State Bank of Pakistan (SBP) Governor Jameel Ahmed has urged banks to strengthen retail deposit mobilization and increase lending to the private sector, saying the banking industry has an important role in supporting Pakistan’s next phase of sustainable economic growth.
Speaking at the 11th Pakistan Banking Awards 2026 in Karachi, Ahmed said Pakistan’s economy had remained resilient during FY26 despite domestic and external challenges, including severe floods, geopolitical tensions and uncertainty in global trade.
He said inflation had remained close to the medium-term target, while inflation expectations were broadly anchored. The current account deficit also remained near the lower end of the projected range, while foreign exchange reserves continued to improve and exceeded the end-June target of $18 billion.
According to the SBP governor, the banking sector’s total assets reached Rs. 69 trillion, while deposits stood at Rs. 43 trillion at the end of June 2026. He added that banks remained profitable and maintained capital adequacy ratios comfortably above both domestic and international regulatory requirements.
However, Ahmed said there was significant room to improve financial intermediation in Pakistan. He noted that banking assets and deposits remain relatively low as a percentage of GDP compared with other emerging markets.
The governor also highlighted Pakistan’s high currency-to-deposit ratio and called on banks to reduce the economy’s reliance on cash.
Ahmed urged banks to compete more actively for retail deposits by offering attractive returns and better-quality services. He said a stronger retail deposit base would promote financial inclusion while providing banks with a more diversified and stable source of funding.
The SBP governor also emphasized the need for greater private sector financing. He said credit penetration in Pakistan remains significantly lower than in comparable emerging economies, with the ratio of bank credit to the private sector relative to GDP declining substantially over the past three decades.
Ahmed said government financing requirements alone could not fully explain the decline, pointing out that several emerging economies with higher levels of domestic government debt still maintain considerably higher private sector credit-to-GDP ratios.
He therefore called on banks to rethink their business models and focus more on mobilizing retail deposits and expanding lending to private businesses.
The shift, he said, would help strengthen financial intermediation and enable the banking sector to contribute more effectively to sustainable economic growth in Pakistan.
