KARACHI: On the recommendation of State Bank of Pakistan (SBP), the federal government has put KASB Bank Limited under moratorium for six months, however more than 92.33 per cent of total account holders and depositors having balance of up to Rs300,000 in their accounts will not be affected.
The Central Bank, keeping the interest of depositors and other stakeholders and due to financial health and other circumstances of KASB Bank Limited in view, appealed the federal government to take this decision. The SBP, exercising the powers conferred upon it under the Section 47 of the Banking Companies Ordinance, 1962, placed the bank under moratorium for a period of six months with effect from November 14, 2014.
Consequently, the payment of certain debts and obligations from the bank would be suspended while it would continue to receive all payments/ recoveries due to the bank. The federal government has directed the State Bank of Pakistan to consider reconstruction or amalgamation of the bank as per the provisions of the Banking Companies Ordinance, 1962 within six months.
It is the endeavour of the SBP to ensure smooth functioning of banks in the best interest of depositors. Keeping this in view, payment to the depositors of the bank having account balance of up to Rs. 300,000/- per depositor per account on the date of placing of the bank under moratorium will not be affected.
In this manner, more than 92.33pc of total account holders will be able to operate their accounts. The account holders with balance of more than Rs 300,000 as of effective date, however, would be able to withdraw up to the above permitted threshold only. The State Bank of Pakistan has always worked to safeguard the interests of depositors as well as the banking system of the country. The overall banking system is well capitalised and functioning smoothly. KASB Bank Ltd. consists of just 0.6pc of the total assets of all banks and the State Bank of Pakistan will ensure a resolution of the same in the best interest of the depositors and the banking system.