REGULATIONS FOR

ELECTRONIC MONEY INSTITUTIONS

(EMIs)

Issued on April 01, 2019

Revised on June 21, 2023

PAYMENT SYSTEMS POLICY & OVERSIGHT DEPARTMENT

STATE BANK OF PAKISTAN

 Regulations for Electronic Money Institutions

Table of Contents
1. ACRONYMS...................................................................................................................... 3
2. DEFINITIONS ................................................................................................................... 5
3. INTRODUCTION .............................................................................................................. 8
4. OBJECTIVES OF THE REGULATIONS ......................................................................... 8
5. AUTHORITY ..................................................................................................................... 9
6. APPLICABILITY .............................................................................................................. 9
7. SCOPE OF ACTIVITIES OF EMIS .................................................................................. 9
8. LICENSING PROCEDURE ............................................................................................ 10
I. LICENSING STAGES ......................................................................................................... 10
II. CONDITIONS FOR LICENSING APPLICATION ............................................................ 10
III. APPLICATION SUBMISSION FOR LICENSE ................................................................. 11
9. SUSPENSION AND REVOCATION OF EMI’S LICENSE .......................................... 12
10. GOVERNANCE ARRANGEMENTS ............................................................................. 12
I. FIT AND PROPER TEST .................................................................................................... 13
II. RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND MANAGEMENT ......... 13
11. CAPITAL REQUIREMENTS ......................................................................................... 15
12. CUSTOMER DUE DILIGENCE ..................................................................................... 16
13. CROSS BORDER E-MONEY PAYMENTS .................................................................. 17
14. E-MONEY PAYMENT INSTRUMENTS’ LIMITS ....................................................... 18
I. LIMITS DURING PILOT OPERATIONS ........................................................................... 18
II. LIMITS DURING COMMERCIAL OPERATIONS ........................................................... 18
III. ENHANCED E-MONEY WALLETS.................................................................................. 18
IV. BASIC E-MONEY WALLETS FOR MINORS................................................................... 19
V. ENHANCED E-MONEY WALLETS FOR MINORS ........................................................ 19
VI. EXCLUSIONS IN WALLET LIMITS ................................................................................. 20
15. ISSUANCE AND REDEMPTION OF E-MONEY PAYMENT INSTRUMENTS ....... 20
16. SAFEGUARDING CUSTOMERS’ FUNDS ................................................................... 20
17. USE OF AGENTS ............................................................................................................ 21
18. INTEROPERABILITY .................................................................................................... 22
19. OUTSOURCING OF FUNCTION(S) TO THE THIRD PARTY (IES) ......................... 22
20. COMPLAINT HANDLING MECHANISM ................................................................... 23
21. SECURITY AND CONFIDENTIALITY ........................................................................ 23
22. AML/CFT REQUIREMENTS ......................................................................................... 23
23. RISK MANAGEMENT MECHANISM .......................................................................... 24
24. OVERSIGHT & SUPERVISION OF EMIS .................................................................... 24
I. REPORTING REQUIREMENTS FOR EMIS ..................................................................... 24
II. RECORD RETENTION ....................................................................................................... 25
III. POWER TO CONDUCT ONSITE INSPECTION OF EMIS .............................................. 25
25. EXIT PLAN ...................................................................................................................... 25
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Annexure A ............................................................................................................................... 27
Annexure B ............................................................................................................................... 30
Annexure C............................................................................................................................... 32
Annexure D .............................................................................................................................. 34
Annexure D-1 ........................................................................................................................... 36
Annexure D-2 ........................................................................................................................... 38
Annexure D-3 ........................................................................................................................... 39
Annexure D-4 ........................................................................................................................... 40
Annexure D-5 ........................................................................................................................... 42
Annexure E ............................................................................................................................... 43
Annexure F ............................................................................................................................... 44
Annexure G .............................................................................................................................. 45
Annexure H .............................................................................................................................. 47
Annexure I ................................................................................................................................ 49
Annexure J ............................................................................................................................... 52

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1. ACRONYMS
ADC Alternative Delivery Channel
ANM Agent Network Management
AML/CFT/CPF Anti-Money Laundering, Combating the Financing of Terrorism &
Countering Proliferation Financing
APIs Application Programming Interfaces
AOA Articles of Association
BCP Business Continuity Planning
BOD Board of Directors
BPRD Banking Policy & Regulations Department
BVS Biometric Verification Service
CEO Chief Executive Officer
CDD Customer Due Diligence
CNIC Computerized National Identity Card
DRP Disaster Recovery Plan
EMI Electronic Money Institution
EDD Enhanced Due Diligence
FMU Financial Monitoring Unit
FPT Fit and Proper Test
IBFT Inter Bank Fund Transfers
IVR Interactive Voice Response
KYC Know Your Customer
MFB Micro Finance Bank
ML/TF Money Laundering/Terrorist Financing
MOA Memorandum of Association
NADRA National Database and Registration Authority
NICOP National Identity Cards for Overseas Pakistanis
NOC No Objection Certificate
NTN National Tax Number
OEB Outstanding E-Money Balance
PBA Pakistan Bankers Association
PKR Pakistani Rupee
PKRV Pakistan Revaluation Rate
POC Pakistan Origin Card

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PRI Pakistan Remittance Initiative

PSP&OD Payment Systems Policy & Oversight Department (formerly Payment
Systems Department (PSD))
PS&EFT Act, 2007 Payment Systems and Electronic Fund Transfer Act, 2007
PSOs/PSPs Payment System Operators/Payment Service Providers
RAS Regulatory Approval System
SBP State Bank of Pakistan
SBP-BSC State Bank of Pakistan-Banking Services Corporation
SECP Securities and Exchange Commission of Pakistan
SGLA Subsidiary General Ledger Account
SLA Service Level Agreement
SOPs Standard Operating Procedures
STR Suspicious Transaction Report
TMS Transaction Monitoring System
TPSPs Third Party Service Providers
UN United Nations
2FA Two Factor Authentication

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2. DEFINITIONS
Agent: means a natural or legal person, non-bank and non-EMI outlets, static or movable, who
can provide payment services as well as distribute and/or redeem e-money on behalf of an EMI
under a valid agency agreement.

Aggregate monthly load limit: means the total amount of e-money transferred/loaded into an
e-money account held by an e-money holder over the period of a calendar month.

Average outstanding e-money: is the average amount of balances maintained by an EMI with
licensed banks related to e-money in issue, for any given period and in the manner as defined
by SBP.

Bank: means a banking company as defined in Section 5 of the Banking Companies Ordinance,
1962.

Customer: For the purpose of these Regulations, the customers shall be any person holding
electronic money i.e. e-money holder

Director: includes any individual occupying the position of a director on the Board of an EMI
and includes sponsor director, nominee and alternate director or by whatever name called
which shall be reviewed by SBP from time to time.

Electronic Money or E-money: means the monetary value as represented by a claim on the
issuer which is stored in an electronic including magnetic device or Payment Instrument, issued
on receipt of funds of an amount not less in value than the monetary value issued, accepted as
means of payment by undertakings other than the issuer and includes electronic store of
monetary value on an electronic device that may be used for making payments or as may be
prescribed by the State Bank of Pakistan.

Electronic Money Institution or EMI: for the purpose of these Regulations EMIs means non-
banking entities duly authorized to issue means of payments in the form of electronic money.

E-money holder: refers to any person to whom the e-money has been issued or any person
who uses the e-money to make payments for purchases of goods and services and who has a
claim on e-money issuer for the e-money issued by the EMI.

Escrow Services: refers to a service through a financial agreement whereby money is held by
a regulated entity on behalf of two other parties that are in the process of completing a
transaction.

Executive Director: means a paid employee or executive in the concerned EMI who is also a
member of the Board of Directors (BOD).

Family Member: in relation to an individual means his spouse, dependent lineal ascendants
and descendants and dependent siblings.

Fintech: refers to as technologically enabled innovation in financial services that could result
in new business models, applications, processes or products.

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Issuer: for the purpose of these Regulations means the EMI, which issues e-money payment
instruments.

Key Executive: means key executives of EMI who are entrusted with the following functional
responsibilities:

a. Any executive, acting as second to CEO including Chief Operating Officer, Deputy
Managing Director or by whatever name called.
b. Chief Financial Officer/Head of Finance/ Head of Accounts
c. Head of Internal Audit
d. Head of Compliance
e. Head of Operations
f. Head of Human Resource
g. Head of IT
h. Head of Risk Management
i. Any other executive with direct reporting to CEO
Minor: for the purpose of these Regulations minor means an individual below 18 years of age.

Outsourcing: means use of a third party (affiliated entity or un-affiliated) to perform activities,
functions or processes normally to save money, time and/or use the skills/technology of another
entity on a continuing basis that would normally be undertaken by EMIs, now or in the future.
However, it will not cover consultancy services, purchase contracts for tangible/intangible
items, for example, contracts to purchase standardized products such as furniture, Software/IT
solutions, Automated Teller Machines (ATM) etc.

Payment Instrument: means instrument as defined in Section 2(1)(zc) of PS&EFT Act, 2007.

Payment Services: for the purpose of these Regulations mean the services that enable the
customers to make payments for goods and services, bill payments, fund transfers, cash deposit
and withdrawal from e-money accounts and any other service defined by SBP from time to
time.

Payment System: means the same as defined in PS&EFT Act, 2007.

PSOs/PSPs: mean the same as defined in the Rules for PSOs/PSPs issued by SBP vide PSD
Circular No. 3 dated October 23, 2014 as amended from time to time.

SBP: means the State Bank of Pakistan established under Section-3 of the State Bank of
Pakistan Act, 1956.

Sponsor Director: means the member of the Board of Directors of an EMI holding sponsor
shares.

Sponsor Shares: of an EMI mean 10% or more share capital of the EMI acquired by a
person(s) either individually or in concert with family members (including his spouse, lineal
ascendants and descendants and dependent brothers and sisters), group companies,
subsidiaries, and affiliates/associates.

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Sponsor Shareholder: means all those shareholders of an EMI holding sponsor shares.

Trust Account: means an account maintained by an EMI with a licensed bank in Pakistan in
which the EMI is required to place all funds collected from its customers against the issuance
of e-money and is segregated from EMI’s own funds.

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3. INTRODUCTION
Payment Systems and Electronic Funds Transfer (PS&EFT) Act, 2007 defines e-money as
monetary value stored on an electronic device or payment instrument issued on receipt of funds
and accepted as a means of payment by entities other than issuer. E-money globally is widely
used for making retail payments in an economy and has played a crucial role in digitizing
different types of payments in various countries.

Electronic Money Institutions (EMIs) are entities that offer innovative, user-friendly and cost
effective low value digital payment prepaid instruments like wallets, prepaid cards, and
contactless payment instruments including wearables. Globally, these innovative payment
instruments have been instrumental in promoting cashless payments like merchant checkouts,
e-commerce, transportation and toll payments etc.

