Karachi, October 16, 2023 – Official data released on Monday has revealed that bank deposits in Pakistan have achieved an unprecedented milestone, reaching a new record high of Rs 26.32 trillion by the end of September 2023.
The State Bank of Pakistan (SBP) reported a remarkable 18 percent growth in bank deposits, as they surged from Rs 22.82 trillion one year ago to the current Rs 26.32 trillion. This substantial increase underscores the resilience of the banking sector amid challenging economic conditions.
Additionally, the data showed a modest 0.8 percent rise in deposits when compared to the preceding month, August 2023, when the total deposits stood at Rs 26.11 trillion.
The surge in bank deposits can be primarily attributed to the record high interest rates in Pakistan. The central bank has kept the benchmark policy rate at an unprecedented 22 percent, attracting individuals and businesses to deposit their capital with commercial banks.
The high interest rates have led to a scenario where many businesses are hesitant to embark on new ventures due to the cost of borrowing. Instead, they opt to secure their capital in bank deposits, as it offers a safer and more stable option in the prevailing economic climate.
As bank deposits continue to reach new heights, they not only signify a preference for capital preservation but also serve as a barometer of economic stability in a nation where fiscal uncertainties have been a significant concern in recent years. The role of banking institutions as safe havens for savings has become increasingly vital in turbulent economic times.
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