Bank de­posits touch Rs 9.4tr

The Pak Banker - - FRONT PAGE - Muham­mad Yasir

Pak­istan's bank­ing in­dus­try de­posits con­tinue to grow as it surged to Rs 9.408 tril­lion, show­ing an in­crease in liq­uid­ity of com­mer­cial banks and de­posits of bank­ing cus­tomers of var­i­ous sec­tors. Ac­cord­ing to the State Bank of Pak­istan (SBP), the de­posits of all banks grew to Rs 9.408 tril­lion in Jan­uary 2016 com­pared to Rs 9.305 tril­lion recorded in De­cem­ber 2015.

The growth in de­posits wit­nessed that money is com­ing to bank­ing sys­tem af­ter its sea­sonal out­flows to the dif­fer­ent sec­tor of the econ­omy hence the de­posits started show­ing growth in the bank­ing in­dus­try.

Riaz Ri­azud­din, Deputy Gov­er­nor of State Bank of Pak­istan (SBP) ex­plained about bank­ing de­posits growth say­ing the sea­sonal out­flow wit­ness ev­ery year af­ter Septem­ber since a de­posits are with­drawn for in­vest­ment in agri­cul­ture and dif­fer­ent sec­tor.

Hence the de­posits of banks de­creased for three to four months which re­turns to bank­ing sys­tems from mid of Novem­ber, and con­tin­ued to in­crease till July, he added while speak­ing on the oc­ca­sion of re­cen an­nounce­ment meet­ing of mon­e­tary pol­icy.

Riaz said the im­pact of with­hold­ing tax on the banks de­posits could not be ruled out but it has not hurt over­all bank­ing in­dus­try de­posits and dy­nam­ics.

In­vest­ments reg­is­tered strong growth to reach Rs6.81 tril­lion in Jan­uary as banks con­tin­ued to in­vest in risk-free govern­ment se­cu­ri­ties. The in­vest­ment num­ber stood at Rs 6.72 tril­lion in the month of De­cem­ber 2015.

There are strong ex­pec­ta­tions for bullish ad­vances growth ow­ing to strong prospects from the ini­ti­a­tion of China-Pak­istan Eco­nomic Cor­ri­dor (CPEC), which started re­flect­ing in the in­dus­try as banks ad­vances grew to Rs 4.84 tril- lion in Jan­uary 2016 as com­pared to Rs 4.78 tril­lion recorded in De­cem­ber 2015. Ac­cord­ing to Min­istry of Wa­ter & Power, out of the to­tal US$46bil­lion, US$28 bil­lion projects are to be com­pleted by 2018, which may in­volve fi­nanc­ing of power and in­fra­struc­ture projects by Chi­nese and lo­cal banks. This cou­pled with other planned power sec­tor projects are likely to trig­ger higher ad­vance growth go­ing ahead.

Bank­ing sec­tor an­a­lysts sug­gested that th­ese projects will gen­er­ate an ad­di­tional credit de­mand of US$2 bil­lion an­nu­ally dur­ing the next 3-years, which is equiv­a­lent to 5% of the to­tal ad­vances of the in­dus­try.

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