No banking crisis in sight: ICCI president

President Islamabad Chamber of Commerce and Industry (ICCI), Muhammad Ijaz Abbasi on Sunday said there was no banking crisis in the country and called upon the business community and general public not to withdraw cash from banks just on rumours because such moves badly hurt trade and industry.
In a statement issued here, he lamented that the past week has been a trying one for bankers and financial managers in Pakistan as rumours circulated of a possible freeze in foreign currency accounts and sealing of safe deposit lockers in banks had a negative effect on the general banking business in the country. ICCI President said the financial sector in Pakistan is one of the best in the region, which is evident from the sound financial health of our banking industry, which has been reaping phenomenal returns since last few years.
However, he called upon the State Bank of Pakistan to come out with a clear cut and comprehensive strategy to alleviate such rumours and speculations about banking industry so that the business community and the general public could come to know the factual position as in the absence of a timely and accurate information, people remain in the dark and go panicky on false news.
Muhammad Ijaz Abbasi stressed upon the government to take urgent steps to improve the macro economic indicators of the economy and try to narrow down the current account deficit which has caused the rupee slide, creating an incentive for depositors to opt for the dollarisation of their rupees.
He cautioned that in such a shaky economic scenario, where the line between fact and rumour is increasingly blurred, a dramatic increase in rupee withdrawals may cause events to spiral out of control.
ICCI President, however, lauded SBP initiative to lower the cash reserve requirement for banks from nine percent to seven percent and inject 100 million dollars to improve liquidity in the banking sector. He opined that seasonal spike in withdrawals around Eid can be a contributing factor to the extreme liquidity crunch in the banking sector in recent days and emphasised upon SBP to inject more dollars in banks to improve the situation and to restore the sinking confidence of depositors.
He appealed to all stakeholders not to pay any heed to rumour mongering being done by some unscrupulous elements for achieving their ulterior motives as our banking system is stable and safe against foreign banks' weaknesses. He said that our country has come out of bigger crisis situations and though some small banks may be facing liquidity issues, but expressed his hope that the crisis is not of such magnitude that any one of our banks might go bankrupt.