SBP opens draft open banking rules to public feedback

The State Bank of Pakistan has released draft Open Banking Regulations for public consultation, proposing rules that would allow customers to share their financial data with authorised third parties and initiate payments from their accounts.

The draft was made public on Friday. The Associated Press of Pakistan reported that a State Bank statement issued in Karachi said the regulations aim to foster innovation, enhance competition and expand access to efficient, customer-centric digital financial services in the country.

The proposal rests on consent-based data sharing. Customers would control how their financial information is used and shared, and would be able to initiate business payments through authorised Third-Party Providers, Daily Times reported.

The State Bank statement, as carried by APP, described the draft as a means of giving customers greater control over their financial data through secure, consent-based sharing and the initiation of business payments through authorised providers.

Daily Times reported that the regulations are expected to help digitise business-to-business and consumer-to-business payments. It said consent-based data sharing is also intended to support more robust credit assessments, easier access to financing for small and medium enterprises and the development of financial products tailored to particular customers.

The draft follows international best practices and draws on the outcome of the first cohort of the State Bank's Regulatory Sandbox on Open Banking, according to Daily Times. The same report said the draft sets out safeguards for data protection, privacy, cybersecurity, fraud prevention and consumer protection.

The State Bank said the regulations support its strategic objective of advancing digital financial services through a more connected, inclusive and efficient financial ecosystem, APP reported.

Both reports said the central bank had invited public comment on the draft. Neither gave a closing date for the consultation or a timeline for issuing the final regulations.