SBP calls three major banks vital for country's economic stability
The State Bank of Pakistan (SBP) has identified three major institutions—National Bank of Pakistan (NBP), United Bank Limited (UBL), and Habib Bank Limited (HBL)—as Domestic Systemically Important Banks (D-SIBs) for 2025, underscoring their critical role in safeguarding financial stability.
The classification, based on banks’
financial statements as of December 31, 2024, was made under the Framework
for D-SIBs, first introduced in 2018 and revised in 2022. The framework
aligns with global standards but is tailored to Pakistan’s financial system,
applying stricter oversight to institutions deemed vital to economic stability.
How banks are measured
Banks are assessed through size, interconnectedness, substitutability, and
complexity. Those designated as D-SIBs face tighter regulations given their
essential role in withstanding shocks and ensuring smooth financial operations.
Read More Moody's
revises Pakistan's banking sector outlook to "stable” citing profitability
Capital requirements
From March 31, 2026, NBP will be required to maintain an additional 2.5% Common
Equity Tier-1 (CET-1) capital (Bucket D), while UBL and HBL will each hold an
extra 1.5% CET-1 (Bucket C). Branches of Global Systemically Important Banks
(G-SIBs) in Pakistan must also comply with capital requirements aligned with
the Financial Stability Board.
SBP’s rationale
The central bank said the designations reflect its proactive stance on risk
management. “The identification of D-SIBs is a key element of our supervisory
framework and central to mitigating systemic risks,” it noted.
By reinforcing these banks’
resilience, the SBP aims to strengthen Pakistan’s financial sector and ensure
long-term economic stability.
Source: Hum News