In a first, Pakistani central bank says will issue digital banking licenses this year

A brass plaque of the State Bank of Pakistan is seen outside of its wall in Karachi, Pakistan, on December 5, 2018. (REUTERS/File)
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Updated 04 January 2022
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In a first, Pakistani central bank says will issue digital banking licenses this year

  • Latest in series of initiatives by Pakistan to introduce new payment solutions to tap massive unbanked population
  • Digital bank give people access to banking wherever they are and wherever they have secure Wi-Fi and strong cell signal

KARACHI: The State Bank of Pakistan (SBP) has introduced a regulatory framework to issue licenses for digital banks in line with global practices, the central bank said this week, hoping the move will usher in a new era for the country's banking industry. 

A digital bank offers all kinds of financial products and services primarily through digital platforms or electronic channels, essentially giving people access to banking wherever they may be and wherever they have secure Wi-Fi and strong cell signal.

Introducing a regulatory framework for digital banks is the latest in a series of recent initiatives by the State Bank of Pakistan towards introducing new payment solutions in a country with a massive unbanked population.

"This is the first step towards introducing a completely digital bank that will provide all the banking services, from account opening to deposit and lending, through digital means and the customers will not need to visit any bank branch physically," the central bank said in a statement on Monday. "Digital banks are the culmination of the digital journey on which the banking industry embarked upon many years ago."

The newly issued licensing and regulatory framework provides details for setting up digital banks as a separate and distinct category in Pakistan.     

Under the framework, the SBP will grant two types of digital bank licenses:  Digital Retail Bank (DRB) and Digital Full Bank (DFB). DRBs will primarily focus on retail customers, while DFBs will deal with retail customers as well as businesses and corporate entities. 

"The framework mainly aims to enhance financial inclusion through affordable/cost effective digital financial services," the SBP said. "The framework includes guidance regarding licensing requirements, potential sponsors and permissible use-cases during different phases." 

The framework also sets an expectation for applicants to have sound digital governance, robust, secure and resilient technology infrastructure as well as effective data management strategy and practices.  

As per the framework, digital banks are required to maintain a principal place of business in Pakistan to house offices of its management, staff and support operations, which will serve as the main hub of contact for various stakeholders, including the SBP and other regulators. 

The state bank said licenses for DRBs and DFBs may be obtained for both conventional and Islamic variants, while conventional variants of DRBs and DFBs could also offer Islamic banking services through Islamic windows.

The central bank said setting up digital banks would also require less capital, compared to the brick-and-mortar banks currently in existence, and encourage new technology-oriented entrepreneurs to enter this new realm of business.  

The minimum capital requirement for DRBs during the pilot phase is Rs1.5 billion, which will gradually increase to Rs4 billion over a transition period of three years, according to the SBP.

Subsequent to the completion of the transition phase, DRBs may graduate to receive a DFB license, subject to the fulfillment of the minimum capital requirement and the completion of a two-year progression phase.  

Earlier, the SBP released an exposure draft of the regulatory framework and a targeted survey was launched to invite feedback from a wide range of local as well as international stakeholders. The framework covers all the essential guidance and supplementary regulations for a diverse range of possible applicants interested in setting up digital banks in Pakistan.    

"In line with international best practices and assessment of the overall banking situation in Pakistan, SBP has decided to initially issue up to five digital banks’ licenses, which essentially means that SBP is looking to attract players with strong value proposition, a robust technological infrastructure, sufficient financial strength, technical expertise and effective risk management culture," the central bank said.  

SBP will be accepting applications in for digital banking licenses till March 31, 2022.  Applicants may submit their requests along with all requisite documents at [email protected], according to the SBP statement. They may also approach the central bank for any clarification at [email protected]

Other recent SBP digitalization initiatives, which are gaining traction in Pakistan, include customer digital on-boarding, Roshan Digital Accounts, the Raast instant payment system, Electronic Money Institutions licenses and Asaan Mobile Accounts. 


