The State Bank of Pakistan (SBP) has relaxed the conditions for inactive accounts in its regulated entities (REs) through a new set of amendments, making it easier for customers to maintain accounts in the financial institutions for a longer period even without doing any transactions.
In order to provide clarity regarding dormancy requirements and to simplify the dormant account activation process, the SBP has decided to amend relevant provisions of the Anti-Money Laundering, Combating the Financing of Terrorism, & Countering Proliferation Financing (AML/CFT/CPF) Regulations, said the circular issued on Monday.
According to the new amendment, customers can now login to their accounts through digital channels such as internet banking or mobile banking once a year and keep their accounts active without initiating any transaction (debit or credit) or activity.
SBP further advised its regulated entities, including commercial banks, microfinance banks, branchless banking operators, and fintech operators, to enhance communication with their customers before putting their names on the list of inactive customers or making their accounts dormant.
The regulated entities will send prior notice to the account holder through any registered medium, e.g., SMS, email, etc., before marking the account dormant.
Notices will be sent one month, seven days, and one day prior to marking the account dormant. The notice will also include the account activation procedures and channels.
SBP REs may allow credit entries into dormant or inoperative accounts. Debit transactions or withdrawals will not be allowed until the account is activated. However, transactions, e.g., debits under the recovery of loans and markup, etc., any permissible bank charges, government duties or levies, and instructions issued under any law or from the court will not be subject to a debit or withdrawal restriction.
SBP REs may activate the dormant account upon receipt of a formal request from the customer through any authenticated medium, including their mobile banking applications, internet banking portals, ATMs, call centers, surface mail, email, a registered mobile or landline number, etc.
Previously, the financial institutions used National Database and Registration Authority (NADRA) Verisys and a formal request (through a postal address, email address, registered mobile number, or landline number) for the activation of a dormant account by customers. They should retain the NADRA Verisys for record-keeping requirements (digitally or in hard copy).
Debit transactions and withdrawals were not allowed until the account was activated at the request of the account holder.