The State Bank of Pakistan (SBP) has canceled the banking license of the Industrial Development Bank Limited (IDBL) following its liquidation due to insolvency. The central bank made this announcement in a notification issued by the Banking Policy and Regulations Department, formally ending IDBL’s status as a licensed financial institution.
The SBP’s decision was made under the authority of Section 27 (4) of the Banking Companies Ordinance, 1962. According to the notification, IDBL’s banking license, which was issued on November 29, 2012, has been officially canceled as of February 2, 2024, due to the bank’s liquidation.
In addition to the cancellation of its banking license, the SBP also directed the de-scheduling of IDBL under Section 37(2)(d) of the State Bank of Pakistan Act, 1956. The bank’s de-scheduling took effect from February 2, 2024, following its financial collapse.
IDBL’s insolvency and liquidation mark the end of its operations as a developmental bank in Pakistan. Established to promote industrial development and investment, IDBL had struggled in recent years due to financial instability, weak governance, and rising liabilities.
The SBP’s cancellation of IDBL’s banking license is part of its broader mandate to ensure the stability and soundness of the country’s financial system. By removing insolvent banks from the system, the SBP aims to protect depositors and maintain confidence in the banking sector.
This move also reflects the central bank’s focus on regulatory oversight and its commitment to strengthening the financial sector through proactive measures. The SBP has been vigilant in monitoring the financial health of banks operating in Pakistan, and the cancellation of IDBL’s license is a reminder of the importance of sound governance and financial management in maintaining a sustainable banking operation.
The liquidation of IDBL marks a significant moment in Pakistan’s banking history, as it underscores the need for continued reforms to ensure that banks remain solvent and capable of supporting economic growth.