The central bank has decided to publish bank-wise data on the Excess Cash Reserves (ECR) maintained by the banks over and above the minimum required Cash Reserve Requirement (CRR).
The move, the State Bank said, is aimed at incentivizing the banks that, the regulator believes, would bring more efficiency in their money market operations.
The central bank said this data would be disclosed with a lag of about one month; and would help in differentiating between the relative performances of various banks in their money market operations.
The bank observed that the ECR not only adversely impacts smooth functioning of the interest rate corridor but also has implications on the banks’ own liquidity management.
“The SBP expects that dissemination of this data will bring more transparency and efficiency in the domestic money market,” said the bank.
The said data on bank-wise ECR would be placed online on the SBP’s website.
It may be pointed out that the State Bank has been publishing the consolidated weekly data on ECR of the banks since December 2011 to bring more efficiency in the latter’s money market operations. “The above mentioned decision of SBP is in continuation of that initiative,” the regulator added.