Primarily in informal sector, the microfinance industry is now being nurtured in formal sector. The Microfinance Ordinance, 2001, supported by SBP’s dedicated prudential regulations, provides the legal and regulatory framework for microfinance banks, which is consistent with the best practices.
The purpose of the required reserve is to provide appropriate liquidity of the banking sector and accomplish the global financial stability in the country. One of the most significant changes in monetary policy which is related to required reserve will start as of 01 June.