Amid media reports suggesting that deposits exceeding Rs500,000 may be unsafe in the banking system, the State Bank of Pakistan (SBP) has issued a categorical rejection of such claims.
The SBP clarified that customers’ deposits are entirely secure within the Pakistani banking system. In an official statement, an SBP spokesperson addressed concerns stemming from a statement made by SBP Deputy Governor Dr. Inayat Hussain during a meeting of the Senate Standing Committee on Finance and Revenue. The spokesperson emphasized that certain sections of the media had implied that bank deposits exceeding Rs500,000 were unsafe, which the SBP vehemently refutes.
The SBP stressed that Pakistan’s banking system enjoys robust regulatory and supervisory oversight, ensuring the safety of customer deposits. The system is characterized by adequate capitalization, high liquidity, profitability, and a low level of net non-performing loans.
Furthermore, the Deposit Protection Corporation (DPC) provides an additional layer of security by offering insurance coverage of up to Rs500,000 to every depositor. This measure aligns with international best practices and global trends. Deposit protection is a crucial component of safety nets employed by supervisory authorities and deposit protection agencies worldwide to safeguard depositors’ funds in the unlikely event of a bank’s failure.
The SBP highlighted that the amount insured by the DPC becomes immediately accessible to depositors in the event of a bank failure. Depositors can also recover the remaining amounts of their deposits through a regulatory-assisted resolution process if needed.
Currently, the Deposit Protection Act of 2016 ensures that 94% of depositors are fully protected in Pakistan, underscoring the commitment to safeguarding the interests and financial well-being of the public.
