Bank deposits soar to new historic high

KARACHI: Bank deposits have risen to a new historic high of Rs26.398 trillion, recording a 17.8% growth in October 2023 due to high interest rate, ARY News reported on Friday.

The banking sector deposits recorded an all-time high growth of Rs3.986 trillion in October 2023 as compared to October 2022, according to the State Bank of Pakistan (SBP).

The SBP spokesperson said that the banking sector deposits reached to a new historic high, recording a surge of 17.8% to Rs3,986 trillion. The bank deposits reached a record Rs26.398 trillion as compared to Rs22.412 trillion in October 2022.

The economic experts said that the bank deposits witnessed a rise due to high interest rate of 22%. The investors were getting better profits from the banking system due to the interest rate.

They added that investors faced difficulties after massive crackdowns on gold and the US Dollar (USD) to curb smuggling.

Last month, the central bank clarified that the Pakistan banking system is safe and sound under a robust regulatory and supervisory framework of SBP with a layer of protection through insurance cover and all the deposits were perfectly safe.

The banking system in Pakistan is adequately capitalized, highly liquid and profitable and its ability to withstand a set of severe shocks has further improved while 94% of the depositors were fully protected under the Deposit Protection Act 2016, the central bank clarified through a statement issued here.

The SBP spokesperson said that certain sections of the media, on the basis of a statement given by Deputy Governor SBP, Dr Inayat Hussain during the meeting of Senate Standing Committee on Finance and Revenue, were implying as if bank deposits above Rs500,000 in the banking system in Pakistan were unsafe.

The SBP categorically stated that the deposits were safe owing to a sound banking system in Pakistan that was working under a robust regulatory and supervisory framework of SBP while the sector was adequately capitalized, highly liquid and profitable with a low level of net non-performing loans, i.e. bad loans.