SBP Clarifies Rules for Fintechs After Sandbox Testing

The State Bank of Pakistan has clarified that successfully completing regulatory sandbox testing does not equate to regulatory approval for a product or service. Successful participants must obtain the necessary authorization and approval from the SBP before launching any tested product or service commercially. The SBP initiated its first cohort of regulatory sandbox testing in August 2025 under its Vision 2028 plan to foster innovation in digital financial services.

The sandbox enables testing of new financial solutions in a controlled setting under the central bank's regulatory supervision. The inaugural cohort concentrated on three domains: technology-driven solutions for inward remittances, open banking, and remote merchant onboarding. After an evaluation, the SBP selected six participants to test their solutions from January to June.

The central bank provided regulatory guidance and support throughout the testing phase. Upon the cohort's completion, four participants successfully showcased their solutions. Taptap Send UK Ltd and United Bank Ltd tested technology-driven inward remittance solutions, while Digi Khata (SMC Private) Ltd and Swich Retail Private Ltd and Neem Exponential Financial Services (Pvt) Ltd successfully tested open banking solutions.

The SBP stated that the insights, lessons, and regulatory recommendations from the first cohort would aid in the development of appropriate regulatory frameworks for the wider financial sector.