September 15, 2023
Banking Pakistan

Govt Borrows Almost Five Times More From Banks In July-January

The PMLN-led coalition government borrowings from banks swelled over 377 per cent to Rs1,398 billion during the first seven months of the current fiscal year compared to Rs293bn in the same period last year.

The bank advances to the private sector plunged 49.5 per cent during the July-January period of 2022-23, suggesting an economic slowdown.

Amid revenue shortfalls, the PDM government kept borrowing aggressively from banks through treasury bills and Pakistan Investment Bonds (PIBs) auctions to meet its growing expenditures at very high-interest rates.

The banks are parking their maximum liquidity in the government papers to earn record risk-free profits as high as 17.9pc, hence are reluctant to take a risk to extend loans to the private sector at high markup rates.

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