KARACHI: Bank deposits increased 16 percent to Rs17.1 trillion in January from Rs14.7 trillion a year ago, the central bank data showed on Tuesday.
However, deposits fell 4.4 percent month-on-month. They stood at Rs17.8 trillion in December 2020.
The rise in the banking sector deposits is attributed to higher growth in workers’ remittances
and lower investment in National Savings Schemes.
The surging trend in the deposits also shows private businesses’ liquidity position remains strong, despite the fact that impact of the coronavirus pandemic has started lowering and economic activity picks up.
The increase in remittances from overseas Pakistani workers (in dollar terms) may have translated into higher growth in personal deposits.
Moreover, institutional ban on NSS investment from July last year and additional scrutiny measures taken by the government have resulted in decline in investment in NSS instruments and prize bonds.
These factors have seemed to channel some funds into remunerative deposits.
The sluggish investment by the firms also pushed the deposits of private sector businesses higher.
The SBP’s data showed that bank advances grew 3.7 percent to Rs8.5 trillion in January. Investments depicted jump of 37 percent to Rs11.4 trillion
Advance to deposit ratio fell to 50 percent in January from 56 percent a year earlier.
Investment to deposit ratio rose to 67 percent in January from 57 percent in the same month of last year.
Analysts expect deposit growth in the range of 12-14 percent in 2021, while advances are seen growing around 4-6 percent.