The State Bank of Pakistan (SBP) has been empowered to build and operate a centralised virtual data repository that will consolidate banking records and financial transaction data of account holders from scheduled banks across the country.
The authority was granted through an amendment to the Income Tax Ordinance 2001, which inserted a new Section 165AB. Under this provision, banking confidentiality laws will no longer bar banking companies and electronic money institutions (EMIs) from sharing customer information with the state.
Every bank and EMI will now be required to electronically upload prescribed data to the central hub for account holders whose deposits or withdrawals exceed Rs100 million during a given reporting period.
The uploaded information will undergo algorithmic cross-matching against tax records to identify discrepancies between declared income and banking activity. According to the amendment, this data will remain hidden from income tax authorities throughout the automated matching process.
Only in cases where a significant mismatch is detected will the relevant details be forwarded to the Federal Board of Revenue’s Compliance Risk Management (CRM) system, where the National Faceless Centre will take up the case for further proceedings.
The amendment also lays out definitions for key terms used in the framework, including reporting period, specified date, accounts, peak credits, central data hub, and compliance risk management. Additionally, it introduces confidentiality safeguards to govern how the collected data is handled and protected throughout the process.
