The State Bank of Pakistan has introduced a comprehensive licensing handbook covering banks, digital banks, microfinance institutions, exchange companies and payment service providers.
KARACHI, October 28, 2026: The State Bank of Pakistan (SBP) has consolidated and updated licensing and authorisation requirements for regulated financial institutions into a single comprehensive handbook, directing relevant entities to follow the revised framework.
In a circular issued on October 28, the central bank said the Handbook for Licensing/Authorisation of Regulated Entities had been published on its website for the information and compliance of relevant stakeholders.
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The handbook covers applications for commercial banks, digital banks, microfinance banks (MFBs), exchange companies, electronic money institutions (EMIs), payment system operators and payment service providers (PSOs/PSPs), as well as private credit bureaus.
Under the new arrangement, all new applications for licences or authorisations in these categories will be processed according to the requirements specified in the handbook.
The SBP said the document consolidates existing instructions and establishes eligibility criteria, application procedures, documentation requirements and key assessment considerations for prospective applicants.
The framework is aligned with international standards, including the Basel Core Principles and Financial Action Task Force (FATF) Recommendations, while taking Pakistan’s regulatory environment into account.
The handbook also requires applicants to ensure that their governance arrangements, internal policies and risk management frameworks comply with applicable SBP regulations and other relevant laws.
Commercial banking requirements
The handbook sets out eligibility conditions for commercial banking licences, including applicants’ financial strength, integrity and relevant banking or financial services experience.
It also maintains a moratorium on establishing new commercial banks wholly owned by local sponsors. Foreign investors may establish locally incorporated banks, either as wholly owned subsidiaries or as controlling shareholders alongside domestic partners, subject to regulatory requirements.
Locally incorporated banks must maintain minimum paid-up capital of Rs20 billion, or another amount prescribed by the SBP.
Foreign bank branches are generally required to maintain assigned capital of Rs5 billion for up to five branches and Rs10 billion for six to 50 branches, subject to applicable regulations.
The central bank further requires regulated entities to maintain minimum capital requirements and comply with capital adequacy, liquidity and leverage standards.
The handbook is intended to provide a common reference for applicants and must be read alongside relevant SBP prudential regulations, circulars and guidelines.
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