Traditionally, payment instruments in Pakistan are issued by banks without participation of

non-banking entities. New technological innovations are now enabling non-banking sector to
deliver innovative and efficient payment services to consumers at much lower cost. State Bank
of Pakistan (SBP), with the objective to remove the entry barriers for non-banking entities,
issued Regulations for EMIs in April 2019 to provide an enabling regulatory framework for
the establishment and operations of EMIs in Pakistan. These Regulations address potential risks
in order to ensure consumer protection in line with legal framework of the country while
promoting digital payments and financial inclusion.

Since issuance of these Regulations, SBP has received an encouraging response from the
market participants and a number of entities have been licensed to provide e-money services
in the market. SBP’s Regulations for EMIs have also received positive response and acceptance
from the foreign investors and the institutions alike. In order to increase the uptake of e-money
services, encourage the new as well as already established EMIs to come up with new business
models, use cases and technological solutions, SBP has revised the Regulations for EMIs in
light of the indigenous experiences and international best practices. These Regulations shall
come into effect with date of issuance.

4. OBJECTIVES OF THE REGULATIONS

These Regulations are being issued with the following objectives:

I. To provide regulatory framework for EMIs desirous of offering innovative payment

services to the general public.

II. To provide licensing procedure for entities desirous for establishing an EMI.

III. To prescribe minimum service standards and requirements for EMIs to ensure delivery
of payment services in a safe, sound and cost effective manner.

IV. To set minimum corporate governance benchmarks for EMIs.

V. To outline the permissible activities that can be carried out by an EMI and its agents'
network.

VI. To provide a baseline for protection of EMI’s customers.

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VII. To achieve the SBP’s objective of digital payments and financial inclusion.

5. AUTHORITY
The Regulations are being issued in exercise of the powers conferred upon the SBP under
PS&EFT Act, 2007.

6. APPLICABILITY
These Regulations are applicable to the EMIs as mentioned in sections 1 and 64 of PS&EFT
Act 2007.

7. SCOPE OF ACTIVITIES OF EMIS

I. E-money providers can offer following activities/services:

a) Issue e-money payment instruments.

b) Distribute e-money payment instruments.
c) Redeem e-money payment instruments.
d) Acquire payment instruments of other EMIs and banks/MFBs.
e) Multilateral routing, switching and/or processing of payment transactions.
f) Services relating to payment aggregation, bill/invoice aggregation, payment
initiation, as well as account information etc. However, the funds which are to be
remitted abroad for aggregation of funds by an aggregator on behalf of a foreign
counterpart, the aggregator must obtain prior approval of SBP.
g) Offer escrow services for facilitating domestic e-commerce transactions. However,
EMIs shall obtain separate approval from SBP.
h) Offer services via secured Application Programming Interfaces (APIs) and other
secure methods to other Financial Institutions, Third Party Service Providers
(TPSPs) and other Fintech. In this regard, the EMIs have to intimate SBP 30 days
prior to offering these services.
i) Any other activity permitted by SBP.
II. E-money shall be used to make payment services i.e. payments for goods and services,
bill payments, fund transfers, cash deposits and withdrawals from e-money wallets.

III. EMIs shall not conduct the business of banking including the acceptance of funds from
public for the purpose of lending, investments (other than that required under Para 16
of these Regulations). Moreover, EMIs shall refrain from processing, using, trading,
holding, transferring value, promoting and investing in virtual currencies or any other
prohibited speculative activity as and when prohibited by SBP from time to time.

IV. EMIs desirous of offering cross-border e-money products/services shall follow

instructions mentioned in para 13 of these Regulations.

V. EMIs shall neither pay interest/returns to customers nor offer anything that adds to the
monetary value of e-money, however, EMI may offer discounts etc. on goods and
services provided such discounts are not linked to the amount or length of time e-money
is held by the customer.
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VI. EMIs shall not issue e-money payment instruments at a discount i.e. issue e-money
payment instruments that has a monetary value greater than the funds received from
customers.

VII. The existing PSOs/PSPs authorized under the Rules for PSOs/PSPs who intend to
function as an EMI may upgrade their PSO/PSP authorizations to EMI license after
fulfilling necessary conditions laid down in these Regulations.

VIII. SBP may require the applicant to establish a separate subsidiary/entity for the purpose
of EMI business.

8. LICENSING PROCEDURE

I. LICENSING STAGES

a) Subject to the fulfilment of conditions mentioned above, SBP under Section 24 of

PS&EFT Act, 2007, may grant EMI license in the following four stages:

i. “Initiation Phase” approval shall be granted to only those prospective entities that
decides to follow the licensing procedure mentioned in Para 8.III(a)(i) of the
Regulations.
ii. An “In-Principle” approval shall be granted to the applicant to operate as EMI
which will contain conditions required to be fulfilled prior to the commencement
of pilot operations.
iii. EMI shall be allowed to commence “Pilot Operations” (limited-scale real
transactions), once they attain operational readiness, fulfil minimum capital and
security deposit requirements and any other requirements as mentioned in In-
Principle approval. SBP may also conduct off-site evaluations/onsite inspections of
the EMIs at any stage of the licensing procedure.
iv. Licence to commence “Commercial Operations/Go Live” shall be granted
subject to satisfactory completion of pilot operations and fulfilment of SBP’s all
requirements. Further, SBP may at its discretion designate any licensed EMI as a
designated payment system under PS&EFT Act, 2007.

b) For each stage of licensing process, the applicant EMI shall ensure to submit the
documents/information as per Annexure-A
c) The application to obtain In-Principle approval shall be considered to be complete if it
contains all the relevant information/documents required at the stage of In-Principle
approval as per Annexure C and Annexure G of these Regulations.

II. CONDITIONS FOR LICENSING APPLICATION

The applicant company shall fulfil the following licensing requirements:

a) The applicant company (public/private) shall be registered with SECP having its head
office or registered office in Pakistan.

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b) The applicant shall have necessary financial resources, policies, procedures, systems &
controls, IT systems etc. to effectively and efficiently discharge its responsibilities as
an EMI.
c) SBP reserves the right to reject any application without giving any reason thereof.
d) Moreover, approvals granted by SBP as part of licensing of EMIs are based on the
information/documentation submitted by applicant EMIs and a review of their
application under Regulations for EMIs. At any stage, SBP approvals shall not be
construed as an endorsement of an applicant EMI’s proposed business model, financial
viability, etc. by SBP. Accordingly, SBP shall not be responsible for any financial, legal
and reputational loss to any entity or individual who has established a business
relationship with prospective EMIs based on SBP’s approval letter.
e) At the time of application for “Initiation Phase” or “In Principle Approval”, details of
registration and related documents (i.e. Article and Memorandum) of parent/holding
company shall be shared with SBP. No changes shall be made in shareholding or
ownership/company structure without SBP’s prior approval.
f) SBP reserves the right to suspend/revoke the approval at any stage, if the applicant EMI
fails to comply with the conditions of SBP Approval(s) in a timely manner.

III. APPLICATION SUBMISSION FOR LICENSE

a) Entities desirous of applying for a license as an EMI may follow the following procedure:

i. Entities intending to initiate discussions prior to submission of formal application,

may approach SBP by emailing at [email protected]. In this regard, EMIs shall
have to fulfil the following criteria:

1. The applicant entity shall fulfil all the application requirements as mentioned in
Annexure “B”.
2. The applicant shall demonstrate the capability of fulfilling its obligations as an
EMI as per the relevant Laws, Rules and Regulations including PS&EFT Act,
2007 and these Regulations prior to applying for the EMI license.
3. The applicant shall demonstrate that they have necessary financial resources and
technical skills to implement policies, procedures, systems & controls and IT
systems to effectively and efficiently discharge their responsibilities as an EMI.
4. After successful demonstration, SBP may issue time-bound NOC for Permission
to apply through Regulatory Approval System (RAS), having a validity of 60
days. In case of failure to comply with the SBP’s requirements, the said
application shall be cancelled.

ii. Further, the entity may directly submit the application for EMI license electronically
through SBP’s RAS for which the applicant entity shall comply with the instructions
contained in PSP&OD Circular No. 02 of 2022 and as per the format attached at
Annexure “C”.
iii. In case of non-availability of RAS, the entity may send its application through surface
mail, addressed to “The Director, Payment Systems Policy & Oversight Department,
State Bank of Pakistan, 4th Floor, Main Building, I. I. Chundrigar Road, Karachi-
74000
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b) SBP will decide on the fate of an application within sixty days for an In-Principle
Approval subject to submission of all required information/documentation and
fulfillment of all regulatory requirements in a satisfactory manner by applicant EMI. In
case of an application being rejected by SBP, the applicant may apply again after one
year of such rejection.

9. SUSPENSION AND REVOCATION OF EMI’S LICENSE

I. SBP may revoke or suspend the license of an EMI if:

a) EMI is found to be involved in illegal or prohibited activities;

b) EMI fails to comply with conditions of the license; regulations, rules, guidelines,
instructions, directions and circulars issued by SBP from time to time and/or any
other applicable laws;
c) Any information provided by the EMI is found to be misreported to SBP;
d) EMI is not able to safeguard the customers’ funds as mentioned in Para 16 of these
Regulations;
e) EMI is not able to carry out its day to day operations safely and efficiently;
f) The provision of e-money issuance by the EMI endangers the stability of the
payment systems of Pakistan;
g) Revocation or suspension is in public interest;
h) The EMI enters into insolvency proceedings;
i) Any other reason substantiating the need for suspension or revocation of license
granted to EMI.

II. Subject to Para 9 (I), before suspending or revoking the license granted under Para 8 of
these Regulations and Section 24 of PS&EFT Act 2007, SBP shall give to the EMI
notice in writing of its intention to do so, specifying the ground(s) upon which it
proposes to suspend or revoke the license and shall require the EMI to submit to it
within 30 days a written statement of objections to the suspension or revocation of the
license.

III. Upon consideration of the written statement of objections referred to in Para 9 (II), SBP
shall give the EMI written notice of its decision to suspend, revoke or continue the
business operations.

IV. Notwithstanding Para 9-II, where the SBP is of the opinion that safety, soundness,
reliability or efficiency of an EMI is or may be threatened, it may, without prior notice,
suspend or revoke the permission of EMI.

10. GOVERNANCE ARRANGEMENTS

EMI shall ensure to implement an effective corporate governance framework that must include,
but not limited to, clear organizational structure with well-defined, transparent and consistent
lines of responsibility and control mechanism to ensure integrity of its e-money business. EMI
shall follow the Code of Corporate Governance issued by SECP as far as the provisions thereof

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do not conflict with any provisions of the PS&EFT Act, 2007 and other relevant regulations
issued by SBP.

