The State Bank of Pakistan has shortlisted six applicants to participate in its Regulatory Sandbox initiative, marking a significant step in the country’s efforts to promote innovation within the digital financial services landscape. The initiative allows selected entities to pilot new and emerging financial technologies in a controlled live environment, enabling both innovators and regulators to assess risks, benefits and practical viability before large-scale market deployment.
According to a press release issued by the External Communications Department of the central bank, the shortlisted firms will be permitted to test their proposed digital financial solutions for a period of up to six months. These pilots will operate under specific regulatory conditions defined at the time of approval, ensuring consumer protection, system stability and regulatory compliance while still allowing room for experimentation and innovation.
Among the shortlisted applicants, three companies have been selected under the open banking category. These include Neem Exponential Financial Services Private Limited, Digi Khata (SMC-Private) Limited and Swich Retail Private Limited. The open banking theme focuses on enabling secure data sharing and interoperability between financial institutions and third-party service providers, a move that is expected to improve financial inclusion, competition and customer-centric digital products in Pakistan’s banking sector.
In the area of remote merchant onboarding, the Bank of Punjab has been selected to test solutions aimed at simplifying and digitizing the onboarding process for merchants. This theme is particularly relevant as financial institutions seek to reduce operational costs, improve efficiency and expand digital payment acceptance among small and medium-sized businesses across the country.
Under the technology-enabled inward remittances category, Barq Fintech (Pvt) Ltd has been shortlisted alongside a joint application submitted by Taptap Send UK Limited and United Bank Limited. These solutions are expected to explore innovative ways to enhance the speed, transparency and affordability of remittance inflows, which remain a critical component of Pakistan’s external finances and household income support.
The Regulatory Sandbox initiative was officially launched in May 2025 as part of the State Bank of Pakistan’s broader Vision 2028 strategy. The vision aims to build a modern, inclusive and resilient digital financial ecosystem by encouraging responsible innovation while maintaining financial stability. The central bank had announced the first cohort of sandbox applicants in August 2025, inviting proposals across three key focus areas: technology-enabled inward remittances, open banking and remote merchant onboarding.
SBP noted that the initiative attracted strong interest from a wide range of participants, including regulated financial institutions as well as local and international fintech companies. This response highlights the growing maturity and ambition of Pakistan’s fintech sector, as well as increasing collaboration between traditional banks and technology-driven firms.
To maintain transparency and ensure effective oversight, the central bank has constituted a high-level steering committee to supervise the sandbox process. This committee will oversee testing activities, assess outcomes and guide potential regulatory adjustments based on lessons learned during the pilot phase.
According to SBP, the Regulatory Sandbox is expected to support the development and rollout of practical, user-centric technological solutions. By providing a structured testing environment, the central bank aims to reduce barriers to innovation while strengthening trust in digital financial services, ultimately contributing to the growth and evolution of Pakistan’s digital financial ecosystem.
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