Savings banks have been under severe strain because of their exposure to the weak real-estate industry, with eight suspended because of their poor finances.
The Financial Services Commission said it asked the finance ministry to allocate 500 billion won ($472 million) from next year's budget to restructure the distressed sector.
The request requires governmental and parliamentary consent.
In March parliament, as part of efforts to prop up the sector, approved the creation of a special fund, that would be handed up to 15 trillion won until 2026 to help suspended banks cover deposit withdrawals and asset deficits.
The commission said some eight trillion won of the fund is currently usable. It plans to put back the 2026 deadline if additional funding is required.
Eight savings banks have been suspended so far this year because of inadequate liquidity after soured real-estate project financing swelled the sector's bad debt.
The suspensions did not threaten the overall financial sector but fuelled anger among small depositors, especially after claims that wealthy clients were tipped off in advance about the shutdowns so they could withdraw funds.
To ease market worries, the commission has assessed the finances of other savings banks to see whether they are healthy enough for government support. Eligible players will be decided in September.
Copyright APP (Associated Press of Pakistan), 2011