Pakistan’s central bank releases ‘regulatory sandbox’ guidelines, seeks input for FinTech growth

Pakistan’s central bank releases ‘regulatory sandbox’ guidelines, seeks input for FinTech growth
An undated file photo shows a general view of the State Bank of Pakistan's building in Karachi. (Photo courtesy: social media)
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Updated 08 December 2023
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Pakistan’s central bank releases ‘regulatory sandbox’ guidelines, seeks input for FinTech growth

Pakistan’s central bank releases ‘regulatory sandbox’ guidelines, seeks input for FinTech growth
  • The emergence of high-tech companies for efficient service delivery has posed regulatory challenges for Pakistan
  • The regulatory sandbox approach has also been adopted by other countries to develop final set of rules for startups

ISLAMABAD: The State Bank of Pakistan (SBP) adopted a collaborative approach to developing a regulatory framework for startups and FinTech companies by issuing preliminary guidelines on Friday with an aim to test them against innovative products and business models before adopting the final set of rules.

The SBP’s “regulatory sandbox” approach is designed to provide a controlled environment for innovators to test their products and technologies, making it easier for the regulator to understand their implications for financial stability and consumer protection.

“State Bank of Pakistan has issued draft guidelines on regulatory sandbox for public consultation,” it said in a brief statement.

The SBP added this would allow the regulated entities, such as startups and FinTech firms, to participate in the process of testing new products and their preferred business models within the provided legal framework.

“As envisioned in SBP Vision 2028, the regulatory sandbox will encourage innovation in digital financial services and facilitate the existing and new market participants to build robust digital payments ecosystem in Pakistan,” the central bank explained in its statement.

“Similarly, it will help SBP to issue instructions and regulations for new and innovative FinTech solutions, ultimately resulting in increased financial and digital inclusion in the country,” it added.

The SBP said its initiative would strengthen its engagement with stakeholders in shaping the future of the country’s financial industry.

It invited banks, FinTech firms, industry experts, public and all interested parties to participate in the consultation process.

Pakistani startups, especially in fintech, e-commerce and logistics, have been attracting considerable investment from both domestic sources and international venture capital firms.

This burgeoning ecosystem, fueled by significant government support and a surge in digital adoption among a young, tech-savvy population, is said to be positioning the country as an emerging hub for technological innovation and entrepreneurship.

As the country increasingly depends on high-tech companies for efficient service delivery, it has been encountering various regulatory challenges.

The regulatory sandboxes approach has also been adopted by other countries, including the United Kingdom, Singapore, Australia and Canada etc., among many others.

Each country’s sandbox is tailored to its specific regulatory environment and financial sector needs, though the core idea is to provide a space where new and potentially disruptive financial technologies can be tested safely and without immediately incurring the full burden of financial regulation.


Sweden arms exports rose 18 percent in 2023 with Pakistan among top destinations

Sweden arms exports rose 18 percent in 2023 with Pakistan among top destinations
Updated 04 March 2024
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Sweden arms exports rose 18 percent in 2023 with Pakistan among top destinations

Sweden arms exports rose 18 percent in 2023 with Pakistan among top destinations
  • Sweden has a growing defense industry with Saab making the Gripen fighter jet, the Global Eye surveillance aircraft and anti-tank weapons
  • Top 10 destinations for Swedish arms exports includes the United States, Brazil, Pakistan, the United Kingdom, Germany, India and Norway

STOCKHOLM: Sweden’s arms exports rose 18 percent in 2023 to reach 1.6 billion euros as the Russia-Ukraine war drove a search for weaponry, a government agency said Monday.

Most of the exports went to European Union countries and 39 countries which Sweden cooperates with, the Swedish Inspectorate for Strategic Products (ISP) said in a statement.

Sweden has a growing defense industry with Saab making the Gripen fighter jet, the Global Eye surveillance aircraft and anti-tank weapons.

