The State Bank of Pakistan (SBP) on Monday quelled rumors regarding weak financial conditions of some of the banks and reiterated that the ‘banking system of Pakistan is stable and strong.’
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in a statement issued by the central bank on Monday, the SBP said that since the imposition of moratorium on KASB Bank Ltd, rumors are being spread that the financial condition of some banks is weak and they may also face supervisory action. “These are also being accompanied with misleading information attributed to State Bank of Pakistan (SBP)”, it said.
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The SBP further said that it has taken strong notice of such misinformation and it is clarified that no such information has been circulated through media nor it has been placed on SBP’s website.
The public need not to pay attention to such rumors, which are trying to undermine the overall stability and performance of the banking system, the press release said. To strengthen the banking system, the SBP had set certain milestones for enhancing banks’ capital base, which are being achieved satisfactorily, it stated. “The SBP is regularly engaged with banks for capital improvement. Consequently, equity base of the banking system was increased by 11 percent to above Rs 1,000 billion in September, 2014 from Rs 900 billion in September 2013.”
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It further said that the banking sector’s performance has been quite impressive. “The banking sector is the second largest sector in terms of market capitalization and dividend payouts among the companies listed on the stock exchanges.” The capital position of the banking system will further strengthen due to expected fresh capital inflows and improving profitability, the SBP said. The continuous improvement in capital base of banks clearly contradicts the rumors currently circulating in the media, the press release concluded. -APP