1st cohort of Regulatory Sandbox: SBP announces short-listed applicants

KARACHI: The State Bank of Pakistan (SBP) on Tuesday announced the short-listing of six applicants for live testing under its Regulatory Sandbox, marking another step toward accelerating innovation in the country’s financial sector.

A Regulatory Sandbox enables a live testing environment for innovative products, services or business models, pursuant to a specific testing plan, which usually includes some degree of regulatory lenience combined with certain safeguards.

The selected entities will pilot their proposed solutions across key areas including open banking, remote merchant onboarding, and technology-driven inward remittances, allowing the central bank to assess new digital models in a controlled regulatory environment before wider adoption.

In line with its Vision 2028, the State Bank of Pakistan (SBP) launched its Regulatory Sandbox to foster innovation in digital financial services with the issuance of Guidelines in May 2025.

Subsequently, the State Bank announced its first regulatory sandbox cohort in August 2025, inviting applications from fintechs and financial institutions under three priority themes: technology-enabled solutions for inward remittances, open banking, and remote onboarding of merchants.

The SBP received strong interest from regulated financial institutions as well as local and international fintech companies. To ensure transparency and effective oversight, SBP has formed a high-level Steering Committee to oversee the entire process.

Now, the State Bank of Pakistan has announced the short-listing of six successful applicants for testing their proposed solutions under the regulatory sandbox. The selected entities include Neem Exponential Financial Services (Pvt) Ltd, Digi Khata (SMC-Private) Limited, and Swich Retail (Pvt) Ltd under the “Open Banking” theme. In addition, the Bank of Punjab for remote onboarding of merchants. While, Barq Fintech (Pvt) Ltd and Taptap Send UK Limited in collaboration with United Bank Limited for technology-enabled solutions for inward remittances.

The short-listed participants will test their proposed solution within a controlled live environment for up to six months, subject to conditions specified at the time of approval.

SBP anticipates that the Regulatory Sandbox initiative will foster an environment conducive to the development and introduction of practical, user-centric technological solutions in the financial sector.

According to SBP, the recent developments in new technologies and Fintechs have introduced innovative business models and solutions that have the potential to contribute to the public policy agenda of regulators such as digitalization and financial inclusion among others. Globally, many regulators are actively studying the potential impact of Fintech innovations on both consumers and the market, and adapting current regulatory frameworks to foster new opportunities without compromising consumer protection and financial stability.

A Regulatory Sandbox enables a live testing environment for innovative products, services or business models, pursuant to a specific testing plan, which usually includes some degree of regulatory lenience combined with certain safeguards.

Regulatory Sandboxes have been adopted by many regulators for new entrants as well as established players who are looking for clarity around new digital solutions that do not easily fit into the existing regulatory framework.

The Guidelines for the Regulatory Sandbox aim to encourage the development of new technologies, products, and business models while enabling regulators to identify potential risks linked to innovative solutions and design appropriate mitigation mechanisms.

Copyright Business Recorder, 2026