In a major move to provide ease of doing business and expand investment avenues for mutual funds, the Securities and Exchange Commission of Pakistan (SECP) has allowed mutual income funds to invest in “A” or above rated banks.
This permission will substantially expand the range of banks, where the income funds can make deposits, thus enabling funds to negotiate better returns for their unit holders, said a press release issued here. It is pertinent to mention here that the ‘A’ category banks are categorized as ‘Stable’ by the State Bank of Pakistan (SBP). Earlier, the mutual/income funds could only make investments in A+ rated banks and Development Finance Institutions (DFIs).
