Karachi, March 11, 2026 – The State Bank of Pakistan has reported that large-scale cash withdrawals wiped out Rs790 billion from the country’s banking system in a single month, highlighting continued liquidity movement among depositors.
According to SBP data, the total deposits in Pakistan’s banking system fell to Rs36.64 trillion by January 31, 2026, down sharply from Rs37.43 trillion in December 2025, which had marked an all-time high for deposits in the country.
Reasons Behind the Cash Outflow
Financial analysts identified several factors contributing to the massive withdrawals:
1. Post-Financial-Year Cash Pull: Banks typically accumulate higher deposits in December to reflect strong annual financial statements, leading to customer withdrawals in January.
2. Ramazan-Related Buying: Traders and businesses withdraw cash in advance of Ramazan to stock up for increased demand during the month.
3. Rising Inflation: Higher prices prompted people to maintain more cash on hand for day-to-day purchases.
Despite the growing use of digital transactions and electronic payments, large-scale cash withdrawals continue to dominate, reflecting the public’s preference for liquidity during high-demand periods.
Year-on-Year Deposit Growth
While January 2026 saw a decline compared to December 2025, the banking system still recorded strong year-on-year growth. Total deposits rose from Rs31 trillion in January 2025 to Rs36.64 trillion in January 2026, indicating a robust increase despite monthly cash outflows.
Analysts say that monitoring deposit trends, cash withdrawals, and liquidity patterns remains crucial for understanding Pakistan’s financial system, especially as seasonal factors, inflation, and consumer behavior continue to influence cash movement.