SBP extends Covid-19 relaxations till June 30th

RIZWAN BHATTI

KARACHI: Considering the ongoing impact of Covid-19 pandemic, the State Bank of Pakistan (SBP) has decided to further extend the validity of some regulatory relaxations provided to banks and accountholders till June 30, 2022.

The SBP, considering the intensity and impact of Covid-19 pandemic in the country, provided a number of relaxations to ease the challenges faced by banks/DFIs/MFBs and their accountholders due to the Covid-19 pandemic.

However, the SBP has allowed blocking of accounts without valid Identity Documents after serving one-month prior notice.

As the impact of Covid-19 is persisting, the SBP has decided to further extend the validity of regulatory relaxations by six months. These relaxations were expired on 31st December 2021. However, now the financial institutions can avail these relaxations up to June 30, 2022.

According to the SBP directives, under these relaxations, Banks/MFBs may utilize Nadra Verisys in place of biometric verification, where the same is not possible or appropriate due to risk of Covid-19 spread, while complying with controls and measures. Banks/MFBs will continue with enhanced transaction limit of Rs500,000 per month and maximum account balance of Rs500,000 for non-biometrically verified merchant accounts. Authorized Financial Institutions (AFIs) will not downgrade non-biometrically verified Branchless Banking (BB) legacy Level-1 accounts to Level-0.

However, unless instructed otherwise, these relaxations will automatically stand withdrawn upon expiry of the extended timeline of June 30, 2022. Thereafter, banks/MFBs will be required to follow the applicable regulatory instructions in the related areas.

The SBP has also advised the banks/MFBs to take appropriate measures and steps to ensure smooth transition to normal operations without Covid-19 related regulatory forbearance.

Moreover, AFIs may continue to provide Person-to-Person (P2P) transfers through branchless banking channel as stipulated under Branchless Banking Regulations for Financial Institutions till June 30, 2022. However, the same will be ceased immediately upon expiry of the extended timeline. The SBP has also advised AFIs to take necessary measures, such as creating customer awareness, making adjustments in their business model and infrastructure accordingly.

Banks/DFIs/MFBs will immediately revert back to the applicable some instructions particularly related to blocking of accounts.

With effect from January 01, 2022, the SBP has allowed blocking of accounts without valid identity documents after serving one-month prior notice and marking accounts as dormant/inoperative as stipulated in the AML/CFT/CPF Regulations

Conducting biometric verification also allowed for all cash in or cash out transactions in BB Level-0 accounts as stipulated in Branchless Banking Regulations for Financial Institutions.

In addition, staff visits will be conducted to newly acquired agents as stipulated in the Framework for Branchless Banking Agent Acquisition and Management. For the agents acquired during the Covid-19 period, for whom visits have not yet been conducted, AFIs will perform the same by March 31, 2022, positively.