KARACHI: By the end of the calendar year 2021, bank deposits had risen to a record high of around Rs21 trillion. By September 2021, bank deposits had hit an all-time high of Rs19.83 trillion.
Experts say the State Bank of Pakistan’s interest rate hike is to blame for the enormous increase in deposits.
The central bank increased the key policy rates by 100 basis points to 9.75 per cent in its policy statement announced on December 14, 2021. It was the second increase in the interest rates in less than a month. The central bank on November 19, 2021 enhanced the rates by 150 basis points.
Cumulatively, the SBP increased the key policy rate by 2.75 per cent during the last three consecutive policy announcements.
The deposits of the banking system recorded a growth of 214 per cent during the last decade to Rs21 trillion from Rs6.68 trillion by the end of the year 2012.
The advances of the banking system recorded a 19 per cent growth to Rs10.15 trillion in 2021, compared with Rs8.49 trillion in 2020.
Analysts at the Topline Securities said that advances recorded the highest growth after 2018.
The investment of the banking system witnessed a growth of 22 per cent to Rs14.12 trillion in 2021, compared with Rs11.55 trillion in 2020.