I. FIT AND PROPER TEST

a) FPT will be applicable to sponsor shareholder(s), Directors, CEO and Key

Executives of the prospective EMI. The fitness and propriety will be assessed as
per the requirements mentioned at Annexure D-4.
b) The Directors and CEO would require prior clearance from SBP before assuming
their responsibilities. The compliance of FPT for Key Executives would be the
responsibility of EMI and the relevant record shall be made available to SBP as and
when required.
c) As FPT is an ongoing process, any changes in the information pertaining to the
individual’s subject to FPT, shall immediately be submitted to PSP&OD. Any
violations, misreporting, circumvention, concealment and delay in submission of
information to SBP may result in withdrawal of SBP’s approval/license or penal
action or both under PS&EFT Act, 2007.
d) Further, any major structural change in shareholding or any other material
development which could impact future ownership/shareholding shall be subject to
prior approval from SBP.
e) The appointment, compensation package, promotion/demotion and renewal of the
employment contracts of Key Executives shall be duly approved by the Board of
Directors (BOD) of the EMI.
f) EMI shall also develop and implement appropriate screening procedures to ensure
high standards and integrity at the time of hiring all employees whether contractual
or permanent. In case it is found at any stage or during the course of inspection by
SBP that FPT guidelines have not been followed or the incumbent is not a fit and
proper person, strict action shall be taken under the relevant provisions of PS&EFT
Act, 2007. In addition, EMI may be directed to dispense with services of concerned
officer if recruited afresh and in case of existing employee the same may be
transferred from the post immediately.

II. RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND MANAGEMENT

a) The BOD shall clearly define the authorities and key roles and responsibilities of
both the directors and senior management.
b) The BOD shall approve and monitor the objectives, strategies and the business plans
of the EMI and shall oversee that the affairs of the institutions are performed
prudently within the framework of applicable laws and regulations.
c) Further, the BOD should focus on policy-making and general direction, oversight,
supervision of the affairs and business of the EMI, however, the Board shall not
play any role in the day-to-day operations of the EMIs.
d) The BOD shall determine, review, approve and ensure implementation of internal
policies including but not limited to risk management, internal control systems,
audit, IT security, human resource etc. Moreover, the BOD shall also be responsible
to review and update existing policies periodically and whenever circumstances
warrant.
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e) A separate department for internal audit duly approved by the BOD shall be created.
f) BOD can remove CEO with a prior notice of 2 months issued where the BOD,
acting reasonably, are of the opinion that the CEO has acted fraudulently,
negligently, or in material breach of the EMI’s policies, procedures or his/her
employment agreement. Acting CEO appointed pursuant to resignation/removal of
the CEO is required to meet FPT criteria prescribed for CEO and the EMI shall duly
submit FPT documents to SBP before assumption of the charge.
g) In case of temporary vacation (not exceeding one month) of the office of CEO, EMI
shall ensure to entrust charge of the office of CEO to such an officer who meets the
FPT Criteria prescribed for Key Executives and whose FPT documents have
already been submitted to SBP.
h) Where office of any Director/CEO falls vacant, such position can only be filled with
prior approval of SBP. However, any new appointment / placement of Key
Executives other than Directors or CEO shall be intimated to SBP within seven days
of appointment / placement.
i) The business conditions and markets are ever changing and so are their
requirements. The BOD, therefore, is required to ensure existence of an effective
‘Management Information System’ to remain fully informed of the activities,
operating performance and financial condition of the institution, the environment in
which it operates, the various risks it is exposed to and to evaluate performance of
the Management at regular intervals.
j) The BOD should meet frequently (preferably on monthly basis, but in any event,
not less than once every quarter) and the individual directors of an institution should
attend at least half of the meetings held in a financial year. The BOD should ensure
that it receives sufficient information from Management on the agenda items well
in advance of each meeting to enable it to effectively participate in and contribute
to each meeting.
k) EMIs shall submit certified copies of the minutes of meeting of their BOD and the
General Meetings /Extra Ordinary General Meetings (AGMs/EOGMs), within
twenty-one days of the date of the meeting to Payment Systems Policy & Oversight
Department, State Bank of Pakistan, Karachi. In case there is any change in the
approved minutes from the draft minutes submitted earlier, the EMI shall also
submit certified copies of the minutes within ten days of the approval. Further, any
change from the draft minutes must be separately highlighted to SBP.
l) The BOD should ensure that it receives management letter from the external
auditors without delay. It should also be ensured that appropriate action is taken in
consultation with the Audit Committee of the BOD to deal with control or other
weaknesses identified in the management letter.
m) The BOD should carry out its responsibilities in such a way that the external
auditors and supervisors can see and form judgment on the quality of BOD’s work
and its contributions through proper and detailed minutes of the deliberations held
and decisions taken during the BOD meetings.
n) To share the load of activities, the BOD may form specialized committees with
well-defined objectives, authorities and tenure. These committees, comprising of at
least one non-executive Board member, shall oversee areas like Audit, Risk
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Management & Compliance (mandatory) and Human Resources (optional). The

Chairman of the BOD shall not be member of the aforementioned committees.
Further, the Audit Committee of the BOD shall invariably be chaired by an
Independent Director. These committees of the BOD should not indulge in day-to-
day affairs/operations.
o) The EMIs during a calendar year may pay a reasonable and appropriate
remuneration for attending the Board or its committee(s) meeting(s), to their non-
executive directors and chairman. The scale of remuneration to be paid to the non-
executive directors and chairman for attending the BOD and/or committee meetings
shall be approved by the shareholders on a pre or post facto basis. The EMI should
have BOD approved related party policy.
p) The BOD shall collectively have adequate knowledge, expertise and skill-mix
commensurate with the business model, overall size, complexity and risk profile of
the EMIs. Further, the BOD should collectively have a reasonable understanding of
local, regional and, if appropriate, global economic and market forces and of the
legal and regulatory environment.
q) The BOD shall comprise of at least 5 members including Chairman, Directors and
Independent Directors. Moreover, out of the total board members at least one (01)
shall be Independent Director and one (01) shall be a Woman Director.
r) No member of the BOD of an EMI, holding 10% or more of paid-up capital either
individually or in concert with family members shall be appointed in the EMI in
any capacity except as CEO of the EMI. Further, maximum two members of the
BOD of the EMI including its CEO can be the Executive Directors.
s) The number of directors who are family members shall not exceed 25% of total
board members.
t) The BOD of EMI shall appoint a qualified and experienced person as Compliance
Officer. The Compliance Officer shall report directly to the CEO and shall be
responsible for effective compliance of all the relevant rules, regulations, laws and
timely submission of required accurate data, returns and other information, as
required by SBP from time to time.
u) No Executive other than the CEO and Head of Internal Audit shall directly report
to BOD and sub-committees of Board.

11. CAPITAL REQUIREMENTS

I. An entity desirous of becoming an EMI is required to fulfill initial/startup capital
requirement of PKR 200 million and the minimum ongoing capital to be maintained at
all times shall be as follows:

Average Daily On-Going Capital

Slabs Outstanding E-Money Required
Balance (OEB)
1. Up to PKR 4 Billion PKR 200 million
2. Between PKR 4 Billion PKR 200 million plus 5% of Outstanding E-
and PKR 10 Billion Money Balances (OEB) in excess of PKR 4
Billion

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3. Between PKR 10 PKR 500 Million plus 7.5% of Outstanding E-

Billion and PKR 20 Money Balances (OEB) in excess of PKR 10
Billion Billion
4. Above PKR 20 Billion PKR 1.25 Billion plus 10 % of Outstanding E-
Money Balances (OEB) in excess of PKR 20
Billion *
*The EMI is required to inform SBP as soon as the OEB exceeds PKR 20 Billion.

II. The items qualified for calculating initial as well as ongoing capital are given in
Annexure “E”.

III. EMIs shall maintain at all times, at least ten percent (10%) of the required capital or
any other amount prescribed by SBP from time to time, as security deposit at SBP BSC
Office. Five percent (5%) of the security deposit will be kept in a non-remunerative
current account with the SBP BSC and five percent (5%) in the form of Government
securities to be kept under lien at SBP BSC. In this regard, EMIs shall submit the
undertaking as per the format attached at Annexure - H at the time of applying for In-
Principle Approval. The EMIs, currently at any stage of SBP licensing shall within one
month of issuance of these Regulations, submit their undertaking to PSP&OD, SBP.

IV. Moreover, the SOPs for EMIs account opening and its maintenance with SBP BSC are
attached at Annexure - I of these Regulations.

12. CUSTOMER DUE DILIGENCE

In order to provide the better user experience, EMIs shall make their customer on boarding
process digital keeping in view the risk management and AML/CFT considerations. EMIs shall
fulfill the following requirements while issuing e-money payment instruments:

I. EMI shall ensure to collect at least the following customer information while issuing e-
money payment instruments:

a) Name
b) Father/spouse’s name
c) CNIC, NICOP, POC, Passport, Alien Registration Card and POR Card for Afghan
Refugees
d) Mobile Number
e) Residential Address
f) Any other two field information which is not present on CNIC such as place of
birth, mother’s name etc.
g) Live original CNIC and live digital photo (where applicable).

II. The EMI shall use at least Two-Factor Authentication for customer verification.

III. EMI shall activate e-money payment instruments only after verification of customers’
particulars as mentioned in Para 12 (I & II) above as well as after pre-screening for
designated and proscribed persons before initiation of customer relationships or
allowing use of payment services.

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IV. EMI may allow their customers one credit/fund transfer transaction before verification
of customers’ credentials. In case, the customer’s credentials are not verified then e-
money payment instrument/account shall be closed and EMI shall file an STR
accordingly.

V. EMI shall conduct enhanced due diligence of those customers who are categorized as
high risk as per AML/CFT regulations and risk based guidelines of SBP.

VI. EMI shall take consent of customers on the terms and conditions of e-money payment
instruments including the charges/fee associated with such instruments. The copy of
terms and conditions shall also be made available to customers through various
channels like email, website, brochures, mobile phones, IVR etc.

VII. EMIs shall ensure that a CNIC holder can obtain/open only one e-money payment
instrument with an EMI.

VIII. EMI shall send transaction alerts in real time to their customers for all transactions.

IX. EMI, during issuance of e-money payment instruments or during transaction

processing, shall identify any suspicious activity and report such transactions to FMU
in the form of STRs.

X. EMIs shall ensure compliance of domestic and international sanctions obligations i.e.
freezing of assets and non-provision of services to individuals/entities
designated/proscribed by the UN Security Council or by the Government of Pakistan
under the Anti-Terrorism Act, 1997.

13. CROSS BORDER E-MONEY PAYMENTS

I. EMIs shall obtain prior approval from SBP for offering cross-border e-money
products/services, including inter alia for inward remittances or payment through cards,
involving outflow of foreign exchange. For this purpose, EMIs may approach Exchange
Policy Department, SBP, through an Authorized Dealer, through which such
products/services shall be offered/settled, along with the underlying proposal, after
obtaining In-Principle approval from PSP&OD.

II. While applying to SBP for approval for offering cross-border e-money
products/services at any stage of licensing process, the EMIs through its Authorized
Dealer shall submit business proposal, draft agreements, detailed terms and conditions
and value proposition regarding arrangements of EMIs with Authorized Dealer.

III. Inward Remittances (Received through Home Remittance/PRI Channel)

a. EMIs are allowed to disburse inward remittances in PKR to their wallet holders,
mobilized by Authorized Dealers (under home remittance arrangement), through
IBFT functionality or SBP operated systems via their Trust/Settlement Bank.

