SBP permits VPN use for exchange companies under strict conditions

Conditions tied to permission for VPN use oblige exchange companies to restrict direct internet access
An undated image. — Unsplash
An undated image. — Unsplash

While Pakistan continues to observe the registration and blockage of virtual private networks (VPNs), the State Bank of Pakistan (SBP) on Friday permitted exchange companies to use VPNs.

The permission to exchange companies is reportedly granted to seamlessly bring about essential operations including currency exchange, inflow and outflow of remittances, utility bill payments and others.

As outlined in the Regulatory Framework for Exchange Companies, the companies concerned would create backup network connections to main and backup sites using VPN or any dedicated private connection, as reported by ProPakistani.

Moreover, conditions tied to the permission also obliged exchange companies to restrict direct internet access.

The central bank issued a stringent regulatory framework for exchange companies, including high paid-up capital requirements, operational compliances, monitoring systems and security controls.

As per the regulations imposed by SBP, exchange companies are required to have their primary and secondary data centres within Pakistan, while they are allowed to outsource their workload to local Cloud Service Providers (CSPs).

Other major demands for these companies revolve around security requirements to protect their operating systems, software, networks, security devices and databases.