The State Bank of Pakistan (SBP) has made it compulsory for all banks and microfinance companies to digitize corporate payments and receipts.
The central bank has issued several guidelines in the past as well to ensure fast digitization of the financial sector. These consistent efforts lead to a significant rise in digital payments over the last couple of years.
“Towards digitization of payments and receipts in the corporate sector, the SBP has now made it mandatory for its regulated entities (REs) including banks, microfinance banks, payment system operators and payment system providers to provide digital means of payments to their corporate clients to enable businesses for sending and receiving their payments,” said a circular issued by the SBP on Friday.
The central bank, in its circular, has asked the regulated entities to “submit a roadmap of implementing these measures within 30 days” so that it could monitor the progress of implementation of these instructions.
“Banks are also required to submit quarterly progress reports to the SBP on the number of businesses facilitated for digitization of their payments and receipts,” it added.
The regulator has also asked the regulated entities to facilitate their institutional clients including corporations, companies, and partnerships to use digital channels for making large-value payments.
The new circular requires regulated entities to extend online portals and platforms for digital payments and receipts of corporate including online interbank fund transfer services, online bill, invoice sharing, and payment services like Over-the-Counter (OTC) digital payments services or facilities, card payments using Point of Sale (POS) terminals, mobile devices, ATMs, kiosk or any other digital payments enabled device.
The central bank expects these measures to result in better documentation of value chains. Businesses will also be able to manage their large value transactions more efficiently and effectively. Besides, it will aid the implementation of the Federal Board of Revenue’s recent measures on the integration of businesses with the FBR system.
These measures are expected to result in increased convenience for the customers to fulfill their financial needs through safe, rapid, and secure digital infrastructure in Pakistan.
The central bank also urged the REs to ensure all non-corporate players including Sole Proprietors, SMEs and MSMEs are onboard for provision of digital payments.