KARACHI: The State Bank of Pakistan (SBP) has introduced updated regulations to prevent banks from freezing or blocking customer accounts without proper legal authorization. The new guidelines were issued in response to an order from the Islamabad High Court (IHC) and aim to ensure banking practices adhere strictly to legal standards.
According to the directives, banks are now required to verify the legitimacy of any account restrictions and avoid imposing such measures without valid legal grounds. The SBP emphasized that precautionary restrictions should not cause unnecessary hardship to account holders. Financial institutions must establish robust internal procedures to comply with these rules and prevent unlawful account restrictions.
Following the issuance of these guidelines, the SBP submitted a compliance report to the IHC, reaffirming its commitment to safeguarding customers’ rights. The court’s decision came after a case where a citizen’s bank account was frozen during an investigation by the National Cyber Crime Investigation Agency (NCCIA). Justice Arbab Muhammad Tahir, who presided over the case, ruled that the bank’s action was unjustified and fined the bank Rs300,000, requiring it to cover the customer’s legal costs.
The court’s ruling highlighted the importance of banks operating within the bounds of the law and ensuring customers have unfettered access to their funds. It also directed the SBP to take proactive steps to prevent similar incidents in the future, protecting citizens from unwarranted account restrictions.