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b. EMIs shall approach the Authorized Dealer, through which such products/services
shall be offered/settled, to request Exchange Policy Department, SBP for the
permission to disburse inward remittances as prescribed in Para 13 (III)(a) above.
This is subject to the condition that EMIs have all the necessary
arrangements/resources and infrastructure in place to receive such funds in PKR.

14. E-MONEY PAYMENT INSTRUMENTS’ LIMITS

The following e-money payment instrument limits shall be followed:

I. LIMITS DURING PILOT OPERATIONS

a) The aggregate monthly load limit of an e-money payment instrument during pilot
operations shall be PKR 50,000 on CNIC verification (NADRA VeriSys) and PKR
200,000 on biometric verification from NADRA. The transaction limits shall be
treated separately for both payments and receipts on EMI instruments only.

b) Cash withdrawal limit for e-money holders shall be PKR 10,000 per day subject to
biometric verification or at least two-factor authentication.

II. LIMITS DURING COMMERCIAL OPERATIONS

a) The aggregate monthly load limit of an e-money payment instrument shall be PKR
50,000 on CNIC verification (NADRA VeriSys) and PKR 400,000 on biometric
verification from NADRA. The transaction limits shall be treated separately for both
payments and receipts on EMI instruments only.
b) Cash withdrawal limit for e-money holders that are verified through NADRA VeriSys
shall be PKR 10,000 per day.
c) For e-money holders verified through biometric verification from NADRA, EMIs shall
define cash withdrawal limits keeping in view the risk profile of the respective e-money
holder.
d) Further, EMIs shall ensure that all cash withdrawals through ATMs are subject to 2FA
and all cash outs through agents are subject to biometric verification or 2FA where BVS
availability is a major challenge. In this regard, EMIs shall make necessary
arrangements with PSOs/PSPs and Banks for facilitating their customers.

III. ENHANCED E-MONEY WALLETS

a) EMIs, after obtaining license for commercial operations, may apply to PSP&OD for
enhanced e-money wallet limits. In this regard, the EMIs shall be allowed to offer
increased e-money instrument limits up to PKR 1,000,000 to individual customer’s
subject to fulfilment of the following additional controls:

i. Income Proof and Source of funds as prescribed under Annexure-J;

ii. CNIC/SIM Pairing of the device on which EMI instrument is opened;
iii. EMI should deploy TMS with multiple/robust scenarios to monitor the transactions
such as one to many, many to one etc.
iv. Detailed customer risk profiling;

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v. Moreover, the function of the aforementioned verification of the controls mentioned

in this para from point (i-iv) above shall not be outsourced.

IV. BASIC E-MONEY WALLETS FOR MINORS

a) EMIs may offer e-money instruments to the minors subject to the following terms and
conditions in addition to the requirements prescribed in these Regulations:

i. The minors e-money wallets shall be opened in link with parent/guardian’s wallet
through parent/guardian’s wallet application only.
ii. The aggregate monthly load limit of these wallets shall be PKR 50,000 on CNIC
verification (NADRA VeriSys)
iii. Cash withdrawal limit shall be PKR 10,000 daily.
iv. The Minor’s e-money wallets shall be funded through parent/guardian’s wallet
only.
v. EMIs shall ensure that customer identification verification requirements are in line
with Regulations for EMIs and SBP’s AML/CFT/CPF regime especially for
minors.
vi. EMIs shall ensure that parent/guardian shall submit a written/digital undertaking to
accept any liability arising out of the action(s) of the minors.
vii. EMIs shall deploy the automated transaction monitoring system to proactively
monitor the transactions for avoiding the ML/TF risks.
viii. EMIs shall set the limits for minor e-money instruments and transactional limits as
stipulated in the Regulations. The enhanced limits as mentioned in Para 14.I, 14.II
and 14.III above shall not be applicable on minor’s e-money instruments.
ix. For record retention relating to minor e-money wallets, EMIs shall ensure that
instructions as given in Para 24.II of these Regulations are complied with.

V. ENHANCED E-MONEY WALLETS FOR MINORS

a) EMIs may offer enhanced e-money instruments to the minors working as freelancers
subject to the following terms and conditions in addition to the requirements prescribed
in these Regulations:

i. The minor e-money wallets shall be opened in link with parent/guardian’s wallet
through parent/guardian’s wallet application only.
ii. The aggregate monthly load limit of these wallets shall be PKR 400,000 on
biometric verification through NADRA.
iii. Cash withdrawal limit shall be PKR 10,000 daily.
iv. The minor’s e-money wallets shall be funded through parent/guardian’s wallet or
through sources considered appropriate by EMIs. In this regard, the EMIs shall
ensure that the source of income is properly verified.
v. EMIs shall ensure that customer identification verification requirements are in line
with Regulations for EMIs and SBP’s AML/CFT/CPF regime especially for
minors.
vi. EMIs shall ensure that parent/guardian shall submit a written/digital undertaking to
accept any liability arising out of the action(s) of the minors.
vii. EMIs shall deploy the automated transaction monitoring system to proactively
monitor the transactions for avoiding the ML/TF risks.

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viii. EMIs shall set the limits for minor e-money instruments and transactional limits as
stipulated in the Regulations. The enhanced limits as mentioned in Para 14.I, 14.II
and 14.III above shall not be applicable on minor’s e-money instruments.
ix. For record retention relating to minor e-money wallets, EMIs shall ensure that
instructions as given in Para 24.II of these Regulations are complied with.

VI. EXCLUSIONS IN WALLET LIMITS

a) Fully licensed EMIs with proven track record of successful business operations and
regulatory compliance may apply to SBP for exclusion of the following transactions
from the e-money wallet limits for biometrically verified wallet holders except for
minors:

i. Credit from employer for salaried persons against proof of employment through
authorized financial institutions (i.e. employer’s nominated bank account). In this
regard, it shall be the responsibility of the EMI to ensure veracity of the employer;
ii. Inward remittances received through Authorized Dealers up to PKR 1,500,000;
iii. Utility Bill Payments.

15. ISSUANCE AND REDEMPTION OF E-MONEY PAYMENT INSTRUMENTS

I. EMIs shall issue an e-money payment instrument without any delay at par value on
receipt of funds.

II. E-money payment instruments can be funded through:

a) Interbank Fund Transfer (IBFT) using any ADCs

b) Cash in at EMI branches/agent locations/ATMs/bank branches subject to biometric
verification.

III. EMIs shall redeem e-money payment instruments at par value at any time upon the
request of e-money holder without any charges. Further, EMI shall ensure to conduct
biometric verification of the e-money holder, in case of redemption of e-money in cash.

16. SAFEGUARDING CUSTOMERS’ FUNDS

I. EMI shall not co-mingle its company funds with the funds received from
users/customers. For this purpose, EMI shall place the funds received in exchange for
e-money payment instruments in a trust account with a licensed bank (Trustee) that at
least has ‘A’ rating from a credit rating agency.

II. EMIs shall be bound to follow any change regarding establishing alternate fund
safeguarding mechanism as and when advised by SBP.

III. EMIs shall not place more than 50% of e-money balances with one Trustee in case its
outstanding e-money balance exceeds PKR 300 Million.

IV. In case the rating of the trustee is downgraded, then it shall change the trustee within
three months and inform SBP accordingly. Further, EMIs shall inform SBP in advance
of any material change in funds safeguarding measures i.e. change of trustees etc.
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V. EMIs shall submit for SBP’s information a copy of their trust account agreement with
the trustees.

VI. The nature of trust account to be maintained with trustee shall be determined by the
EMI, however, EMIs shall not be allowed to pass on any associated cost of Trust
Account maintenance to EMI customers.

VII. EMIs are allowed to invest 75% of the last three months’ daily average outstanding e-
money balance in government securities with maturity up to one year. In this regard,
EMIs shall calculate the average outstanding e-money balance from the date of
commencement of pilot operations, on an ongoing basis. For example, if an EMI starts
its Pilot operations on 1st July then the EMI after three months i.e. on the first day of
October shall be able to invest 75% of average outstanding e-money balance during the
period July-September.

17. USE OF AGENTS

I. EMI intending to engage agents for providing payment services to EMI’s customers
shall solicit prior one-time approval in writing from SBP.

II. EMI can use the existing Branchless Banking agent network.

III. EMI shall develop a central policy on the Agent Network Management (ANM) duly
approved by its Board. This policy, at the minimum, should contain agent on-boarding
procedures, agent risk management, agent training and development, service level
agreement, roles and responsibilities of agents, agent code of conduct, quality of service
parameters, fraud prevention and supervision, agent liquidity management, consumer
protection and complaint handling, penalty structure, agent monitoring and agent
termination etc.

IV. EMI shall ensure that agents acting on its behalf do not represent themselves as an EMI
or an employee/staff of the EMI.

V. In addition to other powers conferred on SBP, the SBP shall have powers to:

a) Advise EMI for such data or information as deemed appropriate.

b) Request for any information from any agent directly or through an EMI at any time
as SBP may deem necessary.
c) Conduct inspection of the books and premises of the agent as and when deemed
necessary.
d) Direct an EMI to instruct its agent(s) to take such action or desist from such conduct
as SBP may deem necessary.
e) Direct an EMI to terminate agreement with agent(s);
f) Direct an EMI to take such action or measures against or on behalf of the agent as
SBP may find appropriate.
g) Direct an EMI to take such remedial action arising from the conduct of an agent as
it may deem fit.

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VI. EMI shall publish an updated list of all agents and locations on their websites for
information of the general public. EMI shall assign transaction limits to agents on the
basis of potential business volume to be generated by the agents and risk category of
each agent.

VII. EMI shall not issue e-money payment instruments through its agents.

VIII. EMI shall sign SLA/ Agency Agreement with agents detailing the functions/activities
to be performed by agent, roles, responsibilities and obligations of the EMI and its
agents.

IX. Fees/revenue sharing structure, responsibility for bearing up-front/ running costs of
EMI operations shall be defined in the agreement.

X. The agent(s) shall ensure secrecy of customer data/information and all transactions in
accordance with all applicable laws, rules and regulations and safe-keeping of all
relevant records, data and documents /files.

18. INTEROPERABILITY
I. SBP will mandate interoperability of applicant EMIs with other EMIs, banks/MFBs,
PSOs/PSPs at an appropriate time to be decided by SBP using a designated or its own
payment gateway/scheme.

II. SBP at its discretion may provide Raast membership and connectivity to those EMIs
who have been granted go live/commercial launch approval to function as an EMI.

III. For this purpose, EMIs shall have open systems enabling them to become interoperable
with other payment systems in Pakistan as and when advised by SBP. However, EMIs
are encouraged to enter into interoperability arrangements with other EMIs,
banks/MFBs and PSOs/PSPs right from their inception.

19. OUTSOURCING OF FUNCTION(S) TO THE THIRD PARTY (IES)

I. EMIs shall not outsource, outside Pakistan, any of its function(s) without prior written
approval from SBP.

II. EMIs intending to embrace cloud based services are advised to comply with BPRD’s
Circular No. 01 of 2023 dated January 16, 2023 regarding “Framework on Outsourcing
to Cloud Service Providers”.