“The degradation of the security situation and the continuing rearmament in the world means that the Swedish defense industry can expect many orders for a long time,” said ISP director general Carl Johan Wieslander in a statement.

“Swedish military equipment is attracting great interest, particularly in Ukraine,” he added.

Turkiye also benefited from Swedish arms, according to ISP, with exports in 2023 worth four million Kronor (356,000 euros).

In 2019, Stockholm introduced restrictions on arms sales to Ankara in response to Turkiye’s military incursion into Syria.

The embargo was lifted following negotiations between the two countries during Sweden’s NATO accession process.

“The resumption of arms exports to Turkiye clearly shows that Sweden places greater importance to NATO membership than to respecting human rights, democracy and international law,” said the peace and disarmament NGO Svenska Freds in a statement.

“The arms industry wants to present itself as a contributor to freedom and democracy, but Swedish arms companies also export (their products) to undemocratic regimes, countries that violate human rights and international law,” the NGO added.

People in these countries “pay a high price” for flourishing arms industry, it said.

The top 10 destinations for Swedish arms exports are the United States, Brazil, Pakistan, the United Kingdom, Germany, India, Norway, France and the Czech Republic.


Pakistan issues visas to over 100 Indian Hindu pilgrims for visit to Katas Raj temples

Pakistan issues visas to over 100 Indian Hindu pilgrims for visit to Katas Raj temples
Updated 04 March 2024
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Pakistan issues visas to over 100 Indian Hindu pilgrims for visit to Katas Raj temples

Pakistan issues visas to over 100 Indian Hindu pilgrims for visit to Katas Raj temples
  • The 900-year-old Katas Raj temples are one of the holiest sites in South Asia for Hindus
  • Thousands of Indian Sikhs and Hindus come to Pakistan to visit their holy sites annually

ISLAMABAD: The Pakistan High Commission in New Delhi said on Monday it had issued 112 visas to a group of Indian Hindu pilgrims to visit the Katas Raj temples in Pakistan’s eastern Punjab province from March 6 till March 12.

The 900-year-old Katas Raj temples, one of the holiest sites in South Asia for Hindus, form a complex of several temples connected to one another by walkways that surround a pond named Katas that Hindu sacred texts say was created from the teardrops of Shiva as he wandered the Earth inconsolable after the death of his wife Sati.

The complex is located in the village of Katas in Punjab’s Chakwal district, some 110 km (70 miles) south of the capital Islamabad.

“Charge d’Affaires, Mr. Saad Ahmad Warraich, wished the pilgrims a spiritually rewarding yatra and safe journey,” the Pakistani high commission said in a statement.

Under the Pakistan-India Protocol on Visits to Religious Shrines of 1974, each year thousands of Sikh and Hindu pilgrims from India visit Pakistan to attend various religious festivals and occasions.

“The issuance of pilgrimage visas to them is in line with the Government of Pakistan’s efforts for facilitating visits to religious shrines and promoting interfaith harmony,” the high commission added.

Non-Muslims make up only a little over three percent of Pakistan’s more than 241 million population.

In 2021, Pakistan opened the Kartarpur corridor as a visa-free crossing, allowing Indian Sikhs to visit the temple just 4km (2.5 miles) inside Pakistan where Sikhism’s founder Guru Nanak died in 1539.

Many Sikhs see Pakistan as the place where their religion began as Nanak was born in 1469 in a small village near the eastern Pakistani city of Lahore.


Pakistan poll regulator denies Khan-backed party reserved seats in parliament

Pakistan poll regulator denies Khan-backed party reserved seats in parliament
Updated 04 March 2024
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Pakistan poll regulator denies Khan-backed party reserved seats in parliament

Pakistan poll regulator denies Khan-backed party reserved seats in parliament
  • Khan’s PTI party couldn’t contest election under its electoral symbol, a cricket bat, which was denied on technical grounds
  • The PTI subsequently struck an alliance with another party, the Sunni Ittehad Council (SIC), in a bid to secure reserved seats

ISLAMABAD: The Election Commission of Pakistan (ECP) on Monday denied the Sunni Ittehad Council (SIC) party, joined by independent lawmakers loyal to jailed former prime minister Imran Khan, a share of parliamentary seats reserved for women and minorities.

