Bank deposits are 'perfectly safe': SBP
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Bank deposits are 'perfectly safe’: SBP
KARACHI (Web Desk) --The State Bank of Pakistan (SBP) on Thursday stated bank deposits in the country were “perfectly safe owing to a sound banking system in Pakistan under a robust regulatory and supervisory framework”.
The central bank in a statemnet said certain sections of the media had implied as if “bank deposits above Rs500,000 in the banking system in Pakistan are unsafe” on the basis of the statement given by SBP Deputy Governor Inayat Hussain during a meeting of the Senate Standing Committee on Finance and Revenue.
The SBP deputy governor had told the committee that an account holder’s deposit of up to Rs500,000 was protected by the Deposit Protection Corporation (DPC) and around 94pc of the depositors fell under this category.
1/2 #SBP clarifies that bank deposits are perfectly safe owing to a sound banking system in Pakistan under a robust regulatory and supervisory framework. See PR: https://t.co/zLD1B94RdO#SBPClarification pic.twitter.com/d6O2hu9Dun
— SBP (@StateBank_Pak) October 5, 2023
In the statement issued today, the central bank categorically stated that the deposits were safe owing to a sound banking system in Pakistan, under a robust regulatory and supervisory framework of the SBP.
It highlighted the banking system was “adequately capitalised, highly liquid and profitable with a low level of net non-performing loans”.
It said the sector had posted a “strong” profitability of Rs238 billion in the first half of the current calendar year (CY23), almost 125 per cent higher than the first half of CY22.
The higher profit, in turn, also strengthened the capital of banks and the Capital Adequacy Ratio (CAR) of the banking sector increased to 17.8pc by end June 2023 compared to 16.1pc as of end June 2022, substantially higher than SBP’s minimum regulatory requirement of 11.5pc and international standard of 10.5pc.
The SBP said with improvement in solvency buffers, the ability of the banking sector to withstand a set of severe shocks had further improved.
The SBP went on to say that in addition to the “soundness of the banking system”, the DPC had “added another layer of protection” by providing insurance cover of up to Rs500,000 to every depositor.
It was added the amount insured by the DPC became immediately available to depositors in case a bank failed.
