SBP Directs Banks to Stop Blocking Accounts Without Legal Basis

Pakistan News Desk June 30, 2026

First Published 2 hours ago

4 Updates by 4 sources

ISLAMABAD – The State Bank of Pakistan (SBP) has directed all commercial banks to cease blocking customer accounts without a valid legal basis, approval from a competent authority, and proper verification.

The new instructions were issued in compliance with an order from the Islamabad High Court (IHC). The SBP submitted a compliance report to Justice Arbab Muhammad Tahir, outlining the measures taken. The central bank has instructed banks to ensure that any action affecting a customer’s account strictly adheres to applicable laws and regulatory procedures.

In a revised circular sent to all banks, the SBP emphasized that financial institutions must avoid imposing unnecessary or precautionary restrictions that could cause financial loss or inconvenience to account holders. Banks are now required to review their existing procedures and develop internal mechanisms and standard operating procedures (SOPs) to ensure full compliance with the new directives. The move is aimed at strengthening customer protection and preventing the misuse of account-blocking powers.

Latest Updates

The State Bank of Pakistan (SBP) has clarified that commercial banks can devise their own internal mechanisms to ensure full implementation of new directives regarding customer account restrictions.

This development follows the submission of a compliance report to the Islamabad High Court. The court, under Justice Arbab Muhammad Tahir, had previously instructed the central bank to establish a mechanism and issue formal instructions to prevent the arbitrary blocking of accounts.

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