SBP Removes Guaranteed Profit for Savings Accounts Above Rs10 Million

The State Bank of Pakistan (SBP) has introduced major regulatory changes to savings account profit rates and the newly launched Invest Pak Digital platform, a move that is expected to significantly impact customers with large bank deposits.

The banks will no longer have to provide a guaranteed minimum profit rate on savings accounts worth Rs10 million (Rs1 crore) or above, according to the official circular issued by the central bank. The policy shift is likely to be good for commercial banks and bad for those with high account balances.

The SBP, however, said that banks should still pay the minimum mandated profit rate on the savings accounts that have balances of less than Rs10 million, so as to keep smaller depositors from losing any protection under the current regulations.

Invest Pak Digital Opens Direct Investment in Government Securities

The State Bank of Pakistan, in another major move, has introduced Invest Pak Digital platform for eligible investors to invest directly without the route of commercial banks.

The new facility will allow investors to buy government securities directly, thus providing an investment alternative that may yield competitive returns and lessen the dependence on traditional savings accounts.

Experts Expect Shift in Investment Trends

The new SBP policy on savings accounts is expected to reduce funding cost for banks and boost their overall profitability, say the financial experts.

They also anticipate that a portion of the investors might shift their capital from savings accounts to Pakistan Stock Exchange (PSX), Government securities and other investment options seeking better returns.

The Invest Pak Digital initiative could draw in big investors with direct access to investment instruments backed by the government, while helping the government’s borrowing needs, analysts say.

What the New SBP Savings Account Rules Mean

The revised regulations are expected to reshape Pakistan’s banking and investment landscape by:

• Removing the guaranteed minimum profit rate for savings accounts with Rs10 million or more.
• Keeping minimum profit protection intact for savings accounts with less than Rs10 million.
• Allowing direct investment in government securities through Invest Pak Digital.
• Encouraging investors to diversify into alternative investment opportunities beyond traditional bank deposits.

The new rules of the State Bank of Pakistan for saving accounts will impact investment choices of high-net-worth individuals and will allow banks to handle high-value deposits more flexibly.