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State Bank Removes Profit Rate Floors for Certain Deposit Accounts

Today, the State Bank of Pakistan (SBP) announced that deposits held by financial institutions, public sector organizations, and public limited companies will not be subject to the Minimum Profit Rate requirement.

The bank said in a circular day, “Please refer to BPRD Circular No. 05 of 2014 dated May 27, 2014, and BPRD Circular No. 07 of 2013 dated September 27, 201,3 on the above subject.”

Additionally, the minimum rate of return that banks were required to provide on deposits was adjusted by the central bank in September 2013.

With this change, all savings accounts denominated in Pakistani Rupees are now required to pay a minimum profit rate that is 50 basis points lower than the current SBP Repo Rate (Interest Rate Corridor – Floor).

In addition, when the SBP Repo Rate is changed, the authorized changes to the Minimum Profit Rate will take effect on the first day of the next month.

Financial institutions, PSEs, and public limited businesses are no longer subject to this profit rate, according to the most recent revision by SBP.

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Huma Ishfaq

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