Regulatory AlertsPakistan: lending & credit regulation
RegulatedLending regulated by SBP for banks/NBFCs; P2P unregulated; no specific BNPL law
- Lead regulator
- State Bank of Pakistan (SBP)
- Also involved
- SECP (NBFC licensing); NAB (recovery); FBR (tax)
- Core law
- Banking Companies Ordinance 1962; Non-Banking Finance Companies (Establishment and Regulation) Act 1996
- Entry capital
- PKR 5 billion (Bank); PKR 1 billion (NBFC)
- Approval timeline
- 6-12 months for NBFC license; Banks already licensed
- Customer assets
- Segregated accounts required for NBFCs
- Data protection
- PECA 2016; Draft Data Protection Bill pending
- Sandbox
- Yes - SBP Regulatory Sandbox
Consumer and SME lending is strictly regulated for banks and Non-Banking Finance Companies (NBFCs) under SBP oversight. The documents provided focus on prudential standards (Basel III, IFRS 9) rather than licensing frameworks. P2P lending and BNPL lack specific statutory regimes, creating regulatory uncertainty. Microfinance is supervised by SBP's Microfinance Department.
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Consumer lending | LicenceBanking/NBFC License[1][2] Subject to Basel III and IFRS 9 provisioning rules | PKR 5 billion (Bank); PKR 1 billion (NBFC) | 6-12 months | State Bank of Pakistan |
| SME / commercial lending | LicenceBanking/NBFC License[2] Same prudential framework as consumer lending | PKR 5 billion (Bank); PKR 1 billion (NBFC) | 6-12 months | State Bank of Pakistan |
| Microfinance | LicenceMicrofinance Bank/NBFC License Specific SBP Microfinance Department oversight | PKR 500 million (MFB); PKR 1 billion (MFIN) | — | State Bank of Pakistan |
| Buy-now-pay-later | Uncertainverify with regulator No specific BNPL regulation; often treated as consumer credit | — | — | — |
| P2P lending platform | Unregulated No specific P2P lending framework exists in Pakistan | — | — | — |
| Credit bureau / scoring | RegistrationCredit Bureau License Licensed by SBP under Credit Bureaus regulations | PKR 100 million | — | State Bank of Pakistan |
| Debt collection | Uncertainverify with regulator Regulated under general contract law and NAB Act | — | — | — |
New — what changed recently
- 2025-09-24Basel III Revised Instructions — SBP issued revised Standardized Approach instructions for credit risk, effective Sept 2025.[1]
- 2025-09-12IFRS 9 DPD Criteria — Mandated specific Days Past Due criteria for impairment provisioning across all lending portfolios.[2]
- 2025-01-22IFRS 9 Application Instructions — Updated guidelines for retrospective modification accounting for loans modified after Jan 2020.[3]
Market-entry checklist
- 1Secure SBP LicenseApply for NBFC or Bank license with PKR 1bn+ capital depending on tier.
- 2Implement IFRS 9Deploy systems for DPD-based impairment provisioning as per SBP directives.
- 3Adopt Basel IIIAlign credit risk capital calculations with revised Standardized Approach.
- 4Register Credit BureauObtain SBP license to operate as a credit bureau for scoring services.