SBP Directs Banks to Open Accounts Without Income Proofs and Against Just Rs 100 Deposits

State Bank of Pakistan has directed banks to open “Asaan Account” for customers against a minimum deposit of Rs100 with no minimum balance requirement, submission of CNIC copy and basic details.

Due to the directive, hundreds of thousand of freelancers, technopreneurs, starter-ups, tutors, housewives and teenagers could open an account in any bank without disclosing source of income.

According to details, individuals will be able to open an Asaan Account with a simple and one page account opening form (paper based/electronic form). In this regard, Meezan Bank already has introduced Online account opening form.

These accounts shall preferably be Card Based with option of Cheque books. SMS/Internet/Mobile Banking and other ADCs. However, banks may offer these accounts as Current, Saving or Remunerative and requirements are related to basic customer information e.g. Name, Father/Spouse Name, DOB, Place of Birth, Mother’s Maiden Name etc.

The valid identity documents for account opening shall include CNIC, SNIC, NICOP, POC, ARC, Passport, and Pension Book.

The central bank has set the limit for monthly total debit at Rs. 500,000 whereas the total credit balance limit has been set at Rs. 500,000.

The initiative of Assan Account was taken in order to expedite the financial inclusion in Pakistan in which a target of 50% growth in bank accounts by adult population by the year 2020 has been set out as per National Financial Inclusion Strategy (NFIS)

The instructions were given to all commercial banks, Islamic banks, microfinance banks and branchless banking services.

The banks may convert existing Basic Banking Accounts (BBAs) to Asaan Accounts provided prior consent of customers is obtained and Terms and Conditions of Asaan Account are conveyed to them. However, banks shall not recover any charges for conversion of BBAs to these accounts.

Furthermore, in case the Asaan Account holder requires financial services for higher than the specified transaction limits, the Asaan Account may be converted to regular account subject to completion of Customer Due Diligence as per ‘AML/CFT Regulations’ and ‘Guidelines on Risk Based Approach’ for Banks/DFIs and other applicable requirements.

The initiative of Assan Account was taken in order to expedite the financial inclusion in Pakistan in which a target of 50% growth in bank accounts by adult population by the year 2020 has been set out as per National Financial Inclusion Strategy (NFIS).

Banks Likely To Get Scores of Customers

It has been observed that the arduous process for opening a bank account, namely the details and documentation requirements, do not allow a layman to get access of banks. Hence, many of them either avoid using the services or use someone else’s account (relatives and friends) for banking transactions.

Due to this situation most of small and medium sized businessmen, freelancers and daily wagers are rejected while trying to open up an account. As a result, our country has a mere 12 percent banked rate.

Bankers along with officials of central bank have finally realized that if easy accounts opening services are provided to a large section of society with very limited requirement of money transactions, millions of people could use the banking channel which will lead to financial inclusion ultimately. (Personally we think they are scrambling after seeing microfinancing solutions like EasyPaisa wildly succeed)

Now for Asaan Account, the competition is likely to begin among Conventional Banks, Islamic Banks, Microfinance Banks, Branchless Banking Services.