Karachi: The State Bank of Pakistan (SBP) has directed banks across the country not to freeze or restrict customer accounts without lawful authority, proper verification and approval from a competent authority.
The central bank issued the instructions in compliance with court directives, requiring banks to ensure that even precautionary or unintentional restrictions do not cause unnecessary hardship to account holders.
Under the new guidelines, banks may impose debit blocks, operational restrictions or account freezes only where such action is supported by law. The SBP said any restriction on a customer’s account must be based on clear legal authority and implemented only after appropriate verification.
Banks have also been instructed to establish internal compliance mechanisms to ensure the directives are fully implemented and to prevent unauthorised restrictions on customer accounts.
According to the SBP, these internal systems should safeguard account holders from unnecessary financial losses or inconvenience caused by precautionary measures taken without legal basis.
The directives follow a ruling by the Islamabad High Court, which held that banks cannot freeze customer accounts without legal authority or the approval of a competent authority.
The court, through Justice Arbab Muhammad Tahir, directed the SBP to formulate an internal mechanism and issue the necessary instructions to commercial banks. The central bank subsequently submitted its compliance report to the court.
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