The State Bank of Pakistan (SBP) has firmly negated media claims suggesting that bank deposits exceeding Rs500,000 might be at risk. Addressing the concerns, an SBP spokesperson emphasized that customers’ deposits remain “perfectly safe.”
Based on comments made by SBP Deputy Governor Dr Inayat Hussain at a Senate Standing Committee on Finance and Revenue meeting, some media outlets have been leading consumers to believe that larger deposits are vulnerable. The bank wants to set the record straight: Pakistan’s banking system stands on a strong foundation, benefitting from the SBP’s rigorous regulatory and supervisory framework.
The Strength of Pakistan’s Banking System
Elaborating on the robustness of the country’s banking system, the spokesperson highlighted its capital adequacy, profitability, high liquidity, and the minimal presence of net non-performing loans.
Assurance from the Deposit Protection Corporation
Further reinforcing the safety net, the Deposit Protection Corporation (DPC) provides an insurance cover of up to Rs500,000 for every depositor. Aligned with global standards and best practices, this deposit protection is a crucial safeguard for depositor funds in the rare event of a bank’s failure. In such an unfortunate occurrence, the DPC ensures immediate availability of the insured amount to depositors. Importantly, any funds beyond this insured sum can also be reclaimed as the distressed bank undergoes a regulated recovery process.
Closing on a reassuring note, the spokesperson stated that the current framework fully protects 94% of depositors under the Deposit Protection Act of 2016.
