close
Thursday March 28, 2024

Bank deposits grow to Rs9.4 trillion in January

By our correspondents
February 10, 2016

KARACHI: The deposits of banking system registered a healthy growth of 11 percent to reach Rs9.41 trillion in January 2016 as compared with Rs8.46 trillion in the same month of last year.

The deposits also grew by one percent when compared with Rs9.3 trillion in the previous month, according to statistics released by the State Bank of Pakistan (SBP) on Tuesday.  Analysts attributed the growth in the deposits to the recent tax scheme launched by the government to facilitate new taxpayers.

The government in the latest budget introduced 0.6 percent withholding tax on non-cash banking transactions above Rs50,000 per day. The withholding tax rate, however, was reduced to 0.3 percent on the hue and cry of the traders.

This levy had resulted in cash withdrawal from the banking system.

The scheme to document working capital for traders was launched on February 1, but in the last month the scheme was finalised and the Federal Board of Revenue (FBR) had assured that the tax deducted would be adjusted.

The growth momentum in the deposits dropped when compared with an average 14 percent growth rates during the last five years.

The analysts, however, said the scheme would further help the banks to accumulate their deposits, as according to some estimates another Rs250 billion would be documented under the scheme.

The banks’ investments registered a strong growth of 26 percent during January 2016, as banks continued to invest in risk-free government securities.

The investment of the banking system recorded Rs6.82 trillion in January 2016 as compared with Rs5.422 trillion in the same month of last year.

Investment-to-deposit ratio reached an all-time high of 72 percent to date.

Advances of the banking system grew by eight percent to Rs4.84 trillion by January 2016 as compared with Rs4.46 percent in the corresponding month of last year.