In Pakistan, there are 70 seats reserved for women and non-Muslims in the 336-member National Assembly that are given to political parties on the basis of general seats won by them in national elections.

Khan’s Pakistan Tehreek-e-Insaf (PTI) party couldn’t contest the Feb. 8 election under its iconic electoral symbol, a cricket bat, which was denied over violation of electoral laws of the country.

Consequently, PTI members contested last month’s election as independents and the party later struck an alliance with the SIC in a bid to claim its share of the reserved seats.

“In light of clear provisions of Article 51(6)... SIC is not entitled to claim for the quota for reserved seats for women and non-Muslims due to having non curable legal defects and violation of mandatory provision of submission of party list for reserved seats which is the requirement of law,” the ECP said in its decision.

The verdict came shortly after Shehbaz Sharif, who ousted Khan in a parliamentary no-trust vote in April 2022, took oath as prime minister for a second term.

Khan-backed candidates secured more seats than any other party in the polls, but they were outnumbered by Sharif’s Pakistan Muslim League-Nawaz (PML-N) party after it forged an alliance with ex-foreign minister Bilawal Bhutto-Zardari-led Pakistan Peoples Party (PPP) and other smaller groups.

The PTI said it would challenge the ECP decision in court.

“Article 51 of the Constitution, states that the National Assembly cannot be deemed complete without the allocation of reserved seats for women and minorities, proportionate to each political party’s representation,” it said.

“[An] incomplete National Assembly, devoid of reserved seats for women and minorities, is not mandated to function if 23 PTI-backed members are denied their constitutional rights under a dubious scheme.”

Khan’s PTI claims the election was brazenly rigged to prevent its victory, an allegation denied by the ECP and the caretaker government that oversaw the vote.

Analysts say the ECP, by allotting the remaining reserved seats to other political parties, has made things “controversial” in an already polarized political environment.

“This is a major blow for a party that did win the highest number of National Assembly seats despite its symbol being taken away just before the elections,” Mehmal Sarfraz, a political analyst, told Arab News.

“While the prime minister extends an olive branch to the opposition, such verdicts will lead to an even charged atmosphere inside parliament rather than bringing the temperatures down.”


Experts urge reconciliation to restore credibility, overcome challenges as new Pakistan government sworn in

Experts urge reconciliation to restore credibility, overcome challenges as new Pakistan government sworn in
Updated 04 March 2024
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Experts urge reconciliation to restore credibility, overcome challenges as new Pakistan government sworn in

Experts urge reconciliation to restore credibility, overcome challenges as new Pakistan government sworn in
  • The South Asian country of over 241 million is deeply polarized and facing complex economic and security challenges
  • Analysts believe PM Shehbaz Sharif’s government will be left to face challenges on its own, needs to act ‘wisely’

