Mere snarling would not work

Commercial bankers would tell you they are being prudent and conservative on depositor's money if you tag them lazy. Many a bankers BR Research met opined they would rather keep the current asset composition than go for aggressive private sector lending. The deposit costs are low, spreads sizeable, so there is hardly a need to fix it when it ain't broke.
But is this what banks are supposed to be doing is another question and more often than not the answer will be dodged. The central bank all this while has been busy (doing nothing). The focus has been on pumping more liquidity to facilitate government borrowing. Reportedly, the regulator has woken up from the slumbers and gave a pep talk to the bankers, just recently.
The idea thrown on the table is that banks would not be allowed to have gross spreads over 4.5 percent. Not only that, the SBP has also threatened to impose return on deposits at 2 percent over and above the discount rate. The intent appears to have the gains shared with the depositors as well, at a time when banks are minting money, and risk-free at that.
But how often do thundering cloud rain? Seldom. This has sadly been the story of SBP of late as banks have formed such a clout that they feel they can do away with anything. And the SBP too has hardly ever gone beyond mere threats. While the merits of such decisions could be debatable, there has to be a way to make banks do what they are supposed to do.
The SBP head has also reportedly shown his dissent over banks ATM facilities, which receive countless complaints from customers across the country. Even in the past, banks had been warned to improve their service, but it fell on deaf ears. This time around, sterner actions are needed.
While we are at it, the efficacy of monetary policy also needs to be discussed. It has been quite a while since the monetary policy has literally become nothing more than just interest rate policy. Surely there is much more to monetary policy than merely adjusting the interest rates. How often has the SBP used the other available monetary policy tools? Sadly, not very often!
Recall that windfall gains have been made, courtesy the governments never ending borrowing appetite. Countries around the globe take this opportunity and levy windfall taxes on such practices. Will the federal government have the guts to do just that? Or will the banks might again prove to be too hard to challenge. The jury is out. Sooner than later we would know if it is just a threat to bite or does the federal government actually have teeth. Will a government, which is overly dependent on banks, tax them on the SBPs advice?