PM Sharif’s administration prioritizes security for local and foreign nationals, announces special security unit

Updated 23 June 2024
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PM Sharif’s administration prioritizes security for local and foreign nationals, announces special security unit

  • The prime minister asks the relevant authorities to ‘consult Chinese experts’ for the unit’s formation in Islamabad
  • Shehbaz Sharif orders the construction of a forensic lab in the capital that is in keeping with modern requirements

ISLAMABAD: Prime Minister Shehbaz Sharif said on Sunday protecting Pakistani citizens and foreign nationals residing in the country was a major priority for his administration, as he announced the formation of a special unit for the purpose in the federal capital, to be developed in consultation with Chinese experts.
Top Pakistani officials have held high-profile meetings in recent weeks to underscore their intent to address the challenge of militant violence, which has jeopardized the government’s plan to invite foreign companies and put the national economy back on track.
A day earlier, the prime minister announced plans to prepare a comprehensive response to the issue, warning that a “soft state” could not strengthen its economy as it struggles to gain investor confidence.
He revisited the issue while chairing a meeting in Islamabad to review the progress of ongoing security and public order projects.
“The protection of Pakistani citizens and foreigners residing in Pakistan is among the top priorities of the state,” he was quoted as saying by a statement issued by his office. “Any negligence in maintaining public order and protecting citizens will not be tolerated.”
The prime minister was briefed about the current law and order situation in the federal capital along with the Islamabad Model Jail, Safe City Project, Federal Anti-Terrorism Department, and Special Protection Unit.
The statement informed that Sharif asked the authorities to “consult with Chinese experts” for the formation of the unit.
The meeting also briefed about the National Facilitation Centers in Islamabad and the K-9 units established for the detection and tracing of drugs and explosives.
The prime minister directed the construction of a forensic lab in keeping with the modern requirements and asked the authorities to recruit the personnel on merit for all security projects in Islamabad.
The meeting was also attended by Federal Minister for Interior Mohsin Naqvi, Deputy Chairman Planning Jahangir Khan, Federal Secretaries, and senior officials from the relevant departments.


National Assembly passes resolution against mob lynchings in Pakistan, demands citizen safety

Updated 24 June 2024
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National Assembly passes resolution against mob lynchings in Pakistan, demands citizen safety

  • The development follows the killing of a local tourist in Swat on the accusation of desecrating the Holy Qur’an
  • Pakistani lawmakers say violent acts committed in the name of religion have become a norm in the country

ISLAMABAD: The National Assembly of Pakistan passed a resolution on Sunday condemning recent mob lynching incidents in Punjab and Khyber Pakhtunkhwa (KP) provinces, while urging relevant authorities to ensure the safety of all citizens, including religious minorities, and bring perpetrators of such violence to justice.
The development follows the recent torture and killing of a local tourist in the picturesque Swat valley of KP, accused of desecrating the Holy Qur’an, whose body was then set alight by a furious mob.
During Saturday’s parliamentary debate, Federal Minister for Planning and Development Ahsan Iqbal emphasized this was not an isolated incident, but part of a troubling series of violent acts committed in the name of religion.
Earlier today, Pakistan’s Defense Minister Khawaja Muhammad Asif echoed the concern, urging the National Assembly to adopt a clear stance on the issue.
“The House believes that right to life is the most cherished right as enshrined in the Constitution of Pakistan,” the resolution presented by Law Minister Azam Nazeer Tarar said. “Every person is to be dealt with in accordance with the law and not otherwise.”
“This House takes serious notice of the recent mob lynchings of our citizens accused of offenses in Swat and Sargodha,” it continued. “It is noted with grave concern that such incidents have recently increased in different parts of the country. The House strongly condemns these horrific and tragic incidents which cannot be tolerated in any civilized society.”
The resolution urged the federal and provincial governments to ensure “the safety and security of all our citizens, including religious minorities and other vulnerable segments of society.”
Referring to another incident where a Christian man was targeted by his enraged neighbors in Punjab’s Sargodha district over blasphemy allegation, the resolution asked Punjab and KP administrations to “take all necessary measures to ensure that persons involved in these incidents are identified, investigated and prosecuted under the relevant laws.”
“The House also expects that the courts shall ensure immediate and speedy justice in these cases,” it added.
The KP police have formed a joint investigation team to investigate the Swat incident and arrest all involved individuals using CCTV footage.
Mob lynchings are not uncommon in Pakistan where even a mere accusation of blasphemy can lead to violence.
In case of Swat, mob members killed the tourist after storming the police station where he was detained, pulling him out and taking him away.