III. EMIs shall ensure that any outsourcing arrangement with third parties and group
companies shall be at arm’s length.

IV. For the purpose of outsourcing, the EMI shall develop and enforce their board approved
policies. For developing their outsourcing policies, EMIs, keeping in view the nature,
size, complexity and organizational level risks, shall refer to the Framework for
Outsourcing Risk Management issued by SBP from time to time in order to develop
their policies.
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V. Outsourcing of any activity/process or systems shall not absolve the EMI from its
primary responsibility of security, integrity and confidentiality of data/information.

20. COMPLAINT HANDLING MECHANISM

I. As the EMIs shall be dealing with a large number of first time customers with low
financial literacy level therefore, EMIs need to ensure that adequate measures for
customer protection, awareness and dispute resolution are in place.

II. EMIs shall have appropriate customer protection against risks of fraud, loss of privacy
and even loss of service.

III. EMI, shall have board approved dispute resolution mechanism to settle all disputes
between EMI and e-money payment instrument holders.

IV. EMI shall have a proper and separate complaint management mechanism for resolution
of the customer complaints against the agent(s).

V. EMIs shall have customer awareness programs that at a minimum should cover use of
e-money payment instruments, protection against frauds and rights and obligations to
use EMIs services etc.

21. SECURITY AND CONFIDENTIALITY

I. For fidelity and secrecy, the EMI shall ensure that personal information of customers
obtained during the course of operations is used, disclosed, retained and protected as
committed or agreed.

II. EMIs shall ensure the Security, Integrity, Confidentiality and Availability of data and
services by adopting prevailing international standard(s) as well as those prescribed by
SBP from time to time.

III. EMIs are required to comply with the relevant Section(s) of PS&EFT Act, 2007 relating
to Secrecy and Privacy of Information.

IV. EMIs shall get their systems audited from SBP’s approved Panel of Auditors before
commencement of their pilot operations and thereafter on annual basis.

V. All security breaches should immediately be reported to relevant stakeholders including

PSP&OD, SBP and detailed report shall be submitted within fifteen days as per
Annexure “F”.

22. AML/CFT REQUIREMENTS

I. EMI shall deploy the automated transaction monitoring system to proactively monitor
the transactions for avoiding the ML/TF risks.

II. EMI shall adopt risk based approach to mitigate the ML/TF activities. In this regard,
EMI shall comply with all the AML/CFT Laws, Guidelines, regulations issued by SBP
or any other authority from time to time.
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III. EMI shall identify and assess the ML/TF risks that may arise in relation to the
development of new products and new business practices, including new delivery
mechanisms and the use of new or developing technologies for both new and pre-
existing products. EMI shall conduct risk assessments prior to the launch or use of new
products, practices and technologies; and take appropriate measures to manage and
mitigate the risks.

23. RISK MANAGEMENT MECHANISM

I. EMI must have overall risk management including enterprise risk management policies
and procedures duly approved by the Board. Where applicable, EMI shall ensure
compliance with SBP’s Enterprise Technology Governance & Risk Management
Framework for Financial Institutions as issued vide BPRD Circular No. 05 of 2017
dated May 30, 2017 and as amended from time to time.

II. Senior management of the EMI shall ensure the implementation of the aforementioned
framework at Para 23.I above and Board of Directors shall review the implementation
status as per the frequency defined by the EMI itself.

III. EMI must have approved policies and procedures for information, cyber and overall
systems security as well as necessary internal controls in place. Further, they must take
proactive measures to detect and prevent fraudulent transactions and unwanted
intrusions.

IV. EMI must have BCP and DRP in line with international best practice. BCP and DRP
drills must be conducted half-yearly in first two years of commencement of pilot
operations and quarterly thereafter and results of the drills be recorded in a formal
report.

24. OVERSIGHT & SUPERVISION OF EMIS

I. REPORTING REQUIREMENTS FOR EMIS

a) EMI shall submit the annual audited financial statements to SBP within three months
of the financial year-end.
b) EMIs shall submit Capital Returns to SBP on quarterly basis.
c) EMIs shall calculate the ongoing capital after three months from the commencement of
pilot operations. For calculating on-going capital, average daily outstanding e-money
over the preceding three months shall be taken into account.
d) EMI shall submit the following information as per the frequency set by SBP from time
to time:

i. The number of e-money payment instruments issued;

ii. The volume and value of e-money transactions;
iii. Balances maintained in Trust Accounts;
iv. Intimation about opening of trust accounts;
v. Incidents of fraud, theft and robbery including at its agents;

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vi. Service interruptions and information security and cyber incidences/breaches as

per Annexure F on monthly basis. However, EMI are advised to report any major
information security and cyber incidences/breaches within 48 hours to PSP&OD.

e) Moreover, EMIs are also advised to instruct their trustee for submitting Trust Account
information with SBP as and when required.
f) The SBP may at any time request for any other information from EMI, any of its agents
and its associated bank.

II. RECORD RETENTION

a) EMIs shall maintain all necessary records for at least 10 years or as required by the
relevant laws. However, for records of call center data and call recordings shall be
retained for a period of one year. Further, these records may be required to maintain in
a secure manner.
b) EMIs shall keep all records obtained through CDD measures, business correspondence,
and results of any analysis undertaken, following the termination of the business
relationship as required by the relevant laws.
c) EMIs shall ensure that transaction records should be sufficient to permit reconstruction
of individual transactions so as to provide, if necessary, evidence for prosecution of
criminal activity.
d) EMI shall retain those records for longer period of time where
transactions/customers/accounts involve litigation or it is required by court or other
competent authority.

III. POWER TO CONDUCT ONSITE INSPECTION OF EMIS

a) SBP itself or through its assigned auditor may conduct regular and special on-site
inspections of EMIs. For the same, SBP or any of its assigned auditor, shall be provided
full, timely and unrestricted access to systems (including those outsourced or hosted
with third parties), documents, reports, records and officials of EMIs.
b) In case EMI does not comply with any of the provisions of these Regulations, SBP may
take any appropriate action under PS&EFT Act 2007, which may include invoking
penal or any other regulatory action.

25. EXIT PLAN

I. The EMIs shall submit their exit plan at the time of applying for an In-Principle
approval which may include but not limited to the following:

a) The exit plan may cover a minimum time horizon of the business plan addressing
different stress scenarios as well as EMI’s likely responses.
b) The envisaged exit plan may include product portfolio exit, liquidation of the EMI
or sale/transfer of shares to a third party. All such options shall be explored with
adequate risk assessments.
c) The overall exit time estimates shall also be indicated in the plan.

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d) The exit plan shall also provide for adequate protection of customers and relevant
stakeholders as well as responsible and effective communications with the
concerned stakeholders.
e) The exit plan shall remain dynamic to reflect current circumstances and EMIs shall
review and update the same regularly.
f) The EMIs shall establish alerts or thresholds, which may lead to an evaluation and
decision of whether to put in place various contingency measures or to resort to
invoking the exit strategy itself.
g) During the exit period, the EMI shall ensure full discharge of all its connected
obligations and responsibilities to customers, SBP and other stakeholders.
h) The EMI should also submit the exit strategy for the outsourcing arrangements
including the technology outsourcing

II. The EMIs shall ensure to allocate sufficient funds within Pakistan for execution of their
exit plans.

III. The EMIs, currently at any stage of SBP licensing shall within two months of issuance
of these Regulations, shall submit their exit plan to PSP&OD, SBP in light of the
aforementioned Para 25 (I & II).

********

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Annexure A
List of Documents to be provided by EMIs at different stages of Licensing

The EMIs shall submit to SBP the following documents depending on the stage of approval
process. However, keeping in view type of business model, information technology and
security platform, ownership structure etc. the SBP may ask for additional information from
the applicant EMIs as and when required.

Licensing Stages Details of Documents

Address of the EMI’s Head office and Registered office
The name(s) and contact detail(s) of the person(s) in-charge of dealing
with the EMI application.
Certified true copy of:
a) Certificate of Incorporation with SECP
b) Memorandum of Association (MoA)
c) Articles of Association (AoA)
Initiation Stage
Business Plan as per the format attached at Annexure G.
Introduction to the Company including shareholder details
Details of registration and related documents (i.e. Article and
memorandum) of parent/holding company, Associated Companies,
Subsidiaries and other related parties.
List of sponsor shareholders, Directors and CEO. An up-to-date
curriculum vitae and copy of CNICs/passports of Directors and CEO.
Address of the EMI’s Head office and Registered office
The name(s) and contact detail(s) of the person(s) in-charge of dealing
with the EMI application.

Certified true copy of:

a) Certificate of Incorporation with SECP
b) Memorandum of Association (MoA)
c) Articles of Association (AoA)
Evidence of payment of non-refundable application processing fee i.e.
Rupees Two Hundred Thousand (PKR. 200,000/-) deposited in SBP BSC
Karachi Office.
In-Principle Business Plan as per the format attached at Annexure G.
Approval Description of the measures to be taken to safeguard the customers’ funds
in line with Regulations for EMIs. Also provide copy of the draft trust
agreement with trustee(s). The trust agreement at minimum should cover
the following:
• Funds safeguarding arrangements as defined in Para 16 of the
Regulations for EMIs
• Investment policy/arrangements as permitted in the Regulations
• Terms and conditions of the trust account(s) including ownership of
trust funds
• Roles, responsibilities and liabilities of trustee and EMI
• Procedure for reconciliation of e-money and funds in trust account
• Settlement procedure, where applicable etc.

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Details of the internal control mechanisms established to comply with

AML/CFT Regulations and Guidelines issued by SBP from time to time.
Details about outsourcing arrangements by EMI and copy of draft
agreements, where applicable.
List of sponsor shareholders, FPT in the format as given in Annexure –
D, D-1, D-3 and D-5. An up-to-date curriculum vitae and copy of
CNICs/passports of all sponsor shareholders.
FPT of Directors, CEOs and Key Executives in the format as given in
Annexure – D-1, D-2, D-3 and D-5. An up-to-date curriculum vitae and
copy of CNICs/passports of Directors and CEO.
Details of registration and related documents (i.e. Article and
memorandum) of parent/holding company, Associated Companies,
Subsidiaries and other related parties.
Audited financial statements of the company for the last three (3) years,
where applicable.
Technology Roadmap with detailed infrastructure implementation plan
Compliance status of the conditions mentioned in the In-Principle
Approval Letter.
Proof of Security Deposit in the manner as prescribed in Para 11 of the
Regulations for EMIs.
Proof of fulfilment of initial capital requirement in line with Regulations
for EMIs:
(i) An audited financial statement certifying the amount of capital of the
EMI. (ii) Duly attested Form A, 3A and 29 issued by SCP reflecting the
share capital of the EMI
Final Trust Agreement with trustee(s).
Policy on the Agent Network Management (ANM) duly approved by its
Board, in case EMI intends to engage agents for providing payment
services.
Board approved Risk Management Framework that should contain
Approval for Pilot
mapping of the risks identified by the EMI including the type of risks and
Operations
the procedures the applicant will put in place to assess and prevent such
risks in relation to e-money businesses and payment services.
Board approved Dispute Resolution Mechanism. It shall also include a
description of the procedures to monitor, handle and follow up on security
incidents and fraud-related customer complaints.
Board approved Information Security Policy that shall include a detailed
risk assessment of the e-money businesses, the security of the e-money
and payment processes, description of IT systems and security of these
systems etc.
Business continuity arrangements that shall include the details about how
the applicant will deal with significant continuity events and disruptions,
such as the failure of key systems, the loss of key data, the inaccessibility
of the premises etc. and the frequency with which the applicant intends to
test the business continuity and disaster recovery plans.
Compliance status of the conditions mentioned in pilot operation’s
approval letter.
Final Approval External Auditor’s Report on results of the pilot operations conducted by
EMI with stakeholders including the gaps identified and corrective
measures taken by the applicants.

