SBP raises minimum capital requirement for banks, DFIs

October 28, 2026 (MLN): The State Bank of Pakistan (SBP) has raised the minimum capital requirement (MCR) for banks and development finance institutions (DFIs), setting it at Rs20 billion for locally incorporated banks, including the Islamic banking subsidiaries of banks, and Rs10 billion for DFIs, with existing banks and DFIs required to meet the new levels by December 31, 2030.

In a circular dated October 27, 2026, addressed to the presidents and chief executives of all banks and DFIs, the central bank said the increase takes into account the higher operating costs of establishing and managing financial institutions on a sustainable basis.

The new requirements cover both new and existing banks, foreign bank branches and DFIs, and revise earlier instructions in BSD Circular No. 19 of September 5, 2008, BSD Circular No. 7 of April 15, 2009, and BPRD Circular No. 10 of October 17, 2014.

Foreign banks operating in branch mode in Pakistan must maintain assigned capital, net of losses, of at least Rs5bn if they have up to five branches, and at least Rs10bn if they operate between six and 50 branches.

The SBP also allowed statutory reserves created under Section 21 of the Banking Companies Ordinance, 1962, to count towards the MCR, in addition to the items already prescribed under BPRD Circular No. 06 of 2013.

Statutory reserves counted towards the MCR cannot be withdrawn without the SBP’s prior approval. All other instructions on the subject remain unchanged.

Copyright Mettis Link News