The State Bank of Pakistan (SBP) has released its draft Open Banking Regulations for public consultation, seeking to establish a framework that encourages financial innovation, strengthens competition and expands access to efficient, customer-focused digital financial services across the country. The proposed regulations are intended to support the development of a more connected financial ecosystem by allowing customers to exercise greater control over their financial information through secure, consent-based data sharing. The framework will also enable authorised Third-Party Providers (TPPs) to initiate business payments, creating opportunities for banks, fintech companies and technology providers to introduce new financial services and improve existing payment processes.
A central feature of the proposed framework is the ability of customers to authorise the sharing of their financial data with approved third-party service providers. This approach is designed to give individuals and businesses greater flexibility in how their financial information is used while maintaining customer consent as a key requirement. Through secure access to authorised financial data, service providers could develop more personalised products, improve financial assessments and offer services that better reflect the requirements and financial circumstances of customers. The framework is also expected to encourage collaboration between traditional financial institutions and emerging fintech companies.
The draft regulations are expected to support the digitalisation of business-to-business (B2B) and consumer-to-business (C2B) payments. By enabling authorised third-party providers to initiate business payments, the framework could simplify payment processes for companies and consumers while supporting more efficient digital transactions. Businesses may benefit from improved payment arrangements, reduced dependence on manual processes and greater integration between financial service providers. For consumers, the proposed arrangements could contribute to more convenient payment experiences and wider access to digital financial solutions.
Open banking could also introduce new opportunities for improving credit assessments and expanding access to financing, particularly for small and medium enterprises (SMEs). With customer-authorised financial data sharing, lenders and authorised service providers may be able to assess financial activity using a broader range of information. This could help create more detailed assessments of businesses that have limited access to traditional financing channels or lack extensive credit histories. Improved access to relevant financial information may also support the development of financing products tailored to the needs of smaller enterprises, helping address some of the challenges associated with obtaining business credit.
The proposed framework also provides opportunities for financial institutions and fintech companies to develop more customised financial products and services. Access to consent-based financial information could support better understanding of customer needs, improve service delivery and encourage the introduction of innovative solutions across the banking and payments industry. By establishing a regulated environment for data sharing and payment initiation, SBP aims to encourage competition while ensuring that customer information is handled through authorised and secure arrangements.
According to SBP, the draft regulations have been developed in alignment with international best practices and take into account the outcomes of the recently concluded first cohort of its Regulatory Sandbox on Open Banking. The sandbox provided an opportunity to examine open banking-related activities and gain insights into the practical requirements of introducing such services within Pakistan’s financial system. The proposed regulations incorporate safeguards covering data protection, privacy, cybersecurity, fraud prevention and consumer protection. These measures are intended to address potential risks associated with the sharing of financial information and the involvement of third-party providers in payment services.
The framework also supports SBP’s broader strategic objective of advancing digital financial services through a more connected, inclusive and efficient financial ecosystem. As digital financial activity continues to expand, establishing clear regulatory requirements for data access, customer consent and payment initiation is becoming increasingly important. The proposed regulations aim to create a structured environment in which financial institutions and technology companies can introduce new services while maintaining appropriate protections for customers and the wider financial system.
As part of the consultation process, SBP has invited feedback from financial institutions, fintech companies, technology providers, consumer groups, academic institutions and members of the general public. Stakeholders have until November 30, 2026, to submit their comments and recommendations on the proposed framework. Feedback can be submitted through email to psdpolicy@sbp.org.pk with the subject line “Feedback on Draft Open Banking Regulations”. Written submissions can also be sent to the Payment Systems Policy & Oversight Department, 4th Floor, SBP Building, I.I. Chundrigar Road, Karachi.
The consultation process will allow stakeholders to share their perspectives on the proposed regulatory requirements before the framework is finalised. Their input is expected to help SBP refine the regulations and address practical considerations surrounding implementation, security, customer consent and the responsibilities of authorised third-party providers. The draft represents an important regulatory development for Pakistan’s digital finance sector, with the proposed framework seeking to balance innovation and competition with the protection of customer information and the security of financial transactions.
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