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Proof of fulfilment of initial capital requirement - An audited financial

statement certifying the amount of capital of the EMI.
Clearing and settlement arrangements by EMI.

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Annexure B
Application Format for Initiation Phase
The Director
Payment Systems Policy & Oversight Department
State Bank of Pakistan
Main Building
I.I. Chundrigar Road
Karachi

Dear Sir,
< Covering letter on the company’s original letter head introducing the company, its program
of operations setting out in particular the type of business for which the license is required>

List of Documents/information to be attached with application:

a. Certified true copy of:
1. Certificate of Incorporation with SECP,
2. MOA
3. AOA
b. Business feasibility/plan as per the format attached at Annexure- G
c. List of sponsor shareholders, Directors and CEO along with submission of following
information:
1. In case of Individuals
i. An up-to-date curriculum vitae,
ii. Duly verified copy of CNICs/passports,
iii. 3 recent passport size photos (not older than 3 months)
iv. Certified copies of income tax and wealth tax statements filed during the last
three years
v. In cases where sponsors or sponsor directors are residents of countries where
filing of wealth statement is not a requirement, two certificates of latest personal
net worth and general reputation issued by a reputable chartered account/
international bank(s); or Any other latest authenticated/ verifiable source of net
worth (such as, bank statement(s) or bank guarantee etc.)
2. In case of Legal Entity
i. Last three years audited financial statements, where applicable.
ii. In case audited financials are not available or insufficient, latest authenticated/
verifiable net-worth of the sponsor duly confirmed by a reputable Chartered
Accountancy firm and two certificates of general reputation issued by
international banks of repute; or
iii. Any other latest authenticated/ verifiable source of net worth (such as bank
statement(s) or bank guarantee etc.)
d. Details of list of Associated Companies, Subsidiaries and other related parties.
e. SBP may request the applicant for any further information it requires for the purposes
of considering the application.
f. Address of the EMI’s Head office and Registered office.

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g. The name(s) and contact detail(s) of the person(s) in-charge of dealing with the EMI
application.

Yours faithfully,

( )
President / Chief Executive Officer

Company Seal

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Annexure C
Application Format for In-Principle Stage
The Director
Payment Systems Policy & Oversight Department
State Bank of Pakistan
Main Building
I.I. Chundrigar Road
Karachi

Dear Sir,
< Covering letter on the company’s original letter head introducing the company, its program
of operations setting out in particular the type of business for which the license is required>

List of Documents/information to be attached with application:

a. Certified true copy of:
1. Certificate of Incorporation with SECP,
2. MOA
3. AOA
b. Copy of receipt of PKR Two Hundred Thousand (Rs. 200,000/-) deposited in SBP BSC
Karachi Office as Non-refundable Application Processing Fee.
c. Business feasibility/plan as per the format attached at Annexure- G
d. Description of the measures to be taken to safeguard the customers’ funds in line with
these regulations. Also provide the copy of the trust agreement with trustee (s). The
trust agreement at minimum should cover the following:
1. Funds safeguarding arrangements as defined in Para 16 of the Regulations for EMIs
2. Investment policy/plan/arrangements for trust account as permitted in the
Regulations
3. Terms and conditions of the trust account(s) including ownership of trust funds
4. Roles, responsibilities and liabilities of trustee and EMI
5. Procedure for reconciliation of e-money and funds in trust account Settlement
procedure, where applicable etc.
6. Signed by at least two signatories each from EMI and trust bank.
e. Details of the internal control mechanisms established to comply with AML/CFT
Regulations and Guidelines issued by SBP from time to time.
f. Details about the use of agents and outsourcing arrangements, if any.
g. List of sponsor shareholders, FPT in the format as given in Annexure – D, D-1, D-3
and D-5.
h. Submission of following information of all sponsor shareholders, Directors and CEO:
1. In case of Individuals
i. An up-to-date curriculum vitae,
ii. Duly verified copy of CNICs/passports,
iii. 3 recent passport size photos (not older than 3 months)
iv. Certified copies of income tax and wealth tax statements filed during the last
three years

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v. In cases where sponsors or sponsor directors are residents of countries where

filing of wealth statement is not a requirement, two certificates of latest personal
net worth and general reputation issued by a reputable chartered account/
international bank(s); or Any other latest authenticated/ verifiable source of net
worth (such as, bank statement(s) or bank guarantee etc.)
2. In case of Legal Entity
i. Last three years audited financial statements, where applicable.
ii. In case audited financials are not available or insufficient, latest authenticated/
verifiable net-worth of the sponsor duly confirmed by a reputable Chartered
Accountancy firm and two certificates of general reputation issued by
international banks of repute; or
iii. Any other latest authenticated/ verifiable source of net worth (such as bank
statement(s) or bank guarantee etc.)
i. FPT of Directors, CEOs and Key Executives in the format as given in Annexure – D-
1, D-2, D-3 and D-5.
j. Additional FPT requirements for foreign nationals shall be communicated to applicant
EMI on case to case basis.
k. Details of list of Associated Companies, Subsidiaries and other related parties.
l. SBP may request the applicant for any further information it requires for the purposes
of considering the application.
m. Address of the EMI’s Head office and Registered office.
n. The name(s) and contact detail(s) of the person(s) in-charge of dealing with the EMI
application.

Yours faithfully,

( )
President / Chief Executive Officer
Company Seal

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Annexure D
Performa – Fitness and Proprietary of Sponsor Shareholders

1. Full Name:
2. Father’s Name:
3. Mother’s Name:
4. Spouse’s Name:
5. Date of Birth: 6. Place of Birth
7. Nationality (ies): 8. NTN:
9. CNIC:
10. Passport Number:
11. Recent Residential Address in Full:

12. Permanent Residential Address in Full:

13. Residential Telephone Number (s): 14. Mobile Number:

15. Email Address:

16. If you have changed your name, state previous name and reasons for change:

17. Academic Education

Qualification Name and Address of Degree Date of Completion
Awarding Institution

18. Professional Education

Qualification Name and Address of Date of Completion
Institution/Professional Body

19. Training (s), if any:

20. Existing Employment:

21. Present Designation: 22. Present Department:
23. Official Address:

24. Telephone Number (s): 25. Email:

26. Please provide complete and true particulars of all business(es), including proprietary
concern/partnership firms, companies in which you have been associated as a proprietor,

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partner or a director thereof during the last ten years and the accounts maintained by
them:
Name of the Proprietary Name of Bank and/or NBFIs Account Numbers
Concern/Partnership together with Name of
Firm/Company Branches

27. Position held during the last ten years (along with name and address of
company/institution/body where appointment held, nature of the
company/institution/body and dates of appointment)
Position of shares held in EMI Number of shares held as of
As a Sponsor Shareholder
Own name
In the name of the company
In the name of family member

Other than Sponsor Shareholder

Own name
In the name of the company
In the name of family member

(Signature of concerned official)

********

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Annexure D-1
Questionnaire for Assessing Fit and Proper Test

Please answer the following questions by entering a tick () in the appropriate box. If the
answer of any of these questions is YES and need explanation, then use a separate sheet with
proper reference to the question.

S. No Description Yes No
Have you ever been convicted/involved in any fraud/forgery, financial
1. crime etc., in Pakistan or elsewhere, are subject to any pending
proceedings leading to any conviction?
Are you a dual national? If yes, please specify nationality other than
2.
Pakistani.
Have you ever been associated with any illegal activity concerning
3.
banking business, deposit taking, financial dealing and other business?
Have you ever been subject to any adverse findings or any settlement
in civil/criminal proceedings particularly with regard to investments,
4. financial/business, misconduct, fraud, formation or management of a
corporate body etc. by SBP, other regulators, professional bodies or
government bodies/agencies?
Have you ever contravened any of the requirements and standards of
5. regulatory system or the equivalent standards or requirements of other
regulatory authorities?
Have you ever been involved with a company or firm or other
6. organization that has been refused registration/license to carry out
trade, business etc.?
Have you ever been involved with a company/firm whose
7. registration/license has been revoked or cancelled or which has gone
into liquidation or other similar proceedings?
Have you ever been debarred for being Chief Executive, Chairman,
8. Director or Sponsor Shareholder of a company, especially financial
institutions?
Have you ever been dismissed/ asked to resign/resigned in Pakistan or
9.
elsewhere in order to avoid legal or disciplinary action?
Have you ever resigned from a professional or regulatory body in
10.
Pakistan or elsewhere in order to avoid legal or disciplinary action?
Have you ever been disqualified/ removed by regulators/Government
11.
bodies/ agencies?
Have you ever been in default of payment of dues owed to any
12. financial institution in individual capacity or as proprietary concern or
any partnership firm or in any private unlisted/listed company?
Have you ever been in default of taxes in individual capacity or as
13. proprietary concern or any partnership firm or in any private
listed/unlisted company?
Have you ever been associated as director and/or chief executive with
14. the corporate bodies whose corporate and tax record, including custom
duties, central excise and sales tax has been unsatisfactory?
Have you entered into any agreement with any other person (natural
15.
or legal) which will influence the way in which you exercise your

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voting rights or the way in which you otherwise behave in your

relationship with the authorized entity?
Are you a director on the Board of Directors of any other Financial
16.
Institution(s) or EMI/PSO/PSP?
Are you a Chairman, Chief Executive, Chief Financial Officer, Chief
Internal Auditor, Research Analyst or Trader (by whatever
17. name/designation called) of an Exchange Company (firm or sole
proprietorship), member of a Stock Exchange, Corporate Brokerage
House?
Are you owning/controlling any Exchange Company or Corporate
18.
Entity?
Have you been or are you working as consultant or adviser of
19. EMI/PSO/PSP or any related business in which you intend to become
a director?
20. Are you employee of an EMI/PSO/PSP?
Are you employee of a company/entity/organization where sponsor
21.
shareholders of EMI have substantial interest?
Are you a member/office bearer of any political party or member of
22.
Senate/National/Provincial Assembly/Local Body?
Are you directly or indirectly associated with designated/proscribed
23. entities and/or persons under United Nations Security Council
Resolution or Anti-Terrorism Act 1997?
24. If independent director, have you enclosed declaration in this behalf?
Any other information that is relevant for the purpose of SBP and needs to be
25.
mentioned?

