The State Bank of Pakistan (SBP) has introduced new safeguards to protect citizens’ money and bank accounts. Under the SBP new instructions for banks, financial institutions cannot block, freeze or restrict customer accounts without a valid legal reason, proper verification and approval from the relevant authority.
The central bank issued the directives in compliance with orders from the Islamabad High Court, which had already barred banks from blocking accounts without legal authority.
During hearings in the case, Justice Arbab Muhammad Tahir directed the State Bank to establish a clear internal mechanism to ensure that customers are not subjected to unnecessary hardship.
Acting on the court’s instructions, the SBP submitted a detailed report to the Islamabad High Court outlining the new framework. The report has now become public.
According to the new guidelines, banks often impose restrictions on customer accounts as a precautionary measure or unintentionally. However, the SBP has made it clear that such restrictions should not cause unnecessary inconvenience or financial loss to account holders.
The central bank said banks must carry out proper scrutiny and verification and ensure they have clear legal authority before taking any action against a customer’s account.
The SBP has also advised all banks to establish robust internal systems to fully implement the new guidelines. The aim is to prevent wrongful account closures and restore public confidence in the banking system.