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State Bank of Pakistan Defines Financial Services and Key Terms
The State Bank of Pakistan (SBP) has issued a notification defining various financial services and key terms related to banking and finance. The notification aims to provide clarity on the scope of financial services and regulatory requirements for banks and other financial institutions operating in Pakistan.
Financial Services Defined
According to the notification, financial services include:
- Banking and other forms of business as specified in Schedule I
- Development finance
- Leasing
- Foreign exchange business
- Money transmission services
- Modaraba
- Brokerage business
- Securities trading
- Other services offered by Asset Management Companies
- Real estate investment under REITs (Real Estate Investment Trusts)
- Discounting services
- Portfolio management
- Financial advisory services
- Consultation and advice on capital structure, business strategy, and mergers & acquisitions
Key Terms Defined
The notification defines several key terms:
Foreign Bank
A foreign bank is a body incorporated outside Pakistan that is licensed to carry on banking business through a branch in Pakistan.
Function
A function includes power and duty.
Functional Supervisor
A functional supervisor refers to the primary regulatory body of a person or institution under relevant laws.
Holding Company
A holding company has the same meaning as defined in Section 3 of the Companies Ordinance, 1984.
Liquid Assets
Liquid assets are assets that are readily convertible into cash, including:
- Cash
- Gold
- Balances with banks
- Money at call in Pakistan
- Treasury bills
- Sukuk
- Securities issued and guaranteed by the Federal Government
Other Key Terms Defined
The notification also defines:
Manager
A manager refers to an officer responsible for an office or department of a financial institution.
Non-Operating Bank Holding Company
A non-operating bank holding company is authorized by the State Bank to act as an owner or controller of a bank or entity specified in Section 3, but does not carry on any business other than ownership or control of other companies engaged in financial services.
Permissible Activity
Permissible activity refers to any activity specified in Schedule I.
Person
A person includes:
- Individuals
- Corporations
- Statutory bodies
- Local authorities
- Societies
- Trade unions
- Co-operative societies
- Partnerships
- Other juridical persons