Banking Sector Advances Surge By Rs. 1.47 Trillion in October 2024

In order to avoid penalties from the banking regulator for failing the target Advance-to-Deposit ratio, banks have been aggressively lending to a segment of customers showing a jump in advances by Rs. 1.47 trillion in October 2024. The banking sector’s ADR also improved to 44.2 percent. According to data released by the State Bank of Pakistan (SBP), the sector’s total advances surged to Rs. 13.77 trillion by October, compared to Rs. 12.30 trillion reported by September 2024, showing a marked increase of 11 percent month over month. In September 2024, the banking sector advances grew by Rs. 497 billion to Rs. 12.30 trillion from advances value stood at Rs. 11.80 trillion in August. On the other hand, the deposits of the banking sector reduced slightly to Rs. 31.11 trillion in October as compared to Rs. 31.34 trillion reported in September and the ADR of the banking sector stood at 39 percent. The decrease in deposits was due to the banks’ discouraging attitude, whereas lower saving rates are attributed to the slight decline in the banking sector’s deposits. The investment of the banking sector also reduced by 1.7 trillion or 5.7 percent in October from the preceding month to stand at Rs. 28.9 trillion, according to the SBP’s data. The investment-to-deposit ratio decreased to 93 percent in October from 97 percent in September.