Lending reduced by Pakistan banks to avoid
higher taxes
Lending by banks in Pakistan has
decreased by 10%, dropping from Rs. 15.66 trillion as of December 27, 2024, to
Rs. 14 trillion by February 21, 2025.
The Gross Advance to Deposit Ratio
(ADR) now stands at 46%, down from a peak of 52% in December 2024.
Read More Banks
inject record rs1 trillion into NBFIs to meet ADR targets
According to Topline Securities, the
reduction in lending was anticipated, as banks temporarily parked their funds
to meet the Gross ADR target of 50% by December 2024, a move designed to avoid
additional tax liabilities.
In contrast, financing from
commercial banks to the private sector has surged by over 250% in the current
financial year, primarily driven by a gradual decline in interest rates and
banks’ strategies to balance their advance-to-deposit ratios.
Source: Pro Pakistani