On Thursday, the State Bank of Pakistan (SBP) rebuffed reports suggesting that bank deposits above Rs500,000 in the banking system are unsafe.
In a statement, the central bank said: “Certain sections of the media, based on a statement given by Deputy Governor of SBP, Dr Inayat Hussain, during the meeting of Senate Standing Committee on Finance and Revenue, are implying as if bank deposits above Rs500,000 in the banking system in Pakistan are unsafe.”
“It is categorically stated that the deposits are safe owing to a sound banking system in Pakistan under a robust regulatory and supervisory framework of SBP.”
The rebuttal comes after Dr Inayat Hussain said only deposits up to Rs0.5 million are protected by the Deposit Protection Corporation (DPC), a subsidiary of the SBP, and that as per regulations, deposits above this amount are not covered if a bank goes bankrupt.
Responding to the remarks, which irked the masses, the SBP said the banking system in Pakistan is sound, and insurance cover of up to Rs500,000 for every depositor is an added layer of protection provided by the DPC.
It said the banking network in Pakistan is adequately capitalised, highly liquid and profitable with a low level of net non-performing loans, i.e. bad loans.