‘Positive’ progress in talks between Pakistani parties as government seeks budget’s parliamentary approval

Updated 23 June 2024
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‘Positive’ progress in talks between Pakistani parties as government seeks budget’s parliamentary approval

  • PPP says its recommendations relating to the budget are based on its manifesto that centers on public welfare
  • The party has taken up issues related to development funds and administrative positions with the ruling PML-N

ISLAMABAD: The Pakistan Peoples Party (PPP) said on Sunday the latest round of negotiations with the ruling Pakistan Muslim League-Nawaz (PML-N) party continued in a “positive way” after the PPP expressed reservations about a range of issues following the presentation of the federal budget earlier this month.
The PPP decided to support the PML-N’s efforts to form a coalition government soon after the last general elections in February, though its top leadership announced it was not interested in becoming part of the federal cabinet or getting ministerial posts.
Prime Minister Shehbaz Sharif invited PPP chairman Bilawal Bhutto-Zardari last week to discuss his reservations over the government’s economic and political policies amid efforts to secure a smooth passage for the budget from parliament.
The two leaders agreed to form negotiating teams to discuss all outstanding issues that mostly related to development funds and administrative positions in the country’s most populous Punjab province.
“Different matters were discussed between the two sides, and the talks continued to move forward in a very positive way,” PPP Secretary General in Central Punjab Syed Hassan Murtaza, who is part of his party’s negotiating team, told Arab News after the latest round of talks with the PML-N in Islamabad earlier today.
“We have given all our recommendations regarding the budget, good governance, appointments and transfers [of bureaucracy], funds for ongoing development schemes in Sindh and other areas,” he continued. “We have also urged to release funds for the schemes suggested by the PPP members.”
Murtaza maintained the PPP’s stance and recommendations relating to the federal budget were based on its manifesto that centered on public welfare.
He said the party had also informed the PML-N that PPP leaders must be consulted if the government wanted to make changes to the local government legislation in Punjab.
According to some reports, it was also discussed during the negotiations that an additional secretary be appointed at the chief minister’s secretariat in Punjab, with the sole responsibility of resolving the issues faced by the PPP.
The PPP also wanted a say in the Punjab administration’s decisions to appoint deputy commissioners, district police officers and revenue functionaries in districts where the party boasts active support.
“Now, we will inform our leadership, and the PML-N delegation will consult their leadership on [these issues] before another round of talks is held to move forward,” Murtaza said. “The final decisions will be taken as per the direction of the party leadership.”


New Pakistan political party to focus on economic reform, reduce government footprint, founder says

Updated 23 June 2024
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New Pakistan political party to focus on economic reform, reduce government footprint, founder says

  • Awam Pakistan Party led by former prime minister Shahid Khaqan Abbasi scheduled for launch on July 6 in Islamabad
  • Founder Miftah Ismail says party leaders will hold workers’ conventions, seminars across the country to mobilize the public

