KARACHI/Islamabad - Different speculations pertaining to default, freezing of bank accounts and lockers continued to haunt the stock market, currency markets and other businesses and social circles in the country, sparked panic among the people belonging to all walks of life. Seeing a flurry of speculations, the State Bank of Pakistan moved to quell the rumours and maintained that the accounts, lockers and foreign currency of bank customers were safe and no proposal was under consideration to freeze them. The rumours were so strong that the people started calling each other and a large number of panic people even contacted their banks whether the rumours were correct and was it true that the banks were on the verge of default. Large number of worried people visited their banks and most of them even withdrew amounts from their accounts fearing that the rumours might be true and they might be in trouble. A large number of unnerved people thronged their banks in order to withdraw their money, resultantly most of the banks were compelled to close down their business activities before the scheduled closure time. In addition to that, ATMs of several banks ran out of cash as the large number of concerned people withdrew their money through ATMs. Even the officials of the bank looked affected by the rumours and had no proper answers to queries of their clients when they approached them. Shabir Zaidi, renowned economic analyst strongly rubbished the rumours and accused vested interest in floating these baseless rumours, which may adversely affect on already worsening economic situation of the country. They rejected the presumption of any liquidity crisis in the banking sector of the country. Zaidi pointed out that there were three main problems in the overall financial systems of the country out of which, continued devaluation of rupee against dollar was the main concerning matter for the current government and now the prompt solution to overcome this problem was imposing "freeze" on dollar. He said that other problems ahead for the government was continued recession in the stock markets, saying crisis in the stock markets and fear of free fall after the removal of price floor was comparatively less concerning issue, as its repercussion would not make an large-size adverse on the overall economy of the country. However, liquidity crisis in the banking sector was not a big deal for the government because the government was in position to come out of this problem easily, he added. Analysts said that rumours of Pakistan bankruptcy have been fuelled by media reports coming from United State and Europe where the government panicked by the economic meltdown poured billions of dollars to bailout reputed banks and other companies to steady the rocking economic boards of countries. They said other factors which created these rumours where home born. Constant diminishing forex reserves, collapsing stock market, terrorist attacks across the country against leading politician created uncertainty in minds of the people and thus the rumour started creating panic among the people. Though the government moved quickly to snub the rumours but those had gone beyond the control of public domain. There was no stopping of the rumours which multiplied with each passing hour. Even the appointment of renowned banker Shaukat Tarin as financial advisor to the Prime Minister failed to put a break on the galloping rumours. However, Tarin dismissed these rumours as baseless and said that there was a crisis of confidence, which ought to be dealt promptly to avert the risks to the destabilisation of the economy. The State Bank of Pakistan has categorically denied rumours regarding the freezing of foreign currency accounts and sealing of lockers at banks. Describing the rumours as totally baseless, State Bank's spokesman said that there is no such action under consideration at any level. The spokesman pointed out that foreign currency accounts are already enjoying protection under Foreign Currency Accounts (Protection) Ordinance 2001. The general public is, therefore, requested not to pay any attention to such rumours and continue their business normally, the spokesman added. An observer having close watch on stock market and financial institution disclosed that rumours initially started at the Karachi Stock Exchange that the banks were facing liquidity crisis and the SBP is going to freeze foreign currencies and lockers at the scheduled banks. A confidential meeting between SBP and top officials of leading banks in which the banker requested to reduce CRR ratio to eight percent from nine percent that may increase the liquidity of banks to 80 billions and statement issued by the SBP to ready to observe all kinds of financial shocks started the rumours, which snowballed out of proportion when it reached the floor of the KSE. SHAHBAZ RANA from Islamabad adds: Syed Ali Raza, President, National Bank of Pakistan while talking to The Nation said, "Though liquidity is tight in the market, overall banks' financial health is sound and inter-bank confidence is increasing". He said there was no chance to freeze foreign currency accounts. On a question, whether the State Bank of Pakistan would reduce the discount rate to ease liquidity position in the market, as was done by other world central banks, the NBP President said he did not foresee any such step in the near future.