SBP Gives Local Banks Control Over Managing Foreign Investment and Dividends

The State Bank of Pakistan (SBP) has simplified foreign investment processes and capital inflows by assigning greater responsibility to banks in managing foreign shareholding transactions.

Under a new circular issued on Monday, the SBP has authorized commercial banks (Authorised Dealers) to handle the registration of shares and units issued or transferred on a repatriable basis to non-resident investors. Banks will also facilitate the remittance of dividends and disinvestment proceeds to foreign shareholders.

The central bank said the reforms are designed to streamline procedures, reduce documentation requirements, and improve efficiency in foreign exchange and investment operations.

As part of the new framework, the SBP has also amended the Foreign Exchange Manual and introduced updated standard operating procedures for implementation. The changes will take effect one month after the circular’s issuance, giving banks time to upgrade systems.

A key feature of the overhaul is the launch of a new digital platform, the Non-Resident Shareholding Registration System (NSRS), which will centralize and automate records of foreign ownership in local companies, along with tracking dividend payments and capital repatriation.

Under NSRS, banks will submit monthly data through the Data Acquisition Portal, covering share issuance, investor banking details, dividend transfers, and disinvestment transactions. The first report, covering July 2026 activity, will be due in early August 2026.

The SBP has also mandated a phased submission of historical data. Transactions from 2021 to mid-2026 must be submitted within four months, followed by data from 2016–2020 within six months, and records from 2006–2015 within one year.

Once all phases are completed, banks will be required to submit a compliance certification confirming the accuracy and completeness of the data, signed by senior compliance officials.

The central bank said the reforms are part of broader efforts to modernize financial infrastructure and make Pakistan’s investment environment more transparent and investor-friendly.