KARACHI: Both electronic and paper-based deals in Pakistan’s banking sector faltered during July-September 2010, reflecting limited business activity amid higher interest rates.
The value of paper-based retail payments during the quarter under review fell by over 12 percent to Rs35.60 trillion against the previous quarter, the central bank said on Tuesday. Similarly the value of eBanking transactions went down by around 4 percent to Rs4.7 trillion.
“The yield curve is flat and there’s not much activity going on,” said Khalid Iqbal Siddiqui, Director Research at Invest and Finance Securities. “It doesn’t bode well for the banks.”
The volume and value of eBanking transactions in the country during the quarter remained 52.58 million and Rs4.7 trillion, respectively, showing a decline of 1.89 percent in volume and 3.56 percent in value. This is contrary to the previous quarter when 6.2 and 7.7 percent growth were recorded in volume and value.
The contribution of paper-based payments in total retail payment transactions was 61.2 percent in terms of volume and 88.45 percent in terms of value.
The large value payments settled through Pakistan Real-time Interbank Settlement Mechanism (PRISM), however, also fell by 6.51 percent in volume and 11.35 percent in value of transactions in comparison to the previous quarter.
The major portion of PRISM transactions, in terms of value, consisted of securities settlement, which accounted for 47 percent of the total transactions followed by Interbank Funds Transfers 37 percent and Settlement of Retail Cheques Clearing 16 percent.
The volume and value of eBanking transactions in the country during the quarter remained 52.58 million and Rs4.7 trillion, respectively, showing a decline of 1.89 percent in volume and 3.56 percent in value against 6.2 percent increase in volume and 7.7 percent rise in value during the previous quarter.
Its contribution to total retail payment transactions was 38.80 percent in terms of volume and 11.55 percent in terms of value.
The value of ATM transactions increased by around five percent, while maintaining the number of transactions at the level of the previous quarter, thus, increasing the average value per transaction to Rs8,486 against Rs8,037 during the previous quarter. The contribution of other modes of eBanking is also on the rise despite comparatively insignificant numbers and aggregates value of transactions.
The utility bills payments through available modes (ATMs, internet, mobiles, etc) of eBanking transactions are also growing.
The total value of credit cards transaction has, however, decreased by one percent against the previous quarter.
The number of cross-border transactions increased by 154 percent in volume and 19 percent in value during the quarter under review, the central bank said.