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Speaking to Dawn on Thursday, Chase Securities Research Director Yousuf M. Its capital stood at Rs3.16bn against the prescribed MCR of Rs10bn at the end of 2020. Silkbank’s accumulated losses amounted to Rs20.2bn at the end of 2020, which is the last time the bank released its financial accounts. With respect to Silkbank, the commercial lender has been seeking out investors for many years now, with MCB Bank being the latest institution to have initiated its due diligence. The injection of capital against new shares is meant to fix the bank’s capital adequacy issues.Īt the end of March 2022, the bank’s paid-up capital stood at negative Rs22.6bn as opposed to the statutory requirement of Rs10bn. We will remain closely engaged with the two undercapitalised private banks and are committed to ensuring compliance with the minimum capital requirements (MCR) at the earliest,” the IMF report quoted the Pakistani authorities as saying.Īs for Summit Bank, a UAE investor became its majority shareholder in April by injecting fresh equity of Rs10bn. “We have delayed resolution because of ongoing talks with potential investors. On its part, the SBP has promised the IMF that it’ll ensure the two undercapitalised private-sector banks - presumably Silkbank and Summit Bank - enter “resolution” if they fail to get fully capitalised. The State Bank of Pakistan (SBP) should accelerate the recapitalisation process using its existing powers,” the IMF said. “Maintaining financial stability requires close oversight and swift action to address undercapitalised financial institutions. There was no consensus among analysts over the name of the last under-capitalised bank that belongs to the public sector. The IMF didn’t name names in the 120-page report, but analysts believe that three of the four undercapitalised banks include Silkbank Ltd and Summit Bank Ltd from the private sector and SME Bank Ltd from the public sector.

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In a detailed Staff Report prepared by an IMF team for the July 12 meeting of its Executive Board to greenlight the $3 billion Stand-By Arrangement (SBA), the Washington-based lender said the full impact of the economic downturn has yet to materialise even though the banking sector appears stable for now.

The resolution of a bank means restructuring a failing lender in a situation where regulators believe there’s no prospect of its recovery. KARACHI: The International Monetary Fund (IMF) has said delays in structural reforms - such as “resolving” the four undercapitalised banks - can hamper stability in the country’s financial sector.

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