SBP eases rules for ‘Bank Directors’ to join ‘Boards’ of wholly-owned exchange firms

November 08, 2025 (MLN): The State Bank of Pakistan (SBP) has amended its Corporate Governance Regulatory Framework to allow directors or CEOs of banks to also serve as directors on the boards of exchange companies wholly owned by their respective banks.

According to the Circular Letter issued, the amendment aims to strengthen institutional coordination between banks and their subsidiaries.

Under the revised rule, while individuals holding substantial interest or senior positions in certain financial entities, such as stock exchanges, brokerage firms, credit bureaus, or related companies, remain restricted from serving as directors or CEOs of banks/DFIs, an exception has now been made for wholly-owned exchange companies.

The circular states:

“President/CEO or Director of a bank may serve as a director of an exchange company wholly owned by that bank, subject to submission of an additional affidavit as per Appendix-V.”

Additionally, the SBP clarified that a board member of the Pakistan Stock Exchange (PSX) may be appointed as a board member of any bank or DFI if they are serving as an independent director of PSX and have no association with other restricted entities.

All other provisions of the Corporate Governance Regulatory Framework remain unchanged.

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