Published on June 21st, 2011 | by Arsalan Mir1
Branchless Banking Regulations Revised
We have earlier talked about the regulatory framework on branchless banking here and here. The State Bank of Pakistan have revised the branchless banking regulations for financial institutions including commercial, Islamic and microfinance banks for expanding the outreach of banking operations in the country. Details are highlighted in the report from Express Tribune below:
“Financial institutions, which have already been allowed to offer branchless banking services, are advised to streamline their operations as per amended regulations within six months and report compliance to SBP,” said the central bank in a circular issued on Monday.
According to the amendments, the central bank has introduced Level ‘0’ branchless banking accounts to bring the low income-earning segment into financial services loop. Now, instead of sending a physical account opening form and copy of customer’s CNIC to the financial institution for processing, the branchless banking agents could send the digital account opening form, customer’s digital photo and an image of customer’s CNIC to the financial institution electronically.
The following transaction and maximum balance limits on Level ‘0’ accounts will be applicable: Daily limit Rs15,000, monthly limit Rs25,000, annual limit Rs120,000 and maximum balance limit Rs100,000.
Similarly, the transaction limits for Level 1 branchless banking accounts have been increased to cater to the needs of customers by rationalising the Know Your Customer (KYC) requirements. The transaction and maximum balance limits will be: Daily limit Rs25,000 (previous limit was Rs10,000), monthly limit Rs60,000 (previous limit was Rs20,000) and annual limit Rs500,000 (previous limit was Rs120,000). There will be no maximum balance limit, according to the amendments.
According to other salient features, all branchless banking account holders will be allowed to transfer up to Rs25,000 per month to non-account holders.
Financial institutions can provide person-to-person funds transfer service to customers (senders and receivers) up to the limit of Rs15,000 for one customer in a month.
However, the institutions will register the persons availing this service after due verification for subsequent transactions. During the verification of customer data from NADRA, if it is found that the agent has opened any customer account or has processed a fund transfer on the basis of fake or incorrect information or document, the institutions will take penal action including blacklisting of agent or termination of agency agreement.
The institutions will formulate standardised guidelines for capturing customer photograph and image of CNIC at agent locations to prevent impersonation of identity.
The account holders will be able to pay their utility bills without exhausting their account limits.
The phrase “Transaction Processing System (TPS)” has been replaced with “Third Party Service Provider (TPSP)”. The institutions will enter into arrangements with TPSP after obtaining regulatory approvals.
The institutions can open multiple Level 2 and Level 3 accounts of branchless banking customers after due KYC procedure defined for the regular bank account.
The institutions will be required to submit quarterly reports on financial data of branchless banking initiatives to SBP and will also provide on monthly basis customer complaints of fraud and forgery and the action taken.