IT is hard to believe that the commercial banks operating in the country managed to lend to the private sector at a record level compared to the average of the last three years. They achieved a 50 per cent advance-to-deposit ratio (ADR); up from 38pc in just four months. The banks have done a marvellous job, and their efforts need to be applauded and appreciated.

Having said that, one wonders, if they could achieve such a target in a mere four months to avoid the incremental tax imposed by the government, why they could not expand their lending portfolio to the private sector in earlier years.

It has further been reported that as against a drop of 1.6pc in deposits, the banks were able to lend Rs1.35 trillion to the private sector from July 1 to Dec 6, 2024. Again, one wonders how this massive lending has failed to translate into matching economic activity in the country.

Just when one was wondering about all these things, came the report ‘Businesses repay banks Rs440bn in a fortnight’ (Feb 13). One wonders what is actually happening. It is hoped and assumed that there was no fudging in numbers, and the banks did not indulge in any kind of window dressing. But there is no harm in initiating a full-scale process of due diligence to ensure that the reporting by the banks was fair and transparent.

Muhammad K. Sufi
Islamabad

Published in Dawn, April 10th, 2025