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KARACHI: Deposits of the banking industry posted a notable growth of 16 percent. As per the latest data released by the State Bank of Pakistan (SBP), banks’ deposits increased by 16 percent to Rs 17.09 trillion in January 2021 compared to Rs 14.673 trillion in January 2020.

According to JS Global, M2 growth remained at 17 percent YoY, while Net Domestic Assets of the Banking System expanded by 14 percent YoY during the same period.

Deposits were broadly parked in investments, which grew by 37 percent YoY, given higher investments in government securities and widening Investment to Deposit ratio (IDR) to 67 percent. Resultantly, government borrowings from scheduled banks expanded by 46 percent YoY, keeping borrowings from SBP at unchanged levels from the same period last year.

Gross Advances of scheduled banks continued to increase by a sluggish pace of 4 percent YoY in January 2021, to reach Rs8.47 trillion; where growth in credit to private sector was also limited to 4 percent YoY. The sector's ADR further declined to 50 percent, from 56 percent in Jan 2020.

Copyright Business Recorder, 2021