SBP Allows 50% Rise in Bank Board Meeting Fees For 2026. The State Bank of Pakistan (SBP) has approved a 50% increase in fees for bank board directors’ meetings, triggering debate across Pakistan’s banking and corporate governance landscape. This 2026 explains what changed, why it matters, and how it impacts commercial banks, directors, and shareholders.
SBP’s Decision on Board Meeting Fees Explained
The State Bank of Pakistan, acting under its regulatory mandate, has revised the Corporate Governance Regulatory Framework to allow higher remuneration for bank directors attending board meetings.
This move reflects:
- Rising governance responsibilities
- Increased compliance workload
- Global benchmarking of board compensation
The revision applies to commercial banks operating in Pakistan and introduces tier-based fee limits.
Updated Fee Structure for Bank Directors (2026)
Banks with Assets Above Rs. 1 Trillion or Profits ≥ Rs. 5 Billion
SBP now allows large banks to pay:
- Up to Rs. 1.2 million per director per board meeting
- Previous cap: Rs. 0.8 million
This represents a straight 50% increase, aimed at aligning compensation with the scale and complexity of large banking institutions.
Banks with Assets Below Rs. 1 Trillion
Smaller banks have also received a revision:
- New limit: Rs. 0.75 million per meeting
- Previous limit: Rs. 0.5 million
Although lower than large banks, the increase recognizes the growing regulatory and risk oversight burden faced by directors across all bank sizes.
Comparison Table: Old vs New Board Meeting Fees
| Bank Category | Old Limit (Rs.) | New Limit (Rs.) | Increase |
|---|---|---|---|
| Large Banks (≥ Rs. 1T assets) | 0.8 million | 1.2 million | 50% |
| Smaller Banks | 0.5 million | 0.75 million | 50% |
This table improves content scannability and supports featured snippet eligibility.
Why SBP Revised the Corporate Governance Framework
1. Increased Director Responsibilities
Modern bank boards are no longer symbolic. Directors are deeply involved in:
- Risk management oversight
- Cybersecurity and IT governance
- Compliance with SBP prudential regulations
- ESG and sustainability decisions
2. Global Governance Alignment
SBP aims to bring Pakistan’s banking governance closer to international best practices, where board members are compensated according to risk exposure and accountability.
3. Talent Retention at Board Level
Experienced independent directors are in high demand. Competitive compensation helps banks:
- Attract qualified professionals
- Retain governance expertise
- Reduce regulatory weaknesses
How Often Do Bank Boards Meet?
Typically, commercial banks hold four board meetings per year, though additional meetings may be convened for:
- Emergency risk reviews
- Regulatory compliance matters
- Strategic decisions or mergers
Each meeting involves extensive preparation, documentation review, and regulatory alignment.
Who Sits on a Bank’s Board?
A standard bank board includes:
- Chief Executive Officer (CEO)
- Executive Directors
- Independent Directors
- Nominee Directors
These members collectively make high-stakes financial and strategic decisions impacting depositors, investors, and the broader economy.
Additional Remuneration for Committee Roles
Extra 20% Compensation Explained
SBP has clarified that directors performing additional responsibilities may receive:
- Up to 20% extra remuneration
- Subject to shareholder approval
- Must be justified in the bank’s remuneration policy
Key Board Committees Include:
- Human Resource Committee
- Audit Committee
- Risk Management Committee
- Information Technology Committee
These committees demand specialized expertise, especially in areas like IT risk and regulatory compliance.
Travel, Boarding & Training Expenses: What’s Covered?
SBP has also issued clarity regarding expenses:
Reimbursable by the Bank
- Travel costs for meetings
- Boarding and lodging
- Domestic training programs
Not Covered
- Any additional or personal expenses
All reimbursements must be made at actual cost, ensuring transparency and accountability.
How Much Are Banks Already Paying Their Directors?
Recent disclosures show wide variation in board remuneration across banks:
- Meezan Bank paid Rs. 65.4 million to 8 directors in 2026
- United Bank Limited (UBL) paid Rs. 117 million to 8 directors
- Standard Chartered Bank Pakistan paid Rs. 28.7 million in total remuneration
These figures highlight how board compensation scales with bank size, profitability, and governance structure.
Impact of the Fee Increase on Pakistan’s Banking Sector
Positive Impacts
- Stronger corporate governance
- Better regulatory compliance
- Improved risk oversight
- Higher accountability at board level
Potential Concerns
- Shareholder scrutiny on costs
- Public perception challenges
- Need for strict performance justification
Overall, experts believe the benefits outweigh the risks if transparency is maintained.
FAQs
What did SBP change regarding board meeting fees?
SBP allowed a 50% increase in the maximum fee banks can pay directors for attending board meetings.
How much can a bank director earn per meeting in 2026?
Large banks can pay up to Rs. 1.2 million per meeting, while smaller banks can pay up to Rs. 0.75 million.
Does SBP allow extra pay for committee roles?
Yes, directors may receive up to 20% additional remuneration with shareholder approval.
Are travel expenses reimbursed for directors?
Yes, banks must reimburse actual travel, boarding, and lodging costs for official meetings.
Conclusion
The SBP’s decision to allow a 50% rise in bank board directors’ meeting fees marks a significant shift in Pakistan’s corporate governance framework. By recognizing the growing complexity of board responsibilities, SBP aims to strengthen oversight, accountability, and long-term financial stability.
