Bank Loans to Private Sector Plummet By Over 86%

Total bank loans to the private sector clocked in at Rs. 9.22 trillion in the current financial year 2023-24 from Rs. 9.17 trillion by the end of FY23. According to the State Bank of Pakistan (SBP), net borrowing by the private sector clocked in at Rs. 57.4 billion between July 2023 and January 5, 2024, compared to Rs. 418.9 billion reported in the same period last year, showing a decline of 86.3 percent year-on-year or Rs. 361.5 billion from last year. Conventional banking branches received Rs. 34.8 billion from the private sector from July 2023 till January 5, 2024, as compared to lending an aggregate amount of Rs. 452.6 billion in SPLY. Financing from Islamic banks declined by 85.3 percent YoY from Rs. 426 billion last year to Rs. 62.4 billion this year. Islamic banking branches of conventional banks provided credit to the tune of Rs. 29.5 billion during the period in review compared to a negative impact of Rs. 459.6 billion in SPLY. The government paid back Rs. 814 billion to the central bank from July 2023 till January 5, 2024, whereas it borrowed an amount of Rs. 2.67 trillion from scheduled banks on account of budgetary support.