March 16, 2020: In view of the emerging situation from COVID-19 pandemic, the State Bank of Pakistan (SBP) is continuously engaged with the industry to understand issues and challenges and formulate a policy response accordingly.
In this vein, SBP has conducted a flash survey covering all banks, Development Financial Institutions (DFIs) and Micro Finance Banks (MFBs). The survey results show that the industry has started to take preventive measures to limit the adverse repercussions. However, the results also indicate diversity among the industry participants in terms of their readiness to handle any worst-case scenario.
1. Banks/DFIs/MFBs are, therefore, advised to adopt the following measures to help fight the spread of Coronavirus (COVID-19) and to ensure availability of uninterrupted financial services:
- Create awareness amongst the banks/DFIs/MFBs’ staff and customers regarding COVID-19;
- Implement the guidelines issued by the World Health Organization, the Government of Pakistan and the Provincial Governments, in letter and spirit, to ensure the safety and health of employees and cleanliness at the workplace;
- Take precautionary measures such as enhanced usage of cash counting machines, encouraging customers to use Alternate Delivery Channels (ADCs) etc. to reduce contact with currency notes and other financial instruments. Further, make elaborative arrangements to provide uninterrupted financial services through ADCs (e.g. ATMs, online banking, transactions through call centers etc.);
- Reassess Business Continuity Plans (BCPs) in the existing situation and develop suitable remedial plans, including allocation of human and other resources, for their effective implementation;
- Carry out an impact analysis to assess the consequences on business and operations and enhance the monitoring frequency of key risk areas like credit, capital market and foreign exchange exposures; and
- Reach out to the key payment and settlement system partners such as NIFT, 1Link, NCCPL and CDC to ensure continued availability of their services.
2. In order to implement the above instructions and take other necessary measures, a senior level committee should be established to ensure that the banks/DFIs/MFBs’ responses towards risks arising out of COIVID-19 are robust and adequate.