KARACHI: Banking sector credit to the private sector has shown improvement, as different commercial banks issued loans of Rs 271.72 billion to businessmen and industrialists as of February 17, State Bank of Pakistan (SBP) reported on Tuesday.
The improvement of credit issued to private sector showed a yearly growth of 37.8 percent after a long period since the start of the current financial year 2011-12. The volume of loans was recorded at Rs 197.068 billion in the same period.
The government borrowing from banking system was seen uncontrolled, as it increased to Rs 818.505 billion so far for the budgetary support as against Rs 333.205 billion, showing a whopping increase of 145 percent.However, the government has released an amount to central and commercial banks as repayment of the loans it borrowed in the past.
The government has borrowed Rs 176.273 billion from the central bank for budgetary support from July to February 17 as compared with Rs 91.463 billion loan transferred to it in the same period of last financial year, up 92.7 percent. The borrowing from central bank was seen under control from the government side that caused the stability of discount rate in the recent monetary policy. Moreover the government’s borrowing from commercial banks has been unabated particularly through treasury bills (T-bills) since the start of the current fiscal year.
Its borrowing from the commercial banks stood at Rs 642.231 billion from July to February 17, which is 165 percent higher than the amount of previous year, which saw accumulation of Rs 241.742 billion loan.Analysts said that the government would continue borrowing from the banking system to support fiscal operations. The government’s borrowing has already crossed the limit of Rs 308 billion that it set for the commercial banks in the current fiscal year. It will continue auctions of T-bills and loans from banks are going to be a major factor in destabilising the macro-economic indicators of the country. – Dailytimes