Pakistan's Banking Industry makes historic record in FY 2019-20

Pakistan's Banking Industry makes historic record in FY 2019-20

ISLAMABAD - Pakistan’s banking industry’s deposits reached an all-time high at Rs. 14.63 trillion by the end of 2019.

High-interest rates helped commercial banks offer attractive saving rates to the customers on saving accounts or saving certificates. Some of the commercial banks promoted the Term Deposit Certificate of various periods, which provides profits on a monthly basis. Resultingly, a large number of customers turned to banks for secure profits on their savings.

So far, commercial banks have offered up to a 13 percent profit on saving on a monthly or quarterly basis which is slightly less than the profit rate offered by Mutual Funds and National Saving Certificates.

The banking industry’s deposit reserves surged to Rs. 14.4 trillion earlier in June 2019 however it failed to maintain its value due to the outflow of deposits by customers due to various reasons. One of the biggest reasons was the Federal Board of Revenue (FBR), which is now monitoring customers’ bank accounts.

A majority of customers with savings less than the value of Rs. 0.5 million regained their confidence in the banking system with no fear of tax authority on their money as far as they are fulfilling their requirements.

In the last month of 2019, banks with their aggressive drive mobilized a whopping Rs. 320 billion in order to meet their yearly deposit targets set by their management.

In 2019, the overall deposits of banking industry grew by 9.5 percent compared with the deposits of Rs. 13.3 trillion by the end of 2018, showing an increase of Rs. 1.27 trillion in a year.