KARACHI: The State Bank of Pakistan (SBP) on Monday introduced “Regulations for Mobile Banking Inter­opera­bility” to facilitate the branchless banking service providers.

“The SBP and Pakistan Tele­communication Authority (PTA) have developed the regulations for market participants, including banks, mobile network operators and technology service providers,” said a circular issued by the SBP.

Since the issuance of regulatory framework for Branchless Bank­ing (BB), the market has shown appreciable growth in terms of business volumes, branchless banking accounts and agent network. The branchless banking regulations permit authorised financial institutions to operate many-to-many models where a large number of banks and mobile network operators, by joining hands, can offer interoperable financial services to all bankable customers.

According to another report of the State Bank, the annual growth of the mobile banking was 4.8 per cent while the volume of transactions in the 2nd quarter of this fiscal year was Rs25.8 billion.

These regulations aim to create an enabling regulatory environment, bring systemic harmony and introduce standardisation and set benchmarks for mobile and branchless banking interoperability, said the SBP.

The third party service provider (TPSP) model, as stipulated in the regulations, will offer maximum outreach and connectivity, whereby all banks and all mobile network operators will be able to entertain each other‘s customers.

“The authorised financial institutions should accordingly upgrade their systems, controls and procedures,” the SBP directed all banks and financial institutions. These institutions have been advised to ensure compliance as non-compliance will be dealt with in accordance with the relevant provisions of law.

SAARc: The central banks of Saarc region need to interact, coordinate and discuss Payment Systems issues to find common solutions to address the challenges that are being faced in this domain with the objective of facilitating trade, commerce and remittance flows.

This was stated by Governor, State Bank of Pakistan (SBP), Ashraf Mahmood Wathra, while speaking at the inaugural session of a seminar on “Payment Systems and Correspondent Banking in the Saarc Region,” organised by SBP under the auspices of Saarcfinance at National Institute of Banking and Finance (NIBAF), in Islamabad.

The SBP governor sought enhanced cooperation among Saarc countries for developing correspondent banking framework in the region.

The seminar was attended by participants from central banks of Saarc countries. Local and foreign experts on the subject shared their views on different dimensions of correspondent banking.

He was of the view that the cost and time of monetary transactions can be reduced significantly if Saarc countries are able to develop their own corresponding banking system.

He also made it clear that the regional countries cannot afford to ignore the risks and responsibilities relating to money laundering that are increasingly being faced by financial institutions in today’s world.

It was the first-ever seminar on Correspondent Banking and Payment Systems at the Saarc level aimed at providing the regional central banks an opportunity to share policies and practices prevalent in their respective jurisdictions, and explore new areas of cooperation.

Published in Dawn, May 17th, 2016