Signature: ------------------

Name: ----------------------

Position: --------------------

Date: ------------------------

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Annexure D-2
Performa – Fitness and Proprietary of Key Executives/Directors/CEOs

1. Position and grade held by the Executive:

2. Date of assumption of current position (dd /mm/ yyyy):

Full Name:
Father’s Name:
Date of Birth Place of Birth (City and Country):

Nationality: NTN:
CNIC Number: Email Address:
Telephone Number (s): Mobile Number (s):

Academic Qualification:
Qualification Name and Address of Degree Date of Completion
Awarding Institution

Professional Qualification
Qualification Name and Address of Date of Completion
Institution/Professional Body

Training (s), if any:

Previous Employment (s)- date wise:

Designation: Department:
Official address:
Telephone Number (s):
Has he/she ever been convicted of any offence? Yes □ No □
If yes, mention the nature of offence and penalty imposed:

Has he/she ever been censured or penalized by any financial regulator (local or foreign)?
Yes □ No □
If yes, reasons for adverse findings and amount of penalty imposed:

Has he/she ever been dismissed from employment? Yes □ No □

If yes, name of the employer and reasons for dismissal:

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Annexure D-3
State Bank of Pakistan
Payment Systems Policy & Oversight Department

Affidavit
(On Non-Judicial Stamp Paper)

I (the deponent), ________________ son/daughter/wife of _______________________ adult,

resident of
_______________________________________________________________________
and holding CNIC/Passport No. ______________________________ do hereby state on
oath/solemn affirmation as under:

a. that the deponent hereby confirms that the statement made and the information supplied in
the attached questionnaire at Annexure D-1 and Annexure D-2 and the answers thereof are
correct and that there are no other facts that are relevant for “Fit and Proper Test”

b. that the deponent undertakes that the State Bank of Pakistan may seek additional information
from any third party as it deems necessary in view of assessing “Fit and Proper Test”

c. that the deponent undertakes to bring to the attention of the State Bank of Pakistan any matter
which may potentially affect my status as being someone fit and proper as and when it crops
up; and

d. that whatever is stated above is correct to the best of my knowledge and belief and nothing
has been concealed there from.

DEPONENT

The Deponent is identified by me

Signature________________

ADVOCATE (Name and Seal)

Stated on oath/solemnly affirmed before me on this ______ day of _____________ at

______________ by the Deponent above named who is identified to me by
________________, Advocate, who is known to me personally.

Signature_______________________________
OATH COMMISSIONER FOR TAKING AFFIDAVIT
(Name and Seal)

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Annexure D-4
Assessment of Fitness and Propriety

The fitness & propriety of Sponsor Shareholders(s), Director(s), CEO and Key Executives will
be assessed on the following broad elements:

I. Integrity, Honesty and Reputation

Sponsor Shareholders(s) of EMIs and any person applying to be appointed as Director,
CEO and Key Executives should fulfill the following criteria:
a) Has not been convicted, involved in any fraud and/or forgery, financial crime etc.,
in Pakistan or elsewhere, or is not being subject to any pending proceedings that
may lead to such a conviction;
b) Has not been subject to any adverse findings or any settlement in civil and, or
criminal proceedings particularly with regard to investments, financial matters,
business, misconduct, fraud, formation or management of a corporate body etc. by
SBP, government bodies or agencies;
c) Has not contravened any of the requirements and standards of SBP or the equivalent
standards, requirements of other regulatory authorities (outside Pakistan as well),
professional bodies or government bodies or agencies;
d) Has not been involved with (management or conduct of the affairs of) a company,
firm or any other organization that has been refused registration and, or license to
carry out trade, business etc.;
e) Has not been involved with (management or conduct of the affairs of) a company,
firm whose registration and, or license has been revoked or cancelled or gone into
liquidation or other similar proceedings due to mismanagement of affairs, financial
misconduct or malpractices;
f) Has not been debarred for being Chief Executive, Chairman, Director, Sponsor
Shareholder or Key Executive of a company, firm or in similar capacity.
II. Track Record
a) The Director/CEO/Key Executives must have an impeccable track record in the
companies served either in the capacity of an employee or Director/Chief Executive
or as Chairman;
b) The Director/CEO/Key Executives have not been dismissed from employment or
have not been removed or forced to resign by any regulator or government body or
court order, in the capacity of employee, director, chairman or key executive of the
company/firm or any other position of trust.

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III. Solvency & Financial Integrity

a) Has not been associated with any illegal activity concerning banking business,
deposit taking, financial dealing and other business;
b) Has not been in default of payment of dues owed to any financial institution and/ or
default in payment of any taxes in individual capacity or as proprietary concern or
any partnership firm or in any private unlisted, listed company;
c) Has not been associated as director and/or chief executive with the corporate bodies
who have defaulted in payment of Government duties/taxes etc.;
d) The Sponsor Shareholder(s) has/have sufficient means to discharge his/her financial
obligations, if any.
IV. Qualification & Experience This para shall apply separately for Directors, CEO and
other Key Executives of EMIs as under:
a) BOD
i. Must have management or business experience preferably pertaining to
payment and settlements systems of at least three (3) years at senior level in an
active capacity;
ii. Minimum qualification for a person to be appointed as Director on the Board of
Directors is graduation.
b) CEO
i. Must be having at least five (5) years of experience at senior level. Preference
must be given to a person having the said experience in payment and settlement
systems;
ii. Must possess expertise and skill set to undertake responsibilities of the position
effectively and prudently;
iii. Should have minimum qualification of graduation or equivalent, preferably
relevant experience in information technology, banking, finance, economics,
business administration, commerce or relevant fields.
V. Conflict of Interest
a) The CEO will not be the Chairman of the Board of Directors of the same EMI.
b) The Directors on the Board should avoid conflict of interest in their activities with,
and commitments to, other organizations;
c) Directors and CEO should not be a Director/CEO of any other EMI/PSO/PSP.
d) EMIs shall not have as a director, President/CEO or key executive who is holding
any public office (by whatever designation) or office of any political party, or is a
member of Senate, National Assembly, Provincial Assembly or Local bodies.
VI. Others
a) Not more than 50% directors of the same family are permitted to be on the Board
of an EMI;
b) No member of Senate, National/ Provincial Assembly, Local bodies shall be
appointed/ recommended for appointment as Member of Board of Directors and/or
Chief Executive Officer/Key Executive of any EMI.

********

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Annexure D-5
DECLARATION BY THE PROPOSING EMI

(To be signed either by the President/Chief Executive Officer, Head of Human

Resources or the Company Secretary of the incorporated EMI)

After in-depth self-assessment of Mr./Ms.______________________ for the proposed

position _______________,I, _______________________ on behalf of (name of proposing
("the proposing EMI") declare that:

a) The EMI has satisfied itself that citizenship of the proposed appointee has been verified
from National Database and Registration Authority and has been submitted to State Bank
of Pakistan along with the FPT documents. □
OR
In case the proposed appointee is a foreign national, the EMI has satisfied itself that the □
citizenship of the proposed appointee has been verified from the concerned embassy and
has been submitted to State Bank of Pakistan along with FPT documents.

b) The EMI confirms that the name of proposed appointee is not in the list(s) of □
designated/proscribed individuals and entities under United Nations Security Council
Resolution or Anti-Terrorism Act 1997.

c) The EMI confirms that the proposed appointee is not directly or indirectly associated with □
designated/proscribed entities and/or persons under United Nations Security Council
Resolution or Anti-Terrorism Act 1997 and other applicable laws, rules and regulations.

Dated this day of

Name: Signature:

Position/Designation:

For and on behalf of (name of EMI):

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Annexure E
Capital Resources

I. Initial capital shall mean the following, namely:

a) Paid-up share capital, including balance in share premium account

b) Reserves established out of distributable profit
c) Credit balance in the Profit & Loss account
d) Any other item as may be prescribed by SBP from time to time

II. Ongoing Capital (own funds) shall include the items mentioned above plus the following:

a) Non-redeemable preference shares and subordinated debt

b) Revaluation reserve arising on listed shares, government securities, and land /
building valued by evaluators on the Pakistan Banks Association (PBA) approved
panel, and supported by auditor certificate.

III. Following items shall be deducted from the sum of items listed in para I and II above:

a) Own shares held by the EMI

b) Lending to, and investment in debt or equity securities of, subsidiaries, associated
companies, undertaking and as defined in the Companies Act, 2017 and as amended
from time to time
c) Debit balance in profit and loss account
d) Deficit on revaluation of assets
e) Intangible assets excluding such software, as may be approved by SBP, and which
are solely and exclusively being used by EMI for carrying out its principal
operations

Provided that not less than 50% of the initial capital must be subscribed and paid up in cash.

Provided further that any share capital issued and paid up in form of consideration other
than cash, such consideration must be in the following form and valued in accordance with
methodology prescribed here under:

i. Debt and equity securities: only listed equity securities are eligible and shall be
valued for this purpose based on the value derived by sixty (60) trading days
averaging of daily weighted average rate published in the Pakistan Stock Market
quotation.
ii. Government Securities of any description, shall be valued at a PKRV rate (Reuters)
of a preceding quarter.
iii. Land/Property on cost or based on valuation carried by the independent evaluators
listed on the panel of evaluators maintained by PBA, and supported by auditor
certificate.

********

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Annexure F

Incident Details of Information Security Breaches

(Suspected and/or Compromised) on Monthly Basis

Source of Reasons for Value of

Sr. Nature of Remarks, if
Discovery of Incidents Maximum
No. Incident any
Breach Occurred Exposure

********

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Annexure G
Structure of Business Plan

Business Plan of EMIs shall at least cover the following components:

1. Strategic Plan

• Mission, vision and objectives of the EMI

• Market analysis:
o Market overview, total size, and growth potential
o Market trends and market segments
o Positioning (what needs of the target segments will be met)
• Projected market share for the next 5 years
• Success factors (e.g., agent network, product design, shareholders’ commitment,
partnerships, technology and infrastructure)
• Analysis of strengths, weaknesses, opportunities and threats (SWOT analysis)
2. Operational Plan

• Step by step description of the e-money businesses and payment services to be

offered by EMIs – the description shall include flow diagrams of payment type,
payment transmission method, clearing and settlement mechanisms etc.
• Draft contracts including Non-Disclosure Agreement (NDA) with all parties
involved in e-money and payment services etc. including copy of agreement with
e-money users
• Details about the use of agents that shall include the terms of engagement, agents’
selection policy, their monitoring procedures and IT systems/infrastructure that will
be used by EMI’s agents to perform their activities etc.
• Implementation roadmap (timelines)
• Marketing plan
• Details of ancillary services (if any)
• Description of outsourcing arrangements (if any)
• Governance, organizational structure and staffing (existing as well as for the next
three years)
• Systems, controls, and risk management
• Comprehensive Complaint Resolution Mechanism (with defined turnaround time,
rights, obligations and responsibilities of all concerned parties)

3. Financial Projections

• Initial capital, investment and capital injection plan, source of funds (Specify how
the funding will be arranged)
• Funding Plan to comply with the regulatory capital requirements.
• Amounts proposed to be subscribed by each sponsor.
• Personal net worth of each sponsor, not being lesser than the amount to be subscribed
by them personally.
• Basic assumptions (e.g. inflation rate, cost of funds, GDP growth etc.)
• Forecasted revenues, capital expenditures, operating expenses, profit/loss
• Key financial performance indicators like ROE: Return on Equity is net income as
% of equity, ROA: Return on Assets is net income as % of assets, CAPEX ratio:

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Capital expenditure (CAPEX) as % of gross revenue, OPEX ratio: Operating

expenses (OPEX) as % of gross revenue.
• Projected financial statements.

