In a recent development, the State Bank of Pakistan (SBP) has introduced a series of changes to simplify the rules for inactive accounts in regulated enterprises (REs), allowing customers to maintain their accounts in financial institutions for extended periods without the need for transactions.
According to a circular issued on Monday, the SBP has amended the Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) Regulations to provide clarity on dormancy requirements and streamline the process for activating dormant accounts.
Under the new amendment, account holders can now access their accounts through internet banking or mobile banking once a year, keeping their accounts active without any debit or credit transactions.
Moreover, the SBP has advised regulated entities, including commercial banks, microfinance banks, branchless banking providers, and fintech providers, to improve communication with their clients before categorizing their accounts as inactive or dormant.
Prior to designating an account as dormant, financial institutions are required to notify account holders in advance through registered channels such as SMS or email. Notices will be sent one month, seven days, and one day before the account is marked as dormant, providing account holders with the steps and channels for account activation.
While credit entries into inactive or dormant accounts are permitted by SBP REs, withdrawals or debit transactions will not be allowed until the account is reactivated. Certain transactions, such as debits for loan repayments and markup, permitted bank fees, taxes or levies, and court-issued orders, will not be affected by the debit restriction.
Customers can request the activation of their dormant accounts through various verified media, including mobile banking applications, internet banking portals, ATMs, call centers, surface mail, email, registered cellphone, or landline numbers.
Previously, financial institutions utilized Verisys from the National Database and Registration Authority (NADRA) to activate dormant accounts based on formal requests made through postal addresses, email addresses, registered cellphone numbers, or landline numbers. The NADRA Verisys records were kept for record-keeping purposes, whether in digital or hard copy form.
With these regulatory changes, the SBP aims to provide customers with increased flexibility and accessibility to their accounts, while streamlining the process for dormant account activation in the financial sector.
