SBP updates prudential regulations for microfinance banks

May 19, 2025 (MLN): To align with the shifting dynamics of the financial sector, the State Bank of Pakistan (SBP) has revised the Prudential Regulations (PRs) for Microfinance Banks (MFBs), introducing updated standards aimed at strengthening institutional governance, operational integrity, consumer protection, and risk management practices.

The revised framework outlined minimum benchmarks that MFBs must follow to promote financial stability and ensure the long-term sustainability of their operations.

It also consolidated various instructions previously issued by the SBP, providing a unified regulatory structure for the sector.

These updated regulations are effective immediately unless stated otherwise, and MFBs are required to continue complying with all other SBP directives that are not covered within the revised PRs.

Any deviation or non-compliance will invite enforcement action under the relevant legal and regulatory provisions.

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