Pakistan launches InvestPak Portal, eyes to reduce govt reliance on banks

Finance Minister Muhammad Aurangzeb said on Monday the government intends to gradually reduce its reliance on commercial banks for financing by broadening access to government securities through digital investment platforms.

Speaking at the launch of the State Bank of Pakistan’s InvestPak Portal, Aurangzeb termed the portal the “beginning of a new era of investment”.

The central bank launched the InvestPak Portal as a digital investment platform designed to streamline and digitise the process of investing in government securities for both individual and corporate investors.

Aurangzeb said diversifying the government’s investor base was a key policy objective, alongside accelerating Pakistan’s digital transformation.

“From the government’s perspective, is diversification,” he said.

The finance minister said the government had just met with bank chief executives to discuss expanding credit to the private sector, but noted that excessive government borrowing from banks had long been a concern.

“One issue that always comes up is whether the government borrows too much and whether there is a crowding-out impact. There may be some aspect to that as well,” Aurangzeb said. Therefore, the government wanted to diversify its funding sources “away from” the commercial banks.

“The more we diversify away from the banks… and especially those of you sitting here from the NBFI industry. I think it’s about time that you now step up,” he said.

“It makes sense from your business models and asset-liability management (ALM) models that you also start thinking about how you can get into this discussion and help.”

Aurangzeb added that Pakistan remained overly dependent on banks to finance government borrowing and that broadening the investor base would ultimately support economic growth.

“We have too much reliance on the banking sector for government borrowing. Over a period of time, we need to diversify so that the banks have the capacity and the willingness to actually come in and do what they need to do in terms of the private-sector lending,” he said.

He also described technology as a key enabler of financial inclusion, saying digital platforms could make investing “faster, cheaper and better” while democratizing access to investment.

The finance minister noted that Pakistan had witnessed a sharp increase in equity investor participation over the past 12 to 18 months.

“While we have seen encouraging growth in equity investments, we have lagged in the fixed-income segment. This initiative will help move us in the right direction.”