KARACHI - Scores of the account holders of the banks, who drew billions of rupees from the banks a few days ago amid fear of default, have rushed back to the banks to deposit money back into their accounts, The Nation learnt on Wednesday. Bankers disclosed that during the past few days, numerous account-holders of different banks have returned the money back to the banks, which they had drawn in panic two weeks ago. The State Bank of Pakistan's decision of boosting the liquidity position of the banks by slashing the Capital Requirement Ratio and Statutory Liquidity Ratio had infused confidence in the customers of the banks and wiped out the speculations of default or freezing of the lockers or foreign currency accounts, a banker said. He said the timely action of the central bank has not only pre-empted outflow of deposits from the banks, but motivated the depositors to rush back to the banks to surrender the money into their accounts. Bankers said that during one-week of speculations, the customers of the bank drew over 100 billion rupees from their accounts while countless lockers were emptied by the owners. Interesting to note is that a few depositors, who drew money from their accounts and ornaments from their lockers, were deprived of their cash and valuable by the outlaws, bankers said. They were of the opinion that the account-holders of the banks must have confidence in the banking system and support the banks and their country during critical time. In order to meet scheduled banks' cash with drawl demand and ensure a prudent liquidity profile of the banking system, the central bank had introduced several rounds of liquidity injections.     In addition to  the decision to reduce CRR by 200bps and exempt 1 year & above time deposits from SLR requirement, State Bank of Pakistan (SBP) has decided to prescribe a maximum Advances to Deposit Ratio (ADR) of 70%. The deadline to achieve this is Mar 31, 2009. The central bank in tandem lowered the Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) to infuse almost Rs 270 billion liquidity which is more than the withdrawal of deposits in the system. The State Bank has advised the banks to act prudently in sharing the liquidity in the system and ensure that call rates reflect the fundamentals in the money market. According to SBP Governor, the central bank on its part has injected regular liquidity in the financial system and since August 2008, conducted thirteen (13) OMO injections and injected temporary liquidity in excess of Rs 300 billion and banks have been facilitated effectively on discount window. The recent liquidity pressures in the banking system of Pakistan and surge in the interbank lending rates mainly pertained to a combination of seasonal factors (cash withdrawal for Eid and beginning of commodity finance season) and decline in foreign currency inflows. SBP said it is further working at individual bank level to ensure that each institution is positioned to tackle the emerging challenges. Moreover, the central bank is also exploring avenues to ease the bank specific liquidity constraints. The banks have been advised by the SBP  to launch more aggressive efforts to mobilize deposits besides expanding their outreach in rural areas.    State Bank of Pakistan had also maintained that Pakistan's banking system from July 2007 to September 2008 did not face any liquidity problems.  SBP said it ensured the capital adequacy ratio of the banking system is strong i.e. 12.1 percent (in June-08) - well above the internationally acceptable minimum requirement of 8 percent. Also, core capital constitutes about 80 percent of the total capital and Tier 1 to risk weighted assets ratio of the banking system is at 9.7 percent - well exceeding the 4 percent minimum international standard. As of October 4, 2008, the balance sheet footing of our banking system is around Rs5.1 trillion while loans and deposits of the banking system are around Rs2.8 trillion and Rs3.8 trillion respectively. Meanwhile, capital market analysts said the fresh wave of mergers within the local banking and financial entities would strengthen the banking sector and also encourage the fresh tide of foreign investment to rescue country's deteriorating foreign exchange reserves. The new possible deal of complete acquisition or a sale transaction for share purchase of a local commercial bank by the foreign-led financially-viable group would provide capital inflow to the financial sector, said the analyst. Despite going through a deep liquidity crisis, the local financial sector remains attractive for foreign investment, he said, adding the acquisition ventures would ease balance of payments and fiscal pressures as well.