The Presidents/ Chief Executives
All Banks/ Microfinance Banks (MFBs)

Dear Sir/Madam,

Branchless Banking (BB) Regulations for Financial Institutions

    Please refer to the “Branchless Banking (BB) Regulations” issued vide BPRD Circular No. 10 of December 30, 2019.

2. To further strengthen the controls against Money Laundering (ML)/ Terrorist Financing (TF) risks, banks and MFBs offering BB services (Authorized Financial Institutions) are advised to:

1. Perform Biometric Verification (BV) of account/ wallet holders for all types of ‘cash-in’ and ‘cash-out’ transactions at BB agents’ locations effective from January 31, 2024. This is in addition to the BV of transactions and customer types already specified in the above referred Circular.
2. Prioritize deployment of new BV devices, needed for the implementation of above instructions, at agents’ locations in high TF risk areas followed by deployment in other areas across the country.
3. Take all necessary measures and controls including upgradation of the related hardware and software to comply with the above instructions. 
4. Strengthen their Automated Transaction Monitoring Systems (ATMS) to ensure that all BB transactions, including those conducted at agents’ locations, are captured and the system has capability to: 
1. flag suspicious/ unusual/ out-of-pattern transactions and accounts with unusually high number of transactions, for further assessment and reporting of Suspicious Transaction Reports (STRs) under AML Act 2010; and
2. reconstruct individual BB transactions so as to facilitate gathering of necessary evidence needed in any criminal investigation under the relevant laws.
5. Ensure adequate and meaningful coverage of BB operations in the Internal Risk Assessment Reports (IRARs) as required under the SBP’s AML/ CFT/ CPF Regulations.

3. All other instructions on the subject shall, however, remain unchanged.

4. Please acknowledge receipt.