State Bank of Pakistan (SBP) has directed conventional and microfinance banks to allow cash deposits into merchant accounts by the owners, which are mostly retailers of various goods and services.
As per the revised amendments in ‘Regulations for Digital On-boarding of Merchants,’ Banks/MFBs shall ensure that Merchant Accounts are only used for digital collection of payments against the provision of legitimate goods and services.
The central bank allowed the banks’ customers and Branchless Banking level “0” account holders to top up/cash in their accounts up to Rs. 10,000/- per month through biometrically verified merchants. However, a cash deposit shall only be used for digital payments.
Merchant account holders are allowed to deposit money in their account but the total cash deposit in merchant accounts shall not exceed Rs. 100,000/- per month.
Previously, banks and micro finance banks were not permitted cash deposit transactions in these accounts.
However, Banks/MFBs shall not permit cross border outward remittance transactions from these accounts. Meanwhile, all other instructions on the subject regulations shall remain the same.
The central bank said on Monday that the policy mix appears adequate to address the macroeconomic imbalances and push the economy towards stability as Pakistan’s economy moved progressively along the adjustment path during the first quarter (July-Sep) of this fiscal year (FY20).
The State Bank has also predicted that Pakistan is likely to miss the real GDP growth target of 4 percent for this fiscal year (FY20) mainly due to subdued performance of agricultural and manufacturing sectors.
