By Staff Reporter
ISLAMABAD: The finance ministry stripped commercial banks of their role in verifying pensioners are alive, shifting that responsibility to the country’s national identity database in a bid to unclog a payment system that has long frustrated the nation’s retirees.
The Ministry of Finance issued revised standard operating procedures on Tuesday that eliminate banks’ involvement in collecting or validating proof-of-life certificates, according to a notification from the ministry. The overhaul acts on directives from Prime Minister Shehbaz Sharif and marks one of the most significant changes to Pakistan’s federal pension architecture in years.
Under the new framework, the National Database and Registration Authority — the agency that issues Pakistan’s national identity cards, known as Nadra — will connect directly with the Controller General of Accounts and the Military Accountant General through a secure programming interface. That link will transmit what the ministry called a “Digital Life Signal” straight from Nadra to the government’s accounting offices, sidestepping the banking system entirely.
Commercial banks will now function purely as pension disbursement agencies, the ministry said, with no statutory or administrative authority over the verification, collection or retention of proof-of-life certificates or biometric data. The sole exception applies when banks operate as authorized conduits through Nadra’s own verification system.
The ministry also moved to protect pensioner accounts from a persistent complaint: banks freezing them under routine dormancy rules. Pension-disbursing accounts will no longer be subject to standard bank dormancy requirements, the notification said, a provision that formalizes a decision the government made last month under the Federal Government Receipt and Payment Rules, 2025.
Paper Process Scrapped
The revised procedures also formally retire the so-called Disburser’s Half — the paper documentation banks have long used to process pension payments. Federal pensions will now move exclusively through the Direct Credit System, completing a shift toward digital disbursement that Pakistani officials have pursued for several years.
The State Bank of Pakistan, accountant general offices, Nadra and the finance ministry jointly developed the new procedures, the notification said, describing the changes as an effort to balance convenience for pensioners against tighter verification controls.
Pensioners will be able to complete proof-of-life verification through the Nadra Pak-ID mobile application or through authorized Nadra channels, including registration centers, mobile units, e-Sahulat franchises, or bank branches that operate strictly as designated Nadra verification points.
The verification window itself has also changed. Pensioners must now confirm they are alive at least once every 180 days, the ministry said, replacing a fixed biannual schedule that had required certification in March and September specifically. Under the new system, pensioners can complete verification at any point within that six-month window.
Family pensioners whose payments depend on marital status must continue submitting Form-12 declarations, the notification said. Account transfers must be processed through the receiving bank, and pensioners must report overpayments or discrepancies directly to their accounts office and bank.
Dormant Accounts Get Reactivation Path
For accounts already marked dormant, the ministry outlined two paths back to active status: biometric verification through Nadra’s system at a bank branch serving as a verification center, or simply receiving a pension credit processed through the CGA or MAG starting in September 2026.
Pension rolls will be generated by the 24th of each month and verified by the 26th for disbursement through the State Bank’s RAAST instant payment system or other micropayment channels, the notification said, with quarterly audits reconciling Nadra’s verification logs against payment records.
The ministry also barred banks from opening pension accounts jointly, requiring that such accounts be held solely in the name of the pensioner or the eligible family pensioner.
Banks are now barred from collecting, retaining or verifying physical life certificates or biometric data for pension accounts under normal circumstances, and cannot require pensioners to visit branches for biometric checks tied to standard verification. If a pensioner arrives at a branch with paper documents, the bank must redirect them to the Nadra Pak-ID app or a registration center rather than accepting the paperwork.
Banks are also prohibited from placing any pension account on dormant status under the Federal Government Receipt and Payment Rules, 2025, or from imposing debit restrictions over a pensioner’s failure to submit proof-of-life documentation directly to the bank.
The ministry directed banks to reactivate any account marked dormant before Aug. 22, 2026, either through Nadra verification at an authorized branch or upon confirmation of a pension payment from the CGA or MAG starting in September.
For accounts placed in suspense status by the CGA or MAG where funds went uncollected, banks must remit those funds to the government once they receive formal notice — banks cannot independently suspend or close accounts on their own, the notification said.
Manual Option Preserved for Vulnerable Pensioners
The ministry carved out an exception for pensioners who cannot use the mobile verification app because of limited digital access, advanced age, or debilitating medical conditions, as well as for family pension cases where Nadra’s records have not been updated to reflect a remarriage or other change in marital status. Those individuals can visit a District Accounts Office or Pension Facilitation Centre under the CGA or MAG to submit a manual life certificate, known as Form 10, or a marital status declaration, Form 12.
Authorized personnel at those offices will upload the documents directly into the centralized system, the notification said, adding that commercial banks are strictly barred from accepting or processing Form 10 or Form 12 submissions themselves.
The ministry said accounts offices and banks will conduct quarterly reconciliations based on API logs and digital ledgers, with any discrepancies to be resolved within six weeks.
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