In view of an increasing use of outsourcing of a number of services by banks and potential impact of associated risks on their overall strategic goals, operations, profitability and obligations to customers and regulators, State Bank of Pakistan has decided to issue the enclosed guidelines on outsourcing arrangements. These guidelines will be applicable on all Banks (including Islamic Banks), Development Finance Institutions and Microfinance Banks.

2. The guidelines are in addition to, and not, in derogation of any other related regulations/rules/laws. The State Bank of Pakistan during the course of inspection will check compliance with the guidelines.

Please acknowledge receipt.

Encl: Guidelines on Outsourcing Arrangements