Karachi, February 5, 2026 – The State Bank of Pakistan (SBP) is preparing to roll out a comprehensive “carrot and stick” policy aimed at strengthening asset recovery in cases of financial crimes, including corruption and money laundering, according to official documents.
Under the proposed framework, the central bank plans to unveil a robust asset recovery mechanism by June 2026, designed to improve compliance and effectiveness across the financial sector. The initiative seeks to align incentives and penalties to encourage proactive participation by financial institutions (FIs) in tracing, freezing, and recovering illicit assets.
As part of the mechanism, the SBP will introduce structured incentives for individuals and institutions that actively assist in asset recovery efforts. At the same time, stringent penalties will be imposed on financial institutions found noncompliant with asset recovery protocols or guilty of procedural lapses. The policy is expected to clearly define the scope of rewards and sanctions, along with the associated systems, governance structures, and operational processes required for effective implementation.
Officials said the incentive-and-penalty framework will be supported by improved institutional and procedural arrangements, with a strong focus on capacity building among relevant stakeholders. This includes enhancing the technical expertise of banks, regulators, and law enforcement agencies involved in combating financial crimes.
The move is aimed at strengthening Pakistan’s financial integrity regime and enhancing the country’s ability to recover proceeds of crime, particularly in cases involving corruption and money laundering. By introducing measurable accountability and performance-based incentives, the SBP hopes to significantly improve asset recovery outcomes and reinforce compliance with international anti-money laundering standards.