Deposits are “perfectly safe” in Pakistan, the State Bank of Pakistan assured the public on Thursday, praising the country’s robust banking system.
The statement by the central bank comes after several media outlets claimed that deposits greater than Rs500,000 in the banking sector were at risk.
Each depositor is now insured for up to Rs500,000 by the Deposit Protection Corporation (DPC), a wholly-owned subsidiary of the SBP.
“Deposit protection is one of the key elements of safety net used by supervisory authorities and deposit protection agencies around the world to provide protection to the depositors’ funds in the unlikely event of a bank failure.”
The central bank also said that in the event of a bank failure, depositors would have rapid access to the DPC-insured amount.
The remaining deposits are recoverable as well, as the troubled bank is handled with the help of regulatory authorities. The Deposit Protection Act of 2016 currently provides full protection for 94% of depositors.
During a meeting of the Senate Standing Committee on Finance and Revenue on Wednesday, SBP Deputy Governor Inayat Hussain stated that depositors’ cash was legally protected up to Rs500,000.
He had previously stated that the maximum deposit was Rs250,000 and that this sum was sufficient to satisfy 94% of all DPC deposits with the SBP’s subsidiary.
To ensure that customer deposits are covered by the deposit protection mechanism, the country’s deputy governor stated that all scheduled banks operating in the country must be members of the DPC.
