SBP steps up to promote digitisation in banking sector

In order to promote digitisation in the banking sector and encourage use of digital channels, the State Bank of Pakistan (SBP) has instructed all banks to provide a minimum set of services on their internet banking (IB) and mobile banking (MB) channels.

According to a statement issued on Wednesday, these services will include bill payments, funds transfer/IBFT, beneficiary management, limit management, credit and debit card management, stop cheque payment etc. To encourage the use of internet and mobile banking services by their customers, banks will not levy any activation, subscription or annual charges on their customers for using such services.

“Digitisation of the entire payment process is hindered if the customers can make payments to only those billers that are registered with their own bank. Hence, in order to facilitate the customers, the banks have been advised to make necessary arrangements to ensure that their customers can make online payments to the maximum number of billers,” the statement read.

The SBP barred financial institutions from issuing cheque books by default. The decision has been taken to promote digitalization in the banking sector.

“Cheque-books that are currently being issued by default shall only be issued upon customer’s request,” the SBP said.

To promote the use of payment cards, the banks will issue debit cards to all new bank account holders and customers who have not previously opted for a debit card, unless the customer opts not to receive any payment card. However, this requirement will not be applicable on customers that are not literate, photo account holders and visually impaired persons.

The banks have been authenticating their customers at the bank counters using signatures and paper based instruments. The existing EMV card infrastructure provides secure authentication; hence, there is potential to facilitate customers by using this infrastructure to replace the manual authentication process. In this regard, the banks/MFBs are now permitted to authenticate their customers at branch counters using chip-and-pin cards and 2 Factor Authentication (2FA) and provide them banking services.

Considering the significance of digitization, the banks have also been advised to create a role of Chief Digital Officer (CDO) who would be responsible for steering the digitization efforts. Further, accelerated digitization will also be part of KPIs of every CEO, which will be monitored by their board for its achievement on at least a half-yearly basis.

The SBP said that it will continue to promote digitisation in the country and expects the industry to support these efforts, resulting in increased convenience for the customers to fulfil their financial needs through safe, rapid and secure digital infrastructure in Pakistan.

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