23. Another area where there is scope for strengthening financial sector stability is greater credit diversification. Over 50% of the bank credit portfolio is concentrated in corporate sector serving fewer industries. Diversification of bank’s loan portfolio to support more retail and infrastructure financing will be critical for the growth of banking sector.
SBP needs to develop its capacities to monitor financial position and probability of default of the corporate and household sectors within the stability framework. 24. Cognizant of maturity mismatches, SBP has introduced different cash reserve requirements (CRR) for demand and time liabilities to encourage banks to mobilize long term deposits.