*****

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Annexure H
Format of undertaking to be submitted by the Sponsors of EMI Applicant

(To be stamped as an Undertaking in accordance with the Stamp Law in force)

The Director
Payment Systems Policy & Oversight
Department
State Bank of Pakistan
Main Building
I.I Chundrigar Road
Karachi

Dear Sir,

We____________________________, incorporated/constituted under the

___________________________ and having Registered Office at
_______________________ (hereinafter referred to as “EMI applicant”) hereby execute this
Undertaking in favor of the State Bank of Pakistan (hereinafter referred to as the “the Bank”).

Whereas the EMI is engaged in e-money business as defined in the Regulations for EMIs as
amended from time to time, and whereas the EMI has made an application in writing to the
Bank for grant of EMI license.

And whereas the EMI has made an application in writing to the Bank for EMI license and
whereas the Bank has accepted EMI application provided the EMI shall execute an undertaking
in its favour to be bound by the Regulations for EMIs as amended from time to time and also
by such circulars, orders, notifications, instructions, press releases etc. as may be issued by the
Bank in this behalf from time to time.

In consideration of the Bank having agreed to grant In-Principle Approval, the applicant EMI
unconditionally and irrevocably undertakes and agrees as follows:

• EMI agrees to maintain the Capital requirements as per the requirements prescribed
in the Regulations for EMIs as amended from time to time and any other
instructions on the subject from time to time.
• EMI shall maintain at all times, at least ten percent (10%) of the required capital or
any other amount prescribed by SBP from time to time. Five percent (5%) of the
security deposit will be kept in a non-remunerative current account with the SBP
Banking Service Corporation and five percent (5%) in the form of Government
securities to be kept under lien at SBP BSC.
• The EMI agrees to reinvest the securities after maturity of the particular security in
a timely manner.
• SBP shall have authority to debit the current account and SGLA as and when
needed.
• The Pilot Operations would last for minimum 60 days and maximum 180 days and
shall consist of limited scale live operations as prescribed by the Bank. EMI agrees

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to demonstrate the scope of activities/transactions conducted during the Pilot

Operations.
• EMI agrees to finalize the Trust agreement for safeguarding customers’ funds as
required under para 16 of the Regulations. The final agreement shall be submitted
to the Bank before initiation of Pilot Operations.
• EMI undertakes to furnish such information/data as the Bank may desire in respect
of its transactions and overall business operations during the Pilot run.
• EMI shall not be allowed to invest 75% of the last three months’ daily average
outstanding e-money balance during Pilot Operations in government securities.
• EMI agrees that any change in the governance structure shall be submitted to SBP
in line with the Regulations of EMIs.
• EMI shall abide by and comply with the Regulations for EMIs as amended from
time to time and also such circulars, orders, notifications, press releases,
instructions etc. as may be issued by the Bank in this behalf (hereinafter collectively
referred to as “The Regulations”).
• The Bank shall have the right at all times to inspect and supervise all computer
systems including software, telecommunication network and other equipment’s
both at the Primary Site and the Disaster Recovery Site. The EMI agrees to set right
deficiencies pointed out by the Bank forthwith and take into consideration
suggestions of the Bank.
• The EMI agrees that the liabilities, responsibilities / obligations, if any, arising
during its Operations shall rest solely on the EMI applicant.
• The EMI agrees that the Bank reserves the right to revoke license/approval for In-
Principle, Pilot Operations and commercial operations at its discretion for any
reason whatsoever.
• SBP reserves the right to suspend/revoke the Approval at any stage, if the applicant
EMI fails to comply with the conditions of SBP Approval(s) in a timely manner.
• License to commence commercial operations shall be granted subject to satisfactory
completion of pilot operations and fulfilment of all SBP’s requirements.
• Our signatory/ies, as under, have the requisite power of attorney / authority (copy
enclosed), issued by the relevant and competent authority in our institution to
execute such agreements binding our institution thereto.

Yours faithfully

( )

Authorized Official
Company Seal
Two Witness (Name, CNIC and
signature):

Date:

Place:

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 Regulations for Electronic Money Institutions

Annexure I
SOPs for Electronic Money Institutions (EMIs) for Account Opening and its
Maintenance with SBP BSC

1. Accounting Opening Procedure

1.1 EMIs, after receiving In-Principle approval, will request SBP BSC Karachi Office
electronically at [email protected] and [email protected] under copy to
PSP&OD at [email protected] for opening of Accounts (Current and SGLA) for
maintaining Security Deposit as required under Regulations for EMIs.
1.2 SBP BSC Karachi Office will provide account opening forms to EMIs along with the
list of required documents via email in a timely manner.
1.3 EMIs will fill the account opening forms for Current Account and SGLA and submit
the same to SBP BSC Karachi Office along-with the following documents attested by
company secretary:
a. Notarized CNIC copy of CEO/Acting CEO of EMI;
b. Account maintenance certificate;
c. Certified true copy of Certificate of Incorporation;
d. Copy of the Memorandum and Articles of Association duly certified by
Chairman/ Secretary / BOD;
e. Certified true copy of Certificate of SECP that Company is entitled to
commence business (In case of private limited company, this document is not
required);
f. Certified true copy Form-29;
g. Certified copy of PSP&OD’s In-Principle approval to operate as EMI;
h. Duly attested three specimen signature cards of the authorized officer(s) of EMI
on Bank’s specimen signature cards for any correspondence with the Bank;
i. Undertaking in Form BKG 121;
j. List of authorized signatories duly approved by their Board;
k. Indemnity form (for SGLA only);
l. Power of attorney for operation of SGLAs;
m. Any other document required by SBP BSC.
1.4 SBP BSC Karachi Office, after ensuring that required documents (as mentioned
above) have been submitted by EMIs, signatures have been verified, will open SGLA
and Current Account and inform respective EMIs through email under
intimation/copy to PSP&OD. However, in case of SGLA, SBP BSC Karachi Office
shall take approval before account opening from Domestic Market & Monetary
Management Department (DMMD) as per existing process.
1.5 All debit transactions in SGLAs and current accounts shall only be allowed upon
PSP&OD’s written advice. However, payment of coupon/mark-up/profit accrued for
investment in Government Securities will be directly credited in respective /EMI’s
bank account furnished during the account opening process.

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 Regulations for Electronic Money Institutions

2. Account Maintenance
2.1. Current Account
2.1.1 EMIs will send the Cheque/Pay Order/Demand Draft (five percent of required
capital or as prescribed by PSP&OD SBP) to Chief Manager Karachi Office
drawn in favor of their account maintained at SBP titled “SBP Banking Services
Corporation, Karachi Office”.
2.1.2 EMIs will ensure that the Cheque/Pay Order/Demand Draft amount is five percent
of the initial capital as per Clause 10 (III) of the Regulations for EMIs or any other
amount as allowed by SBP in their In-Principle/pilot operations’ approval letter.
2.1.3 SBP BSC Karachi Office, after realization of payment instrument, will inform the
concerned EMI through email under intimation/copy to PSP&OD.
2.1.4 EMIs shall provide proof of maintaining security deposit in their current account
with SBP BSC Karachi Office in the manner as defined in the Regulations for
EMIs to PSP&OD.

2.2. SGLA Account

2.2.1 EMIs through their bank will invest five percent of the required capital as per
Clause 10 (III) of the Regulations for EMIs or any other amount as allowed by
SBP in their In-Principle/pilot operations’ approval letter in Government
Securities.
2.2.2 After execution of the requisite entries in SGLA maintained with SBP BSC
regarding investment in Government Securities, SBP BSC will inform respective
EMI through e-mail under intimation /copy to PSP&OD.
2.2.3 EMIs after investment will provide necessary investment details to PSP&OD, in
writing on their letter head through email.
2.2.4 PSP&OD, at its end, will confirm that the applicant EMI has invested the required
amount in Government securities.
2.2.5 Upon maturity of the investment in Government Securities, EMIs through their
bank shall reinvest the security deposit in Government Securities to meet Security
deposit requirement at all times as mentioned in the Regulations for EMIs under
intimation to PSP&OD.

2.3. Reinvestment Procedure:

2.3.1 EMIs will finalize an investment deal through their respective bank(s) and send
the request along with details of the new investment deal to SBP BSC through
email under intimation/copy to PSP&OD, to make the requisite entries, well
before the maturity of their existing investment.
2.3.2 EMIs and relevant banks being buyers and sellers of securities shall both send
request letters mentioning settlement date to SBP BSC not later than 1:30 pm for
deal execution.
2.3.3 EMIs shall issue settlement request to SBP BSC for reinvestment on maturity date
of their investment.
2.3.4 SBP BSC will execute the entries on maturity date of investment so that
the requirement of maintaining security deposit at all times under Regulations for
EMIs shall be fulfilled.

State Bank of Pakistan Payment Systems Policy & Oversight Department Page 50 of 52
 Regulations for Electronic Money Institutions

2.3.5 Once the entries are executed, SBP BSC shall inform respective EMI through
email under intimation/copy to PSP&OD at [email protected].
2.3.6 SBP will take strict penal action under the PS&EFT Act and Regulations for EMIs
in case of failure of an EMI to timely reinvest in government securities or in case
of violation of the Regulations for EMIs.

3. Restrictions on Accounts
3.1 SGLA and current accounts should be opened in the specific category of
“Electronic Money Institutions” keeping in view the request received from EMIs.
3.2 Cheque Books shall not be issued against these accounts.
3.2 As these accounts are being opened on the instructions of PSP&OD therefore any
debit to these accounts shall be subject to PSP&OD’s prior approval.

*****

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 Regulations for Electronic Money Institutions

Annexure J
Indicative List of Documents to Assess the Source of Income for EMI customers

Self-employed/ Non-Salaried / Employed/ Salaried Persons

Unemployed Persons
Source of Income/ Funds* (Any one of the Source of Income/ Funds* (Any one of the
following documents following documents should suffice)
should suffice)
• Receipt of Payment against the Work, OR • Latest Salary Slip, OR
• Account Statement, OR • Salary Certificate, OR
• Particulars of Income/ Funds Providers (e.g. • Payment Slips/ Record, OR
Family Members/ Guardian/ Stipends/ • Account Statement, OR
Social Benefits etc.), OR • Tax Statement/ Return/ Certificate, OR
• Tax Statement/ Return/ Certificate, OR • For Retired Persons, an evidence of Terminal
• Any other Document evidencing Source of Benefits/ Pension Book etc., OR
Income • Any other Document evidencing Source of
Income

As an alternate to above, customer can provide the following as source of income/ funds:
• Inheritance, OR
• Agriculture income, OR
• Investment in securities, bonds, shares, etc., OR
• Investment in property, OR
• Rental Income, OR
• Interest income

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State Bank of Pakistan Payment Systems Policy & Oversight Department Page 52 of 52