ISLAMABAD: As Shehbaz Sharif took oath as 23rd prime minister of Pakistan, political, economic, and security experts on Monday urged the incoming Pakistani government to adopt a reconciliatory approach to restore its “credibility” after a controversial vote last month and to overcome political, economic and security challenges facing the country.
Sharif was voted in as prime minister on Sunday, three weeks after the Feb. 8 national election that was marred by a mobile Internet shutdown, arrests and violence in its build-up, and unusually delayed results that sparked accusations that the vote was rigged.
Candidates backed by Khan gained the most seats, but Sharif’s Pakistan Muslim League-Nawaz (PML-N) agreed with former foreign minister Bilawal Bhutto-Zardari-led Pakistan People’s Party (PPP) and other smaller groups to form a coalition government. 
However, the shaky coalition led by Sharif is likely to face fierce opposition from Khan-led Pakistan Tehreek-e-Insaf (PTI) and Sunni Ittehad Council (SIC) parties, along with a myriad of issues facing the South Asian country of more than 241 million.
Analysts have said the biggest challenge for the new government will be restoration of its credibility after the Feb. 8 controversial vote, which would require a “healing touch of reconciliation.”
“The biggest crisis for the new government would be [lack of] credibility following the flawed election of February 8, wherein defying all odds, the PTI emerged as the most popular party,” Mushahid Hussain Syed, a Pakistani politician and political commentator, told Arab News.
“Restoration of credibility requires a healing touch of reconciliation starting with the release of all political prisoners, including Imran Khan.” 
He said Sharif’s six-party rickety coalition was the first “minority government” in the history of Pakistan whose numbers were augmented by the PPP, which supported Sharif but decided not to join the government.
The PPP, which helped Sharif secure majority in Sunday’s election for prime minister, joined the coalition in return for the post of president and few other constitutional positions, but declined to take any posts in Sharif’s cabinet.
Syed said the two other challenges of militancy and the revival of economy required concerted efforts from all political parties. “No person, party, government or institution alone can tackle these challenges, which should be done collectively by all political forces,” he said.
Nasim Zehra, a senior journalist and anchorperson, said national reconciliation was a “critical prerequisite” for the new government to deal with the crises.
“There is unanimity in the country over the issue of economic crisis and we are now seeing that there seems to be a unanimity on the need for a national reconciliation,” she told Arab News.
“The encouraging fact is that the PTI is part of the system, now sitting in the National Assembly and hence, despite its vehement complaints, is part of Pakistan’s current parliament.” 
Zehra said Pakistan could be entering a phase of “genuine political reconciliation,” if the government and its allies wisely handled the matters. 
Ali Salman, executive director of the Islamabad-based economic think tank Policy Research Institute of Market Economy (PRIME), said the new federal government faced three urgent economic challenges: Pakistan remains solvent, tames inflation and spurs economic growth. 
“It needs to secure a long-term IMF program, for managing external accounts is a necessary condition to restore the confidence of international investors,” he told Arab News.
To tame inflation, he said, Pakistan needed to deploy a combination of monetary, fiscal and trade policies. “It should follow a tight monetary policy, cut down wasteful spending, and open up trade with India and Iran,” he said.
To spur economic growth, Salman said, the new government would have to deregulate and lower tax rates to encourage entrepreneurs and investors to expand their businesses.
Another political commentator Benazir Shah said the new government had a “real fight” ahead as there were clear sources of discontent in the country.
“This discontent is stemming from inflation, accusations of election fraud, and the establishment’s continuous meddling in politics, and at a time of increased discontent and anger, a minority — not a majority — government will be taking up office,” she told Arab News.
Shah said the PML-N had been left to face the challenges largely on its own this time, unlike Sharif’s previous tenure when all coalition parties were part of cabinet.
“PML-N is up against two strong opposition parties, PTI and JUI-F, both of whom have considerable street power and then there are its own allies, who could at any given time switch into opposition mode, such as when the budget is tabled,” she said. 
Shah said the second biggest challenge for the new government would be to operate in a system, where the military establishment’s footprint in governance had increased after the formation of the Special Investment Facilitation Council (SIFC) last year. 
“It seems, as of now, that the SIFC, which is led by the military, will be calling the shots and making all the major decisions in the country that could mean a reduced role for the incoming prime minister and his cabinet,” she added.
Abdul Basit Khan, a research fellow at the S. Rajaratnam School of International Studies in Singapore, believed stemming the tide of rising militancy in Pakistan’s Khyber Pakhtunkhwa and Balochistan provinces would be a major challenge for the new government. 
“Terrorism has risen by more than 73 percent in Pakistan since the Taliban took power in Afghanistan, the Baloch insurgents have sanctuaries in Iran, while TTP [Tehreek-e-Taliban Pakistan] has hideouts in Afghanistan, so Pakistan not only requires a major counterterrorism offensive, but a new counterterrorism policy as well,” he told Arab News.
Abdul Basit said ties between the center and the Khyber Pakhtunkhwa province, ruled by Khan’s PTI, were going to be “conflict-prone.” 
“How the center will navigate its dealings with Khyber Pakhtunkhwa to de-conflict counterterrorism from political infighting will be another challenge for the federal government,” he added.
The government would find itself in an “unenviable position” wherein it would lose popularity the moment it embarked on painful economic reforms that were a necessity at this time, according to Uzair Younus, ex-director of the Pakistan Initiative at the Washington-based Atlantic Council think tank.
“While opposition pressure and protests may create noise, the survival of this government will ultimately depend on maintaining the confidence of Pakistan’s most powerful institution and the man running it,” he told Arab News.
As a result, Younus believed, staying in sync with the army, which has directly ruled the country on several occasions and continues to hold sway in politics, and not the public at large, would be top priority for the prime minister.
Zoya Tariq, a Lahore-based political analyst, said the new government was undoubtedly facing challenging times due to a “formidable” opposition and severe economic constraints.
She said Sharif had to take all the provinces along with him to deal with economic and security challenges. 
“Only the actions of the new government will determine if they can reduce its alienation from the public, improve credibility, and address the serious issues faced by the country,” Tariq added.
Naveed Aman Khan, a political analyst and columnist, said it would be the prime responsibility of the government and the opposition to steer the nation from marshes of poverty, lawlessness and inflation. 
“Electricity, gas tariffs and petroleum product prices have become unbearable for a poor Pakistani,” he added.


