Circulars/Notifications - Payment Systems Policy & Oversight Department  
 PSP&OD Circular No 02 of 2023
June 21, 2023

The Presidents/CEOs
All Banks/MFBs/PSOs/PSPs/EMIs (Regulated Entities)

Dear Sir/Madam,

Digital Payment Services to Unauthorized Digital Lending Apps

        It has been observed that a number of un-authorized/un-licensed digital lending mobile application(s) and platforms are using banking channels, for loan disbursement and collection, and to perform credit worthiness checks through integration with bank accounts of customers. Such usage of digital banking channels and integrations with mobile banking platforms by these un-authorized/un-licensed digital lending apps pose serious concerns on consumer protection and may also be a cause of reputational risk for banks.

2. Foregoing, REs are advised to ensure that the licensing status of digital lending platforms/mobile applications and their authorization to conduct business are duly verified from the relevant regulatory bodies (SECP, SBP etc.) as part of the KYC/CDD process.

3. REs are also advised to review the licensing status of their existing customers offering digital lending services and their authorization to conduct business as per the above-mentioned process. A list of currently authorized/licensed entities involved in digital lending businesses can be accessed at web links below:



4.  Subsequently, REs are advised to implement reasonable measures, including at the time of customer on-boarding and transaction monitoring, to ensure that their banking channels and platforms are not used by unauthorized financial service providers either directly or indirectly. In this regard, REs shall not extend services such as, deposits or lending products, mobile application integration with third parties, payment gateway services, credit scoring and credit worthiness checks, wallet services, and/or API integration services to unauthorized/ unlicensed digital lending platforms (individuals or businesses) either directly or indirectly.

5.   Similarly, REs are also advised to refrain from extending the aforementioned services to entity types mentioned in SBP-EPD Circular Letter No. 8 of 2022.

6.   The above instructions are issued under Section 3(1) of the Payment Systems and Electronic Fund Transfers Act, 2007 and shall come into force with immediate effect. Any non-compliance thereof will attract appropriate enforcement action under the applicable laws and regulations.



(Shoukat Bizinjo)
Additional Director

About SBP
Economic Data
Press Releases
Laws & Regulations
Monetary Policy
Help Desk
SBP Videos
Contact us
What's New?
Online Tenders
Web Links

Educational Resources
Regulatory Returns
Rupey ko Pehchano
Zahid Husain Memorial Lecture
Best view Screen Resolution : 1024 * 768
Copyright © 2016. All Rights Reserved.