Saving account holders: FIs, NBFIs urged to consider plight

KARACHI: There has been a great demand by the business community to significantly cut the interest rate in the monetary policy saying a cut in policy rate will provide breathing space for industrial revival and job creation.

To the great surprise by experts and the business community, the State Bank of Pakistan decided to keep the policy rate unchanged at 11 percent citing concerns over a higher inflation outlook, unanticipated adjustments in administered energy prices and potential of widespread floods said Ateeq-ur-Rehman (economic and financial analyst).

Under the challenging economic conditions by the middle class surviving for safe shelter, food, medicine, education, clean water, electricity, gas, public transport etc, the banks, financial institutions and NBFIs should consider the agony and anguishes of their saving account holders, mostly senior citizens, disabled, pensioners, endowment fund holders, etc.

The reduction in interest rate is continuously reducing their income of reliance and daily bread, added Ateeq.

Again, a savings account holder for example a widow/ a non filer is payable a tax by 30 percent (WHT), further on her withdrawal of profit in cash has to pay 0.8 percent as another WHT for Rs 50,000 and above withdrawal. There is a pressure on saving account holders to convert their accounts into current accounts, so what are the compliances and benefits available through current account.

Consequently, banks & financial institutions should bring relief to the economic growth from saving prospective, particularly the industry/business and the poor saving account holders.

Copyright Business Recorder, 2025