KARACHI: Bank deposits rose to Rs40.886 trillion as of June 2026, a 15.2 per cent increase from a year earlier, data from the State Bank of Pakistan showed on Thursday.
The deposits increased by 8.5 per cent month-on-month (MoM) in June.“Banking deposits grew at a faster pace than the expansion in money supply, driven by greater adoption of digital financial services and the channelling of workers’ remittances through formal banking channels,” said Awais Ashraf, director of research at AKD Securities Limited.
“This reflects the success of structural reforms implemented by the government, particularly by the Ministry of Finance through the FBR and by the SBP in strengthening the forex market,” Ashraf said.
“Deposit growth outpacing nominal GDP growth, especially when money supply growth is low, also reflects ongoing structural changes in the economy, promoting greater financial formalisation and strengthening the formal economic sector,” he added.
He noted that a majority of incremental deposits were deployed into investments, reflecting the SBP's tight monetary policy stance and the government's elevated financing requirements amid limited availability of external funding. “Although advances increased by 13 per cent YoY, the advances-to-deposits ratio [ADR] declined by 70 basis points (bps), indicating a more conservative lending approach by the banking sector.”
The banking sector’s advances stood at Rs15.273 trillion, reflecting a 13 per cent increase compared to the same period last year. On a MoM basis, advances grew by 3.7 per cent.
The banks’ investments rose to Rs42.584 trillion, a 16.4 percent year-on-year increase. Month-on-month, investments saw a rise of 6.6 per cent.The investment-to-deposit ratio (IDR) increased to 104.2 per cent in June from 103 per cent a year ago. In May, the IDR was recorded at 106 per cent. As of June, the banking sector’s ADR declined to 37.4 per cent, down from 38.1 per cent a year earlier. In May, the ADR came at 39.1 per cent.
Under the latest guidance from the State Bank of Pakistan (SBP), as of August 1, the requirement for commercial banks to provide a minimum return on most rupee savings accounts will apply only to individual depositors with a monthly average balance of Rs10 million or less.
Alongside this, the central bank has launched ‘InvestPak’, a digital platform, allowing retail and institutional investors to invest their savings directly in government securities. Previously, in November 2024, the central bank had removed the MDR requirement for financial institutions, public sector enterprises, and public limited companies. At that time, private businesses, trusts, and individuals were still receiving an MDR of the policy rate minus 1.5 percent.
Analysts see the possibility of money moving from savings accounts to other investment avenues but they do not expect any material decline in savings deposits for the banking sector because of this. In fact, in some cases, banks may even be able to negotiate a lower rate of return with such clients in return for better services, etc.
