering alignment

  1. Deposit Protection Corporation (DPC)

  • Subsidiary of SBP

  • Deposit insurance administration

  • Depositor protection scheme

International Relationships

  1. International Monetary Fund (IMF)

  • Regulatory alignment with international standards

  • Technical assistance programs

  • Surveillance and Article IV consultations

  1. World Bank

  • Payment systems development cooperation

  • Financial sector assessments

  • Development finance coordination

  1. Financial Action Task Force (FATF)

  • AML/CFT standard compliance

  • Mutual evaluation reports

  • Technical assistance participation

  1. Bank for International Settlements (BIS)

  • Central bank cooperation

  • Basel standards adoption

  • Payment systems information exchange

  1. Asian Development Bank (ADB)

  • Regional financial cooperation

  • Technical programs

  • Development finance coordination

Geography and Jurisdiction Notes

FieldValueApplies NationwideYesApplies at State or Sub-National Level OnlyNoCross-Border or Regional ReachNoSpecial Territorial NotesNational jurisdiction within Pakistan

Important Departments and Divisions

Division / DepartmentPrimary FunctionSupervision DivisionOversight of regulated entitiesLicensing DivisionProcessing of applications and authorizationsEnforcement DivisionInvestigation and prosecution of violationsPolicy and Research DivisionRegulatory policy developmentCompliance DivisionAML/CFT and regulatory compliance monitoring

Key Public Resources

Official Contact Details

State Bank of Pakistan

  • Headquarters Address: I.I. Chundrigar Road, Karachi, Pakistan

  • City: Karachi (Financial Capital)

  • Country: Pakistan

  • Official Website: https://www.sbp.org.pk

Website Sections & Resources

Regulatory Licensing & Application Portal

  • Online Portal: SBP extends online portal for financial institutions to obtain regulatory approval

  • Application Process: Standardized procedures for bank licensing, EMI licensing, PSO/PSP licensing

  • Documentation: Publicly available licensing criteria and application requirements

Notes on Naming and Language

FieldValuePreferred English RenderingYAML Front Matter - State Bank of Pakistan (SBP)Official Local-Language RenderingYAML Front Matter - State Bank of Pakistan (SBP)Official Website Language(s)English

Related Pages

Mobile Money in this country3

Last updated: 29/Apr/2026