Circular No. 07 of 2011
May 27, 2011
SERVICE CHARGES ON PLS DEPOSIT ACCOUNTS
refers to BPD Circular No.23 dated July 4, 2003 and subsequent
instructions issued from time to time, allowing banks
to recover service charges on deposit accounts commensurate
with the services provided by them.
2. Subsequently, SBP took a number of initiatives such
as introduction of the Basic Banking Accounts (BBA), liberalization
of Branch Licensing Policy, fixation of maximum limit
on service charges at Rs. 50/per month, exemption of Salary
and Zakat Accounts from service charges, introduction
of Branchless Banking and encouraging the establishment
of Microfinance Banks, with the objective of promoting
savings and improving financial inclusion.
3. However, it has been observed that in recent years
the number of account holders, in particular the number
of small depositors, has declined despite an increase
in the number of bank branches. Among other factors, the
levy of service charges on deposit accounts is considered
to be one of the main reasons for this trend.
4. Hence with the objective of encouraging documented
transactions and increasing financial outreach, the following
instructions on the opening, maintenance and closing etc.
of all types of bank accounts, except the Special Deposit
Accounts wherein banks offer added services to its customers/account
holders, are being issued under Section 41 of Banking
Companies Ordinance 1962. These instructions would be
applicable with effect from July 1, 2011.
banks shall not refuse opening of accounts for prospective
clients who meet the requirements laid out in the
Prudential Regulations, other instructions issued
by SBP from time to time and banks' own policies.
services rendered by banks for the opening and maintenance
of regular savings accounts shall be free of charge.
There shall be no condition of maintaining a minimum
balance for these accounts. These instructions are
applicable equally on all existing and new accounts.
Similarly, no charges would be recovered by banks
at the time of closing an account.
shall not demand more than Rs. 100/- as an initial
amount for opening of regular savings accounts.
However, no initial deposit would be required for
opening of accounts by (i) Mustahkeen of Zakat,
(ii) Students, (iii) Employees of Government or
Semi Government institutions for salary and pension
purposes (including widows/children of deceased
employees eligible for family pension/benevolent
fund grant, etc.) and other similar types of accounts.
banks shall pay profit invariably on "Profit
and loss sharing (PLS) Accounts" without any
condition of minimum balance in accordance with
instructions issued by SBP from time to time.
banks shall ensure that all terms and conditions
for the operation of an account, especially in case
of its dormancy, closing and/or subsequent reactivation
are brought into the knowledge of the customer at
the time of account opening. The terms and conditions
shall be clearly documented in the Account Opening
Form/Application and must be signed by the account
holders, to signify that they have been read and
understood. A copy of the Account Opening Form must
be provided to the account holders duly verified
by the authorized official(s) of the branch with
proper record of acknowledgement. Any ambiguity
in the terms and conditions mentioned in the Account
Opening Form shall be construed to be in favor of
the account holders.
Key features of the Account Opening Form shall be
translated into Urdu and a printed copy of such
translation shall be shared with the account holders
at the time of opening of the account.
Banks are further advised to develop appropriate products
for attracting deposits and encouraging savings. They
shall make concrete efforts to provide maximum facilities
in a friendly manner, to both existing and the potential
customers/account holders for convenient/smooth operations
of their accounts. Proper training may also be imparted
to the concerned officials for improvement in the service
Banks shall also facilitate those BBA account holders
who desire to convert their accounts from BBA to regular
Banks shall ensure compliance with the above instructions
as non-compliance and circumvention of instructions shall
be dealt in accordance with the relevant provisions of
The above instructions supersede the instructions issued
vide BPD Circular No.23 dated July 4, 2003 and BPD Circular
letter No.02 dated January 7, 2005.