State Bank of Pakistan Instructs Financial Institutions to Create Chief Digital Officer Role, Offer Better Support for Internet Banking

The State Bank of Pakistan (SBP), the nation’s central bank, stated on Wednesday (March 11, 2021) that all local banking institutions should offer a set of minimum services for Internet banking and mobile banking. The SBP says it wants to encourage or promote the use of digital platforms for settling transactions.

The SBP noted:

“All banks should provide minimum set of services on their Internet banking and mobile banking channels including bill payments, funds transfer, beneficiary management, limit management, credit and debit card management, stop cheque payment etc [meaning a customer can request their bank to stop payment on cheques which they consider not required for making payment].” 

The SBP added:

“For encouraging 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.”

The digitization of transactions may be hindered if customers can only make payments to those who’ve registered with their own bank. To better facilitate their clients, Pakistani banks have been asked to make the appropriate arrangements to ensure that their clients are able to perform online payments to as many billers as possible, the circular from the SBP confirmed.

As first reported by Dawn News, Pakistani banks will support the use of payment cards by providing debit cards to all account holders and clients (unless the customers don’t want them).

Banks in Pakistan have been performing ID checks at bank counters using signatures and paper-based instruments. The current EMV card infrastructure offers secure authentication methods, which means there’s a way to facilitate clients by using this infrastructure to replace manual authentication, the SBP noted.

The SBP also mentioned:

“In this regard, the banks and microfinance banks 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.”

Given the significance of digitization and ongoing digital transformation worldwide, the banks have also been instructed to create the role of chief digital officer (CDO). This position would be created to support the digital tech adoption strategy of financial service providers.

The existing initiatives for enabling digitization are just the beginning of many other planned projects that will support comprehensive digital financial services in Pakistan, the State Bank confirmed.

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