Monday 26-Jan-2026: State Bank of Pakistan (SBP) made an announcement to reduce average Cash Reserve Requirement for Banks from 6 percent to 5 percent this was stated by Governor State Bank Jameel Ahmed, during a press conference following the monetary policy announcement.
This move is going to greatly help banks in Pakistan to improve their capacity of lending to private sector which will ultimately support private sector growth. Banks in Pakistan are required to maintain a certain proportion of their demand and time liabilities in the form of Cash Reserve in a Current Account maintained with SBP. These funds do not generate any returns of the banks and SBPs decision to reduce CRR rate will provide additional liquidity to the banks which can be used to finance private sector credit.
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