ISLAMABAD: The Awam Pakistan Party, scheduled for launch on July 6 in Islamabad, plans to focus on the economic prosperity of people by extending tax concessions to middle-income and salaried classes and bringing down annual government expenditure, a top party official announced Sunday.
Miftah Ismail, one of the founding members of the party who previously served as finance minister, said that people from all four provinces had already started joining the party.
More than 175 political factions have been registered with the Election Commission of Pakistan, though only 13 of them managed to get their members elected to the National Assembly in the wake of the last general elections held on February 8.
The leading political parties in the country pivot around a central leader who is viewed as charismatic by its followers and play a vital role in getting the popular vote.
Former Prime Minister Shahid Khaqan Abbasi and ex-finance minister Ismail, the driving forces behind the new party, aim to encourage public participation in governance and address the country’s fragile economy through reforms and the privatization of public entities.
“One of our major purposes behind forming the new political party is to struggle for the uplift of poor people through their active participation in politics, governance and economy,” Ismail told Arab News in a conversation over the phone.
“We have to extend tax concessions to middle-income and salaried classes, focus on privatization, limit the government’s footprint by encouraging the private sector and privatize the public organizations to reform the economy,” he added.
Ismail said Pakistan had been one of the leading economies in the region until the 1990s, but the poor governance model brought its development to the lowest level in the last two to three decades.
“A specific elite group is ruling the country without the active participation of the public, experts and professionals,” he maintained, pointing out that his party wanted to focus on improving the education and health sectors.
Criticizing the ruling coalition led by Prime Minister Shehbaz Sharif, the ex-finance minister said the current administration had lost the opportunity for economic reforms by bringing in the latest budget.
“This government has literally wasted opportunities for effective reforms in the governance and economic models,” he said.
Ismail acknowledged it was a long and assiduous journey to establish the new party, adding it would also be challenging to get its members elected to parliament.
“We know it is difficult,” he said, “but the journey of a thousand miles begins with the first step.”
“If elections are held in a year now, definitely we will not be in a position to fully participate in them through our platform,” he continued. “But if we get two to three years ahead of the national elections, we will be in a position to field our candidates across the country.”
Ismail said the Awam Pakistan Party leadership planned to hold workers’ conventions across the country and mobilize the public.
“We will be using social media effectively for our publicity, but along with that, we will be focusing on ground activities like conventions and seminars on issues of public importance,” he added.


How Pakistan’s new cricket coaches can approach tough tasks ahead

Updated 23 June 2024
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How Pakistan’s new cricket coaches can approach tough tasks ahead

  • The two coaches need to lead from the front and protect the players from attacks by ex-cricketers
  • The coaches should also set up clear expectations within the team to make player perform better

NEW YORK: How many times have we heard the words inconsistent, unpredictable and chaotic used to describe the Pakistan men’s cricket team’s performances over the years?

The answer is numerous, although usually the description is followed by the qualification that the team are at their most dangerous when in that state.

In the wake of the team’s failure to progress to the Super 8s stage of the 2024 T20 World Cup, the mood is different and much darker.

Inconsistency, unpredictability and chaos did not translate into becoming a dangerous opponent. Nor should it, because it is much more likely that a team characterized as consistent, hardworking and united will perform best.

In my view, it is time for those involved in Pakistan’s cricket world to step away from the myth surrounding what it takes to galvanize the team. In its place ought to be a realization that the raw talent that once helped them produce magical moments is not being harnessed properly and that teams in other countries have adopted a more adventurous style of playing cricket.

The big question is how can Pakistan achieve such a transformation? There is nothing new about the current environment. Issues with chairmen and selection have abounded over the years, leading to accusations of nepotism and favoritism. However, I believe that there is reason to be hopeful.

The two new coaches, Gary Kirsten for white ball cricket and Jason Gillespie for red ball, are in positions which allow them to make decisions which are likely to be backed unconditionally by the hierarchy, even if it is just to save face for themselves.

