A retired employee walks into a Karachi bank to deposit Rs 1.5 million from selling his car. He has held an account there for twenty years. Yet the officer asks for evidence of the sale. The customer is puzzled: the car was his, and the proceeds are legitimate. Why must he explain the money?
Pakistan’s banks must understand their customers and assess whether transactions are consistent with their known financial circumstances. That obligation is legitimate. How it is applied can determine whether a routine transaction becomes an ordeal.
Why banks ask about the source of money
Pakistani banks operate under anti-money-laundering and counter-financing-of-terrorism requirements. The State Bank of Pakistan (SBP) requires regulated institutions to identify customers, assess risks and conduct ongoing due diligence. This is commonly called Know Your Customer, or KYC.
In July 2025, SBP issued its Consolidated Customer Onboarding Framework; amendments followed in March 2026. Account opening and ongoing monitoring are related but distinct. A customer identified years ago may still be asked to update information or explain an unusual transaction.
Source of funds is not the same as source of wealth
If a customer receives Rs 4 million after selling property, the source of funds is the sale generating that particular payment. Source of wealth concerns how the customer accumulated their broader financial position, perhaps through employment, inheritance or business earnings.
Banks may need information about one or both, depending on applicable requirements and risk. Enhanced due diligence can involve enquiries into the origin of funds and wealth and the purpose of transactions. This does not mean every depositor must produce an exhaustive financial history.
When does a transaction attract attention?
A salaried customer usually receives Rs 120,000 monthly. One afternoon, Rs 3.5 million arrives. It might be an inheritance, a vehicle sale or accumulated savings. The bank may ask why the payment differs from established activity. An explanation supported by appropriate evidence can help resolve the enquiry.
An unusual transaction is not proof of money laundering. Nor does a large deposit automatically mean an account must be frozen. Transaction monitoring, reporting, enhanced due diligence, refusal to execute a transaction and account restrictions are distinct processes.
Which documents may help?
| Transaction | Possible evidence |
|---|---|
| Vehicle sale | Sale agreement, ownership-transfer record or payment evidence |
| Property sale | Sale deed and payment trail |
| Salary arrears or bonus | Employer letter or payslip |
| Inheritance | Relevant succession or estate documents |
| Business receipts | Invoices, contracts or sales records |
| Family remittance | Remittance receipt, sender details and explanation of relationship |
| Transfer from another personal account | Account statement or transfer confirmation |
These are examples, not a mandatory checklist for everyone. Ask which information is required and whether alternative evidence is acceptable.
Can a bank stop a transaction or freeze an account?
A request for documents is not the same as refusal of a transaction. Refusing one transaction is not necessarily a restriction on the entire account. Neither should be confused with a freeze imposed under a legal order or applicable sanctions requirements. Different circumstances have different legal consequences.
Ask the bank: “Is my entire account restricted, or is only this transaction under review?” A bank may be unable to reveal details of suspicious-transaction reporting or internal investigations, but should provide whatever procedural information it may lawfully disclose.
What if the money comes from a daughter living abroad?
Parents in Pakistan may receive regular financial support from a daughter in Germany, or a larger one-off transfer for medical treatment. The bank might ask for details if a payment differs from previous activity. A remittance receipt, sender identification and an explanation of the relationship may help, depending on the circumstances.
Family support should not automatically be treated as suspicious merely because the sender lives overseas. For related issues, see Why Your International Payment Can Be Stopped After Your Pakistani Bank Approves It.
What if the bank does not resolve the matter?
Begin with a formal complaint to the bank’s complaint-management unit. Record the transaction date, amount, documents provided and the explanation received. Keep the complaint reference.
Under SBP complaint guidance, customers of eligible banks may generally approach Banking Mohtasib Pakistan if the bank does not respond within 45 days or its response is unsatisfactory. The route and jurisdiction differ for some institutions and types of dispute. SBP’s Sunwai complaint portal provides a route for lodging and tracking banking complaints.
Never provide passwords, PINs or one-time passcodes to anyone claiming to update KYC. Read What Pakistani Bank Customers Should Know About Their Rights and Bank Transfer Failed in Pakistan? How to Trace Your Money and Complain for related guidance.
Does FATF require banks to question everyone?
The Financial Action Task Force sets international standards for countering money laundering and related financial crimes. Pakistan’s removal from FATF’s increased-monitoring list in October 2022 did not end domestic compliance obligations. But a risk-based approach does not mean treating every customer as equally risky.
A pensioner depositing documented car-sale proceeds and a complex network of unexplained third-party transactions pose different questions. Banks need to recognize that distinction.
The problem with excessive compliance
An elderly customer may struggle to retrieve old records. A small trader may keep records differently from a large corporation. These circumstances are not proof of wrongdoing. Bank staff should identify what information is missing, explain acceptable evidence and provide an escalation route. Customers should retain reasonable records of major transactions and answer legitimate enquiries accurately.
What to do when your bank questions a deposit
Before leaving the branch, establish four things: what document is required, why the bank needs it, whether the transaction or account is restricted, and how to request a formal review. Keep copies of records and the reference number of any complaint.
A legitimate transaction may still require explanation. But customers should not have to guess what the bank wants or which procedure applies. Effective KYC identifies genuine financial risks without making ordinary customers navigate an opaque system.
Official references
- State Bank of Pakistan — banking regulations, circulars and customer onboarding
- SBP Sunwai — complaints portal
- Banking Mohtasib Pakistan
- Financial Action Task Force — international standards