Saudi Arabia’s Crown Prince congratulates Shehbaz Sharif on becoming Pakistani PM

Saudi Arabia’s Crown Prince congratulates Shehbaz Sharif on becoming Pakistani PM
Updated 04 March 2024
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Saudi Arabia’s Crown Prince congratulates Shehbaz Sharif on becoming Pakistani PM

Saudi Arabia’s Crown Prince congratulates Shehbaz Sharif on becoming Pakistani PM
  • Sharif, 72, took oath of his office at a ceremony held at the President House in Islamabad on Monday
  • Felicitations also poured in from China, Turkiye and Iran on Sharif’s election as prime minister of Pakistan

ISLAMABAD: Saudi Arabia’s Crown Prince Mohammed bin Salman on Monday congratulated Shehbaz Sharif after he was sworn-in as 23rd prime minister of Pakistan, the official Saudi Press Agency said.

The National Assembly, lower house of Pakistan parliament, elected Sharif as the leader of the house by 201 votes, defeating jailed former prime minister Imran Khan-backed candidate, Omar Ayub.

Sharif, 72, took oath of his office for a second term at a ceremony held at the President House in the Pakistani capital of Islamabad.

“His Highness Crown Prince congratulates Muhammad Shehbaz Sharif on the occasion of his swearing in as the Prime Minister of the Islamic Republic of Pakistan,” the SPA said on X.

Pakistan and Saudi Arabia enjoy strong trade, defense and brotherly relations. The Kingdom is home to over 2.7 million Pakistani expatriates, serving as the top destination for remittances for the cash-strapped South Asian country.

Earlier, felicitations also poured in from China, Turkiye and Iran on Sharif’s election as the prime minister on Sunday.

Sharif, who previously served as prime minister after Khan was ousted from office in April 2022, will have several challenges to deal with. His main role will also be to maintain ties with the military, which has directly or indirectly dominated Pakistan since independence.

He also takes over at a time when the new government will need to take tough decisions to steer the country out of financial crisis, including negotiating a new bailout deal with the International Monetary Fund (IMF) after the current IMF program expires this month.

Sharif will have to juggle relations with the US and China, both major allies, while dealing with deteriorating ties with neighbors India, Iran and Afghanistan. Pakistan is also facing a troubling rise in militancy, which Sharif’s government will have to immediately tackle.