Banking Sector Records Rs 35 Trillion Deposits, Up 14.1%

Pakistan's banking sector recorded a significant milestone in June 2025, with total deposits crossing Rs 35 trillion, marking a 14.1% year-on-year (YoY) increase, according to data released by the State Bank of Pakistan (SBP) . This trend signals strengthening financial inclusion, improved liquidity, and rising public confidence in the country’s banking system.

• Total deposits: Rs 35.5 trillion in June 2025 (Rs 31.1 trillion in June 2024) – up 14.1 % YoY 

• Advances (loans & financing): Rs 13.5 trillion – up 8.7 % YoY

• Investments: Rs 36.6 trillion – jumped 21.2 % YoY

These figures highlight a banking system rich in liquidity, with strong growth in both loan disbursement and investment activities.

• Economic stability: SBP’s policies and inflation control measures increased saver confidence.

• Government reforms: The Uraan Pakistan plan & banking modernization incentives have encouraged account use 

• Digital banking boom: Internet banking users jumped 30% annually; mobile transactions surged 86%.

• Retail and Islamic banking: Exposure to Islamic financial products grew 24% annually over the past years 

• The loan growth of 8.7% YoY indicates cautious lending amid macroeconomic sensitivity.

• Lower ADR (38.1%) compared to regional peers suggests banks have excess capacity to expand private credit 

• Regulatory ADR tax rules may be motivating banks to maintain a conservative lending stance.

• Investment-to-deposit ratio breaching 100% suggests banks are deploying surplus liquidity into government securities.

• Consistent with a long-term rise in investment portfolios—e.g., Rs 14.4 trillion in January 2022.

• Higher IDR ensures profitability but may limit credit to the private sector.

Financial inclusion: With deposits rising, more individuals are entering the formal financial system.

Liquidity cushions: Stores of cash help banks weather macroeconomic uncertainty.

Public trust: Strong deposit trends show customer confidence.

The Rs 35 trillion deposit milestone reflects a banking sector grounded in public trust, operational stability, and rising financial inclusion. However, with a low advance-to-deposit ratio and heavy reliance on government investments, banks face pressure to balance profitability with support for the private sector. SBP’s policies, along with reforms under the Uraan Pakistan initiative, set a favorable stage for the next wave of credit expansion, digital innovation, and inclusive banking growth. As strategic adjustments unfold, this sector stands poised to play a central role in Pakistan’s economic transformation.