KARACHI - The State Bank of Pakistan on Friday allowed banks/DFIs to earn remuneration and commission on insurance premium from customer for payment of insurer under Bancassurance agreement between the banks and insurance companies, executed in accordance with SECP guidelines in this regard. This measure has been taken in light of the BPRD Circular Letter No.5 issued on February 25, 2010 on the above subject. The SBP said in these arrangements, a Bank/DFI acts as a corporate distribution agent and sells Bancassurance product to its customers and receives commission against services rendered on behalf of the insurance companies. Earlier, according to the conditions of this circular, the banks/DFIs were restricted from retaining a part of insurance premium received from customers for payment of insurer. It further said the purpose of issuing the above instructions was not to discourage Bancassurance products but to transfer the benefit of discount in insurance premium to customers.