Keeping large sums of money in savings accounts may no longer be as rewarding as before after the State Bank of Pakistan introduced key regulatory changes.
The State Bank has revised the rules governing profit on savings accounts and the new Invest Pak scheme. The central bank notified banks and customers of the changes through a circular.
Under the revised regulations, banks are no longer required to offer a guaranteed minimum profit rate on savings accounts with balances of Rs10 million or more.
The State Bank has also allowed large investors to invest directly in government securities through the Invest Pak Digital platform. This means investors can bypass banks and purchase government securities directly.
Experts say the move will reduce banks’ funding costs and improve their overall profitability. They also expect some large depositors to shift their money from bank savings accounts to the stock market and other investment avenues in search of better returns.
They added that investors could earn more attractive returns by lending directly to the government through the Invest Pak platform.
What does this mean for a common salaried person?
If a common salaried person is keeping less that Rs10 million in his/her saving account, these changes are not applicable to them.
The minimum profit requirement will continue to apply to savings accounts with balances below Rs10 million, according to the notification.
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