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In October 2024, with a surge of 1.47 trillion rupees in advances, banks have been aggressively lending to certain consumers to avoid penalties imposed by the banking regulator for not meeting the required Advance-to-Deposit ratio.
The ADR for the financial industry also increased to 44.2%. The State Bank of Pakistan (SBP) announced that the total advances in the sector increased by 11% month-over-month, reaching Rs. 13.77 trillion by October 2024 from Rs. 12.30 trillion in September 2024.
From an August 2024 total of Rs. 11.80 trillion, the value of advances in the banking sector increased by 497 billion, reaching Rs. 12.30 trillion in September of that year. Meanwhile, the banking sector’s ADR was 39% in October, while deposits fell somewhat to 31.11 trillion rupees from 31.34 trillion rupees in September.
The banking sector’s discouraging attitude caused deposits to fall, while reduced saving rates are a result of the deposits’ small dip.
According to the SBP’s figures, the banking sector’s investment fell to Rs. 28.9 trillion in October, down 1.7 trillion, or 5.7%, from the previous month. From 97% in September to 93% in October, the investment-to-deposit ratio dropped.
