The State Bank of Pakistan (SBP), in line with its Vision 2028 strategy, has formally issued guidelines for its Regulatory Sandbox (RSB) program. The initiative aims to provide a structured and secure environment for fintech startups and financial service providers to test innovative products and services under the regulatory oversight of the central bank. The guidelines were released under Section 3 of the Payment Systems and Electronic Fund Transfers (PS&EFT) Act, 2007.
The SBP’s Regulatory Sandbox has been introduced to accelerate the development and adoption of novel financial technologies in Pakistan’s digital economy. The sandbox is designed to allow both new and existing entities, including startups, to pilot their solutions within a controlled and monitored setting. This initiative reflects the central bank’s growing commitment to modernizing the country’s financial sector by fostering innovation while maintaining regulatory integrity and customer protection.
According to SBP, the Regulatory Sandbox will adopt a cohort-based model. Each cohort will focus on specific themes that reflect pressing market needs or emerging technology trends. The themes for the first cohort are expected to be announced by the end of June 2025, following the conclusion of an ongoing market engagement process. Once announced, the central bank will invite applications from eligible entities seeking to test their solutions within the sandbox framework.
Participants in the sandbox will be given the opportunity to trial innovative business models, products, and services that may not currently fall within existing regulatory parameters. This experimental phase will not only benefit innovators by providing them with regulatory support and feedback, but will also enable the SBP to better understand the implications of emerging technologies on Pakistan’s financial infrastructure.
The Regulatory Sandbox initiative is expected to help the SBP refine and improve the broader regulatory framework. By observing real-world applications of new technologies in a low-risk setting, the central bank can adapt its policies to accommodate future trends without compromising the stability or security of the financial system.
The SBP has encouraged all relevant stakeholders, including fintech companies, banks, non-banking financial institutions, and technology providers, to take advantage of the RSB platform. By participating in this initiative, they can contribute to the growth of Pakistan’s digital financial ecosystem, improve customer access to financial services, and support the central bank’s broader goal of financial inclusion.
For those interested in joining or inquiring about the Regulatory Sandbox, the SBP has invited feedback and queries through its official communication channels.
As Pakistan’s fintech sector continues to expand, the launch of the Regulatory Sandbox is a crucial step in bridging the gap between innovation and regulation. It positions Pakistan to become a more agile, innovation-friendly market while ensuring the protection of consumers and the financial system.