KARACHI, May 30: The State Bank of Pakistan has introduced a minimum profit rate of 5 per cent per annum on all categories of savings/PLS saving deposits, including any other profit bearing deposit with no fixed maturity.

The rate will apply to all existing and new deposits effective from June 1, 2008.

In a circular issued to the presidents/chief executives of all commercial banks on Friday the SBP said that the profit payable on savings/PLS savings deposits would be calculated on at least the minimum monthly balances, regardless of bank’s own minimum balance requirements.

However, banks are free to pay profit rate on daily product or on average balance basis.

Nevertheless, the minimum floor profit rate on all savings/PLS saving deposits will be 5 per cent per annum, the circular said.

The central bank warned that any violation of the new instructions would render the bank liable for punitive action under the relevant provisions of the Banking Companies Ordinance, 1962.