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Tuesday, December 5, 2023

SBP launches its ‘Banking on Equality’ Policy

State Bank of Pakistan (SBP) has launched a gender mainstreaming policy titled “Banking on Equality: Reducing the Gender Gap in Financial Inclusion”, which aims to reduce the gender gap in financial inclusion and improve women’s access to financial services.

President of Pakistan Dr. Arif Alvi on Friday unveiled the State Bank of Pakistan’s (SBP) ‘Banking on Equality’ (BoE) Policy. The purpose of the policy is to reduce the gender gap in financial inclusion in the country.

According to the statement released by the SBP, the policy aims to improve women’s access to financial services in Pakistan.

The BoE policy comprises of five key pillars, including improving gender diversity in financial institutions and their access points; Development and marketing of women-centric products and services; Creating women desks at bank branches for improved facilitation for women customers; Robust collection of gender-disaggregated data and target setting; and Institutionalizing a Policy Forum on Gender at SBP.

Under this, specific targets have been set. Firstly, the financial institutions are required to increase the women employees’ ratio in the workforce to at least 20% by December 2024.

To improve women-to-women dealings at the retail level, branchless banking (BB) providers shall be instructed to increase the ratio of women BB agents to 10% in their agent portfolios.

Similarly, dedicated, and trained women champions shall be placed at 75% of all banks to help guide female customers by June 2024, and lastly, all banks will give gender sensitivity training to their staff, both male and female, to eliminate implicit gender biases and improve their understanding of the requirements of women customers.

Dr. Arif Alvi’s speech

Speaking at the launch ceremony, Dr. Alvi said that the Government of Pakistan (GoP) recognizes women’s financial inclusion as a key driver for achieving sustainable and inclusive economic growth in the country.

The President added that it is the Government’s declared policy to promote women’s inclusion by providing equitable opportunities for access to financial services to all segments of the population and SBP’s BoE Policy will be instrumental for achieving this goal.

Dr. Alvi applauded SBP’s efforts and expressed his expectation that the Banking on Equality policy would help mainstream women’s financial inclusion agenda as part of financial institutions’ strategic priorities through binding targets.

He said that the policy initiated by the SBP is in line with Imran Khan’s vision of “One woman, One bank account policy”.

Commenting on this development, Governor SBP Dr. Reza Baqir said that reducing the gender gap in financial inclusion has remained a priority for SBP as mainstreaming the role of women has widespread benefits at social, economic, and financial levels for the entire country.

He added that the first step to empowerment was giving women access to entrepreneurial opportunities through having a formal bank account.

Dr. Baqir said that a major driver of financial accessibility to the people from various socioeconomic backgrounds in Pakistan has been branchless banking, which reduced the cost of setting up brick and mortar structures for banks, helping them expand into previously inaccessible areas.

As a result of this, by December 2020, 62% of adults have a bank account showing significant growth from 45% in 2017. Under the National Financial Inclusion Strategy (NFIS), a target was set to ensure that at least 20 million women must have an active bank account by 2023.

However, despite overall growth in financial inclusion, the gender gap has continued to persist. He shared that, as of December 2020, only 14.5 million active accounts are owned by women, compared to 38.7 million active accounts owned by men, meaning women only hold 27 percent of total Bank accounts.

Governor Baqir shared that SBP has recently introduced a customers’ digital onboarding framework for banks, which allows bank account opening through digital means without the need to visit a bank branch and with simplified documentary requirements.

While delivering her opening remarks at this event, Deputy Governor SBP Sima Kamil said that women, especially in Pakistan, face distinct obstacles in accessing formal financial services.

While explaining the policy features, she highlighted that the BoE policy is the first gender mainstreaming policy for the financial sector, which will introduce a gender lens in our policies and practices.

It is worth mentioning here that women find many hurdles while opening a bank account in Pakistan and this policy may be the first step in solving this problem. Even in the recently launched digital onboarding framework, Housewives, women working in the informal sector need to provide details of fund provider including father’s or husband’s name, ID number, DoB, and Occupational details.

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Even documentary income Proof of fund provider is needed. Ammar Habib Khan, Chief Risk Officer at Karandaaz tweeted commented on the new digital policy, saying, “this basically means we continue to exclude people who work informal jobs or don’t have a salary slip, or who have to rely on their father/husband to open an account.”

This shows that the new frameworks still need to revolutionize to cater to the marginalized people of the economy, which are usually working in the informal sector, or unemployed, and that ease of access to financial services is ensured.