By the conclusion of August 2023, commercial banks have witnessed anunprecedented surge in deposits, reaching an astounding Rs26.1 trillion.This remarkable uptick is primarily attributed to the prevailing highinterest rates within the country.
According to recently updated data from the State Bank of Pakistan (SBP),the banking industry’s deposits experienced a substantial growth of Rs.3.95 trillion, marking an 18 percent increase compared to the Rs. 22.15trillion recorded during the same period in the previous year. Furthermore,when juxtaposed with the Rs. 25.7 trillion from July 2023, bank depositsregistered a 1.6 percent rise, equating to Rs. 408 billion in August.
Throughout August, bank advances displayed notable expansion, climbing by 8percent to reach Rs. 11.8 trillion, while investments surged by animpressive 21 percent, settling at Rs. 22 trillion. This robust performanceis reflected in the Investment-to-Deposit Ratio (IDR), which saw anincrease to 84.3 percent in August, up from 82.1 percent the previous year.
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However, in contrast, the Advance-to-Deposit Ratio (ADR) for banks duringthis period exhibited a decline, slipping to 45.1 percent. This shifttowards a higher IDR is primarily driven by the subdued demand for privatesector financing, a consequence of the challenging macroeconomic conditionsstemming from the central bank’s stringent monetary policies.
