Karachi, November 7, 2025 – The State Bank of Pakistan (SBP) has updated its Corporate Governance Regulatory Framework, allowing board members of banks to also serve as board members of exchange companies owned by the same bank.
This amendment, made under Regulation G-4 of the Corporate Governance Regulatory Framework, aims to strengthen coordination and improve institutional governance between banks and their wholly-owned subsidiaries.
According to the SBP’s latest notification, a President, CEO, or Director of a bank can now also hold a director’s position in an exchange company fully owned by that bank. However, they must submit an additional affidavit as outlined in Appendix V of the framework.
Previously, individuals holding key roles in banks or Development Finance Institutions (DFIs) were not allowed to serve in related financial entities, including exchange companies, stock exchanges, brokerage firms, credit bureaus, or any company owned or controlled by these entities.
The SBP clarified that this amendment applies only to wholly-owned exchange companies and does not change the restrictions for other financial institutions.
Additionally, an independent director of the Pakistan Stock Exchange (PSX) may also be appointed as a board member of any bank or DFI, provided they maintain independence and have no links with restricted financial entities.
This policy update reflects SBP’s efforts to enhance corporate governance, streamline financial oversight, and promote better coordination across Pakistan’s financial institutions.