The State Bank of Pakistan (SBP), on Thursday, has reiterated the safety and resilience of Pakistan’s banking system, emphasising solid capitalisation, high liquidity, and profitability, making it capable of withstanding significant economic shocks. An impressive 94% of depositors are fully protected under the Deposit Protection Act 2016.
The SBP spokesperson clarified recent media reports that suggested deposits exceeding Rs500,000 were at risk. They affirmed the safety of deposits due to the sound regulatory framework and the financial health of the banking sector, characterised by strong profitability.
In the first half of CY23, the banking sector reported profitability of Rs284 billion, marking a 125% increase compared to the same period in CY22. This surge in earnings has further fortified banks’ capital positions, with the Capital Adequacy Ratio (CAR) reaching 17.8% by June 2023, surpassing SBP’s minimum regulatory requirement of 11.5% and international standards of 10.5%.
The Deposit Protection Corporation (DPC) offers insurance coverage of up to Rs500,000 per depositor, as per global best practices. Deposit protection is utilised by supervisory authorities worldwide to safeguard depositors’ funds in the unlikely event of a bank failure. The DPC ensures immediate access to insured funds, with remaining deposits recoverable through a regulated resolution process.
Published in The Express Tribune, October 6th, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
1734899716-0/image-(15)1734899716-0-270x192.webp "trade war between us and china round two")
1734899549-0/image-(16)1734899549-0-270x192.webp "productive structure and income distribution")
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