State Bank Bars Banks from Blocking Accounts Without Legal Authority

Islamabad:** The State Bank of Pakistan (SBP) has directed banks not to block customers’ bank accounts without a valid legal basis, approval from the competent authority, and proper verification.

According to an official directive, banks may impose restrictions on an account only after fulfilling all legal requirements and obtaining authorization from the relevant competent authority.

The SBP also instructed financial institutions to ensure that precautionary or unintended restrictions do not cause unnecessary hardship or financial loss to account holders.

In a related development, the central bank has submitted a compliance report to the Islamabad High Court regarding the implementation of its orders.

The court had previously ruled that banks cannot freeze or block accounts without legal authority and the approval of the competent authority, reinforcing safeguards for customers’ financial rights.