SBP reacts on media reports of unsafe money above Rs 5 lakh in Pakistani Banks
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State Bank of Pakistan, while providing clarification, stated that Pakistan's banking system is stable and the deposit system is secure. There is sufficient capital in Pakistan's banking system, and the capability to withstand severe challenges in the banking sector has further improved.
In their explanatory statement, the State Bank mentioned that under a robust legal framework, the banking system is stable, and there has been an approximately 125% increase in the benefits of the banking system. The Deposit Protection Corporation (DPC) has also increased its protection measures.
The State Bank stated that the DPC provides insurance coverage for deposits up to 500,000 rupees. In case of a bank's failure, insured funds are immediately available to depositors. After the regulatory process, the remaining deposit amounts can also be retrieved.
The Deputy Governor of the State Bank stated that only deposits up to five hundred thousand rupees are legally protected in banks.
During a briefing in the Senate Standing Committee on Finance under the chairmanship of Saleem Mandviwalla, it was explained that no additional accumulated amount beyond 500,000 rupees is secured, whether a bank goes bankrupt, collapses, or fails. Funds exceeding 500,000 rupees in an account are not protected.
Deputy Governor of the State Bank further stated that 94% of account holders with deposits up to 500,000 rupees, only 6% of account holders have a bank balance exceeding 500,000 rupees. Depositors with accounts up to 500,000 rupees can claim compensation through the Deposit Protection Corporation.
