Islamabad, May 7, 2026: A sub-committee of the Senate Standing Committee on Finance on Thursday directed the State Bank of Pakistan to submit Standard Operating Procedures (SOPs), regulatory instructions and guidelines related to Politically Exposed Persons (PEPs) and Financial Action Task Force regulations.
The meeting of the sub-committee was held at the Parliament House under the convenorship of Farooq Hamid Naek. Senators Muhammad Abdul Qadir and Anusha Rahman Ahmad Khan also participated, with the latter attending via Zoom.
During the briefing, committee members were informed about regulations governing PEPs, including the definitions of family members and close associates. Officials explained that family members included individuals related to a PEP either directly, through marriage or similar partnerships.
Senator Naek observed that such definitions appeared largely based on Western concepts, while in Muslim societies family relations were generally defined through blood ties. In response, SBP officials clarified that under the central bank’s regulations, PEP relations included spouses, lineal descendants, ascendants and siblings.
Senator Abdul Qadir stressed that banks should facilitate customers and avoid creating unnecessary hurdles for PEPs in conducting routine financial transactions.
The Deputy Governor of the State Bank further briefed the committee on FATF standards applicable to family members and close associates of PEPs. He informed the panel that banks were authorised to take reasonable measures to verify sources of wealth and funds and conduct enhanced monitoring of business relationships in line with international anti-money laundering standards.
The Deputy Governor also suggested that PEPs should approach designated focal persons at banks for facilitation and guidance regarding compliance procedures.
During the discussion, Senator Naek expressed concern over the treatment of personal accounts belonging to individuals with no business affiliations or financial dealings involving relatives. He questioned why independent children of PEPs were required to submit wealth statements and raised concerns regarding confidentiality in banking practices.
He maintained that banks should focus only on genuinely suspicious transactions rather than indiscriminately seeking wealth details from account holders.
Responding to the concerns, the Deputy Governor said transaction monitoring was a routine practice applicable to all customers and that banks usually sought clarification only in cases flagged by monitoring systems as suspicious.
Senator Anusha Rahman suggested replacing the term “suspicious transaction” with a more appropriate and less stigmatizing expression.
The committee was also informed that the State Bank had not yet issued formal regulations regarding cryptocurrency. Officials said a separate body, the Pakistan Virtual Assets Regulatory Authority, was being established to regulate crypto assets and issue relevant licences, while the banking regulatory framework concerning cryptocurrency remained under discussion with stakeholders.
At the conclusion of the meeting, Senator Naek directed the State Bank to furnish FATF regulations, instructions issued to banks and all SOPs formulated regarding PEPs. The Deputy Governor assured the committee that all relevant documents and regulations would be provided to the sub-committee.
