The State Bank of Pakistan (SBP), the country’s central bank, has doubled the Minimum Capital Requirement (MCR)—the lowest capital a bank must keep—for new and existing banks. For locally operating banks, including Islamic banking subsidiaries, the floor rises from Rs10 billion to Rs20 billion.
SBP said the change reflects higher costs of setting up and running financial institutions on a sustainable basis. The revised framework also covers foreign bank branches and Development Finance Institutions (DFIs), specialised lenders that fund longer-term development projects.
New capital floors by institution type
Foreign banks that operate in Pakistan through branches must keep minimum assigned capital, net of losses, of Rs5 billion if they have up to five branches. Those with between six and 50 branches must hold Rs10 billion. DFIs must meet a Rs10 billion MCR under the same revised rules.
Existing banks and DFIs have until 31 December 2030 to reach the higher levels. That long runway means the higher bar is not an overnight shock for institutions already in the market.
How statutory reserves can count
SBP said statutory reserves created under Section 21 of the Banking Companies Ordinance 1962 can be included in MCR, on top of items already allowed under BPRD Circular No. 06 of 2013. Reserves counted toward MCR cannot be withdrawn without the central bank’s prior approval.
Broker research house Arif Habib Limited (AHL) noted the same reserve treatment in its research note. AHL estimates that the listed banks it covers still hold large capital buffers—about Rs50 billion on average—and does not expect a material change in dividend payouts. It also warned that new entrants, especially smaller banks with thinner statutory reserves, may need more capital to meet the new MCR.
What happens next
Banks and DFIs will need to plan capital retention or fresh injections so they clear the higher floor by the 2030 deadline. For most large listed banks, AHL’s assessment points to comfortable buffers and stable dividends for now. For would-be new banks and smaller players, the doubled local-bank requirement raises the entry and growth cost of banking in Pakistan.
Aasan alfaaz mein
State Bank ne banks ke liye Minimum Capital Requirement do guna kar di hai—ab local banks ko Rs20 arab rakhna hoga, pehle Rs10 arab tha. Purane banks aur DFIs ko December 2030 tak yeh had poori karni hai. Bari listed banks ke paas abhi bhi bohot capital buffer hai, is liye dividends par bada asar nahi socha ja raha. Naye aur chhotay banks ke liye capital jama karna mushkil ho sakta hai.
