Bank deposits hit all-time high of Rs25.6tr

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KARACHI: Bank deposits continued to grow and jumped to an all-time high of Rs25.6 trillion by the end of June 2023, the annual report of the Deposit Protection Corporation (DPC) showed on Friday. Correspondingly, the volume of eligible deposits for protection under the DPC scheme recorded a net increase of Rs1.8tr to Rs14tr, which is 55 of the total bank deposits by the end of June. “However, the year-on-year trend revealed a slowdown in the pace of deposit mobilisation during FY23 as compared to FY22,” said the report. The DPC is a subsidiary of the State Bank of Pakistan (SBP) which provides insurance to the depositors. As of June 30, 98.9 per cent of total depositors of conventional banking and 98.7pc of Islamic banking are eligible for deposit protection in case of a bank failure. In terms of value, 52pc of conventional banking and 63pc of Islamic banking deposits are eligible for deposit protection, said the report. A little over half of them are eligible for DPC’s protection scheme. “The growth of deposits decelerated to 12pc during FY23 from 15pc in the preceding year,” said the report. The increase in total deposits can be attributed to factors such as the higher rate of return offered in the wake of a tighter monetary policy stance and the expansion of banks’ branch network, it added. “While the deceleration of deposit mobilisation may be accredited to macroeconomic uncertainty, including inflationary pressures, a slowdown in the inflow of foreign remittances by Pakistani Diaspora could be another factor for the deposit deceleration,” said the report. WEB DESK