SBP Governor: Digital banking and branchless banking under development

KARACHI: The Governor of the State Bank of Pakistan (SBP) announced on Tuesday that the central bank has granted a digital banking license to Easy Paisa Bank Ltd. This move is seen as a significant step toward the expansion of digital banking in Pakistan.

The SBP Governor emphasized that the central bank is working on the regulatory framework for both digital banking and branchless banking. He pointed out that a large portion of Pakistan’s population, particularly in remote areas, does not have access to traditional banking services. “Around half of the population in Pakistan’s far-flung areas have no accounts in banks,” he said, stressing the urgent need for digital banking to bridge this gap.

The Governor also highlighted that digital banking could play a key role in empowering small and medium-sized enterprises (SMEs), enabling them to access financial services more easily and efficiently.

In related news, the SBP Governor also announced a reduction in the policy rate by 100 basis points (bps) in the first monetary policy of 2025. This brings the policy rate down to 12 per cent, effective from December 17, 2024. The decision was made during a meeting of the Monetary Policy Committee (MPC), which was chaired by Governor Jameel Ahmad.

In a press conference following the MPC meeting, Governor Ahmad stated that inflation in Pakistan is gradually decreasing, with the inflation rate dropping to 4.1% in December 2024. He projected that the inflation rate would remain between 5% and 7% for the fiscal year 2024-25.

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