Central bank says inter-bank transfers of up to Rs. 25,000/month will remain free, as will intra-bank transfers of all amounts
The State Bank of Pakistan (SBP) on Thursday announced that it is allowing banks and other service providers to start charging a “nominal” fee for inter-bank fund transfers exceeding Rs. 25,000 in a single month.
In a statement, the central bank said that in March 2020 it had directed all financial service providers to offer free inter-bank fund transfer facility to cope with the “extraordinary situation of lockdowns amid the COVID-19 pandemic.” It said this was intended to reduce in-person interaction and boost the use of online services. “This step resulted in an overwhelming response by customers, with internet and mobile banking transactions more than doubling in Q2FY21 over the last year,” it said, but noted this had resulted in service providers incurring substantial revenue losses as they could not recover operational costs.
With the COVID-19 pandemic on the decline in Pakistan, read the statement, the SBP had decided to review the IBFT pricing mechanism and implemented changes that would allow free services to continue on a sustainable basis. “The new instructions allow banks and other service providers to charge a minimal fee on high-value transactions while protecting and encouraging the low-income segments of population to continue using digital transactions free of cost,” it said, adding that individual banks were free to set higher limits than Rs. 25,000/month for free services.
“For transactions above the aggregate limit of Rs. 25,000 per account in a month, banks may charge individual customers, a transaction fee of no more than 0.1% of the transaction amount or Rs. 200, whichever is lower,” it said, stressing that this would allow service providers to recover part of costs incurred on providing IBFT service. “SBP has also advised banks that all digital fund transfer transactions between different accounts within the same bank (intra-bank fund transfers) shall remain free,” it said, adding that incoming IBFT services would also remain free.
The apex bank said that that banks had also been advised to remove any limits on the number of fund transfer transactions on their customer accounts/wallets “unless there are genuine concerns related to AML/CFT or frauds.”