The State Bank of Pakistan (SBP) has announced that all banks across the country will remain closed for public dealing on the first day of Ramadan-ul-Mubarak, 1447 A.H., to facilitate the annual deduction of Zakat from eligible accounts.
In a formal notification on Tuesday, February 17, 2026, the central bank stated that the bank holiday will apply to all commercial banks, development finance institutions (DFIs) and microfinance banks (MFBs). On this date, these institutions will not serve customers for transactions, cash withdrawals or public banking operations.
However, employees of banks, DFIs and MFBs are required to attend their offices as usual. The holiday only affects public dealing services, while internal operations and staff work will continue normally.
Why the Holiday Happens
The annual bank holiday aligns with Pakistan’s longstanding Zakat deduction process, which occurs on the first day of Ramadan every year. Under the Zakat and Ushr Ordinance of 1980, banks and other Zakat Collecting and Controlling Agencies are required to deduct 2.5 % Zakat at source from savings and profit-sharing accounts that meet the defined Nisab threshold.
For 2026, the government has fixed the Nisab (minimum balance for Zakat liability) at Rs503,529. Accounts with balances above this level on the first day of Ramadan will be subject to deduction. Accounts below this threshold will not have Zakat deducted automatically.
The collected Zakat is then transferred to the Central Zakat Fund and distributed to eligible beneficiaries through provincial and local Zakat councils, supporting poverty alleviation and social welfare programs.
Impact on Public and Digital Banking
Customers should plan their banking needs ahead of the first day of Ramadan, as branches will not process public transactions on that date. However, digital services such as ATMs, online banking and mobile apps will remain operational, allowing basic financial activities even on the bank holiday.
This move follows a longstanding practice where the SBP has routinely declared similar holidays in prior years to ensure a smooth Zakat collection process. In 2025, the first Ramadan bank holiday was observed on March 3 for the same purpose, closing banks nationwide.
