Pakistan bank deposits double to Rs40.83tr in 4 years, but lending to govt raises growth concerns

According to Business Recorder, deposits held by Pakistan's scheduled banks rose to Rs40.83 trillion in September 2026, nearly doubling from Rs21 trillion four years earlier. Dr Gohar Ejaz, a former minister who chairs Pakistan Economic Policy and Business Development, said the deposit base grew by Rs19.83 trillion between September 2022 and September 2026. His remarks reopened the debate over whether that money reaches productive economic activity.

Ejaz argued that money mobilised by banks should reach businesses and industry, since sustainable growth relies on productive activity rather than government borrowing. The report notes that a larger pool of deposits could back industrial expansion, investment and job creation, yet deposits alone do not ensure more private-sector credit. The central task, it says, is converting that base into finance for firms that want to grow, upgrade plants or hire.

Heavy borrowing by the state from banks can put private borrowers in competition for the same pool of money. Banks may favour government securities over business loans depending on returns and risk, and smaller firms typically pay more to borrow and must meet stricter collateral demands. A sustained move toward government paper could tighten credit for businesses and weigh on the private sector's contribution to growth.