Sub Heading: IMF ask for meeting 50% of capital shortfall by end of May 2023
Karachi September 6 2022: Silk Bank Board of Directors decided to seek extension in submission of annual accounts and Annual General Meeting (AGM) for the year ended 2021 from State Bank of Pakistan.
Board of Director of the bank in their meeting held on September 3, 2022, has reviewed the status of pending Annual Accounts of the Bank for the year ended December 31, 2021, and holding of Annual General Meeting (AGM) of shareholders of the Bank for the year ended December 31, 2021.
The Board has deliberated in detail on the status of finalization of Annual Accounts of the Bank for the year ended December 31, 2021 and authorized the management to seek further direction from the SECP for holding of AGM till December 31, 2022, for approval and disclosure of Annual Accounts of the Bank for the year ended December 31, 2021.
Accordingly, the Bank has submitted its application to the SECP for seeking further direction under Section 147 of the Companies Act, 2017 for holding AGM of shareholders of the Bank for the year ended December 31, 2021. As soon as, the Bank receives feedback / response from the SECP, the Bank shall inform the PSX accordingly.
In March 2020 the capital conservation buffer (CCB) was reduced from 2.5 percent to 1.5 percent. Currently, three banks (two privately and one publicly owned) with 1.3 percent of total banking sector assets are below the regulatory minimum of 11.5 percent. If the minimum CAR would be restored to 12.5 percent, three more banks with 5.9 percent of total banking sector assets would be below the minimum. SBP guidance to restore the CCB, based on banks’ capital adequacy position as of June 30, 2022, is expected to be rolled out in 2022.
As of 31 December 2020, the Minimum Capital Requirement (MCR) stood at Rs 3.16 billion and Capital Adequacy Ratio (CAR) at -4.45 percent against the prescribed minimum limit of Rs 10 billion and 11.5 percent respectively.
IMF ask SBP to ensure that the two undercapitalized private sector banks complete the delayed first-stage recapitalization by end of May 2023 and that they enter resolution if they are not fully capitalized by end-May 2023.
The first-stage recapitalization requires the completion of capital injections, with documentation submitted to, and accepted by, the SBP to fill 50 percent of the capital shortfall calculated as of September 30, 2021, which will result in the banks achieving positive capital.
Silk Bank Limited was incorporated in Pakistan on April 04, 1994 as a Public Limited Company under the Companies Act 2017 (Previously Companies Ordinance 1984). The Bank commenced commercial operations on May 07, 1995. The bank is engaged in banking services as described in Banking Ordinance, 1962.
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