01/06/2026
Bank of Azad Jammu & Kashmir Becomes First AJK Government-Owned Bank to Apply for Scheduled Bank Status
Muzaffarabad, June 01, 2026
The Bank of Azad Jammu & Kashmir (BAJK) has achieved a historic milestone by formally lodging its application for the grant of Scheduled Bank Licence with the State Bank of Pakistan (SBP) on Monday, 01 June 2026.
The application was submitted during a meeting of representatives of the Bank of Azad Jammu & Kashmir with officials of the Banking Policy & Regulations Department (BPRD) of the State Bank of Pakistan at SBP Headquarters, Karachi.
This marks a significant step in the Bank's transformation journey and positions BAJK to become the first government-owned bank of Azad Jammu & Kashmir to attain Scheduled Bank status under the regulatory framework of the State Bank of Pakistan.
Established in 2006 through an Act passed by the Azad Jammu & Kashmir Legislative Assembly, the Bank of Azad Jammu & Kashmir was created to serve the financial and developmental needs of the people of Azad Jammu & Kashmir. Over the past two decades, the Bank has expanded its operations across the territory and has played an important role in promoting financial inclusion, supporting businesses, facilitating government transactions and contributing to the economic development of the region.
In preparation for obtaining Scheduled Bank status, the Bank has undertaken comprehensive reforms and successfully fulfilled all major requirements prescribed by the State Bank of Pakistan, including enhancement of its paid-up capital to the minimum regulatory threshold, strengthening of corporate governance arrangements, implementation of robust risk management systems, modernization of information technology infrastructure, enhancement of AML/CFT compliance frameworks and preparation of a comprehensive strategic business plan aligned with regulatory expectations.
Under the SBP's prescribed process, the application will undergo detailed evaluation, including Fit and Proper assessments of the Bank's Board of Directors and senior management, review of governance structures, operational readiness and compliance with all applicable regulatory requirements. The expected processing period is approximately eight weeks.
Subject to successful completion of the regulatory review process and approval by the State Bank of Pakistan, the Bank expects to obtain Scheduled Bank status during July 2026.
Mr. Shahid Shahzad Mir, Acting President & CEO of the Bank of Azad Jammu & Kashmir, stated:
"The submission of our application for Scheduled Bank status represents a landmark achievement in the history of the Bank and a major step forward for the financial sector of Azad Jammu & Kashmir. This accomplishment reflects the vision and support of the Government of Azad Jammu & Kashmir, the guidance of our Board of Directors, Chief Secretary, Govt. of AJK, Secretary Finance, Govt. of AJK and the dedication of our employees. We remain fully committed to meeting all regulatory expectations of the State Bank of Pakistan and operating in accordance with the highest standards of governance, compliance and banking excellence."
Upon obtaining Scheduled Bank status, the Bank plans to significantly expand its footprint beyond Azad Jammu & Kashmir by establishing branches across Pakistan and abroad, introducing innovative banking products and digital financial services, and exploring opportunities for international expansion to serve overseas Pakistanis and the Kashmiri diaspora, subject to regulatory approvals.
The achievement is expected to enhance the Bank's capacity to mobilize deposits, support trade and commerce, facilitate investment, promote financial inclusion and contribute more effectively to the socio-economic development of Azad Jammu & Kashmir and Pakistan.
The Bank of Azad Jammu & Kashmir extends its gratitude to the Government of Azad Jammu & Kashmir, the State Bank of Pakistan, its customers, stakeholders and employees for their continued support in this transformative journey.
