KARACHI: The State Bank of Pakistan has scrapped the minimum deposit rate requirement on trusts, private limited companies, and individual accounts holding more than Rs10 million, freeing banks to price roughly Rs4.5 trillion in deposits however they see fit.
A fresh central bank circular removes the last leg of a rule that once forced banks to pay policy rate minus 1.5 percent on these accounts. The SBP had already scrapped MDR for financial institutions, public sector enterprises, and public limited companies back in November 2024. This latest move closes the loop entirely.
Sources told Focus Pakistan that the timing isn’t accidental. The government recently pulled the plug on the Telegraphic Transfer Charges Incentive Scheme, a subsidy that once compensated banks for channelling remittances through official routes. Losing that scheme leaves banks staring at more than Rs70 billion in costs they’ll now have to absorb elsewhere and the MDR removal looks like Islamabad’s way of handing them a new revenue lever to plug that gap.
SBP Minimum Deposit Rate
Here’s what’s actually on the table. Private and public limited companies held Rs7.1 trillion in deposits as of December 2025, roughly a fifth of the entire banking sector’s deposit base. Trusts added another Rs814 billion. Individual accounts crossing the Rs10 million mark brought Rs5 trillion more into the mix. Run those numbers through the industry’s typical 43 percent savings-account ratio, and banks suddenly have freedom to reprice somewhere between Rs3.5 trillion and Rs4.5 trillion in deposits without any regulatory floor holding them back.
Minimum Deposit Rate Pakistan
Do the math on savings, and the payoff looks substantial: shaving even 50 to 100 basis points off what banks pay on these accounts could generate anywhere from Rs20 billion to Rs45 billion in extra income industry-wide enough to meaningfully offset, though not fully erase, the remittance-cost hit banks are now absorbing.
Not every bank benefits equally, though. The real winners will be lenders with strong affluent-banking franchises the prestige, priority, and premium banking arms that cater to wealthy depositors. HBL sits at the front of that pack, running its HBL Prestige platform for roughly 133,000 clients holding Rs386 billion in deposits. UBL, Meezan Bank, Bank Alfalah, and Askari Bank run comparable offerings, putting them in the same position to capture pricing flexibility on their premium clientele.
There’s a twist in the data, though. Deposits above Rs10 million actually shrank 3 percent between June and December 2025, even as industry-wide deposits grew 6 percent over the same stretch. Sources tracking the trend told Focus Pakistan the drop lines up with the government’s decision to fold interest income above Rs50 million into the normal tax regime and that money appears to be migrating straight into mutual funds instead of sitting in bank accounts.
Pakistan Banks Deposit Rates
Based on deposit mix and retail exposure, HBL, UBL, Meezan Bank, Bank Alfalah, and MCB look best positioned to capture the upside from this rule change, though how much actually flows to the bottom line will hinge on how aggressively each bank chooses to reprice and whether affluent depositors, savvy enough to shop around, decide to stay put or walk.
