Since SBP has a strong banking surveillance mechanism as well as regular banking inspection, the probability of banks having solvency problems is low but one cannot rule out such cases. Banks do have high exposures in loans and shares to certain companies and economic groups – often related parties – and liquidity and solvency issues could emerge despite high vigilance.
In view of this, SBP plans to develop a policy framework and guidelines for its LOLR functions. BIS Review 85/2008  9  Exit framework. A strong legal framework for bank exit is already provided for in the draft amended Banking Companies Ordinance. Under this SBP would have strong powers to intervene, reorganize or close unviable or failing banks.