The State Bank of Pakistan (SBP) has released a framework for branchless banking agent acquisition as well as management of the country’s banks and microfinance banks.
The new framework makes banks’ board of directors the responsible entity for offering strategic direction and oversight of branchless banking agent acquisition and management. Senior management will be responsible for internal controls and to ensure compliance with regulations.
Under the new framework, lenders can implement agent-based banking by using non-banking channels for distribution of basic banking services.
In addition, neighbourhood agents such as owners of small businesses, retail stores, franchises can conduct basic banking operations for customers on banks’ behalf.
The framework also mandates banks to evaluate and make necessary measures to eliminate operational, liquidity, reputational, legal, money laundering/terrorist financing risks; as well as offer consumer awareness and protection.
Moreover, the central bank has advised banks to develop overall central agent management policy. The policy would include various areas such as minimum agent selection criteria, agent due diligence, business experience, financial position, integrity, personal qualities, reputation, and credit profile.