Hopefully, the coaches will take full advantage of this opportunity to set their paths immediately. It is not an understatement to suggest that they are set for the hardest task of their careers. I was coached by Gillespie at Yorkshire and know his style is to be calm, which will be of help in this task. He prefers to let players lead while occupying a supporting act. From a distance, Kirsten seems to have a similar style, evidenced by his time with India in winning the 2011 World Cup under MS Dhoni’s captaincy.

Anyone who has followed the men in green will be very aware of all the issues with the team environment, so those must be addressed first. It is a very insecure one with a lot of noise.

Personally, I would not have chosen the two-coach policy. These players need simple and consistent messaging to be able to go out and express themselves. However, given that two coaches are in place, it will be especially important for them to work together and build a trusted backroom staff body which is the same across the formats. Time is of the essence to put this in place as pressure to improve both team and individual performances will build quickly. In my view, the environment needs freshening and unnecessary baggage which has built up over the last couple of years needs removing.

One of the most difficult and contentious issues is that of the captaincy. In the current situation, I would play down the power and importance of the captain. This goes against my natural grain but, for the immediate future, the coach needs to be the figurehead and lead. Obviously, there still needs to be a captain, ideally across formats, so as to reduce noise and deliver one simple message. Pakistan’s next white ball match is not until early November in Australia, so there is no need for immediate action. However, there are two Tests with Bangladesh to be hosted in August. Shan Masood is the current captain.

Another contentious issue is the selection process and, within it, the role of Wahab Riaz. It was only on Mar. 24 that the current seven-member selection committee was established. This included Riaz, who had previously acted as chair, but that title was removed, Riaz remaining as a committee member. Somewhat impracticably, each member carried an equal vote from which a majority decision would be formed. How this works in practice is unclear.

In my view, the experiment should be ditched, with the coaches having the final say in a reduced committee. Riaz, who is believed to be close to the PCB (Pakistan Cricket Board) chair, was senior team manager during the World Cup, despite there being a team manager and a coach! There is a public perception that Riaz appears to wield too much influence. It remains to be seen if the review of Pakistan’s World Cup performance will recommend that it is reduced. The results are expected shortly.

The first requirement for team selection will come with the Bangladesh Tests. Gillespie will oversee a training camp ahead of these matches to prepare both the national and A teams. He has already said that “we can’t rely on the same 11 players to play day in and day out. We need to make sure that we’ve got a squad mentality.”

Surprisingly, the talent pool appears to be small with a lack of ready-made replacements in some positions, so there is a need to identify and back those with the necessary character and skill. One of the options is Mohammad Haris. He has the modern-day approach which surely needs to be injected into the team’s approach and pursued all the way to the next T20 World Cup. Irfan Khan Niazi is another young dynamo who could grow into a good finisher, whilst investment in batter Omair Yousuf could prove beneficial.

In the fast-bowling department, Shaheen Shah Afridi needs the necessary support to return to basics and improve his performance. In my view, he would be advised to forget about the captaincy to concentrate on taking wickets and being a match winner. Naseem Shah needs protection and support as he appears to be on the right path to being world class. I expect Gillespie to provide those levels of support for both players.

Leg-spinner Usama Mir would have been in my World Cup squad, whilst Mehran Mumtaz has the ability to be the all-format No. 1 spinner. Shadab Khan needs time to rediscover his bowling skills. He has been brilliant as a batter for Islamabad but that seems to have skewed his thought processes in international cricket. He has succeeded before and I have no doubt he will again, but he is another who needs to go back to basics.

My suggested change in approach for both coaches may not be very natural for either man. Both prefer to have a strong captain who takes the lead while they create an environment which encourages the players to make their own decisions.

In the short term, my view is that the coaches need to lead from the front, dealing with the noise and protecting their players from the inevitable attacks by ex-players, pundits and fans. Internally, they are advised to set out clear expectations. The team must become the priority in what is an insecure culture which makes the players think more about personal performances.

The two men need to settle the players in their minds through a combination of hand holding and tough love. Hopefully, a period of calm and support will create a better environment for success.