Private sector borrowing through banks went up by 80 per cent in the first eight months of the current fiscal year, reflecting accelerated economic activities in the country.
According to a local media report based on data released by the State Bank of Pakistan (SBP), the private sector borrowed Rs352 billion during July to Feb 19, FY21. This was 80.5pc higher than the borrowing of Rs195bn made during the same period in FY20.
Bankers said the first quarter of the new fiscal was largely under the negative influence of Covid-19 which appeared in March 2020 but the borrowings started from the second quarter of FY21.
However, the pace of borrowing rapidly increased during the last three months. The previous fiscal year was badly damaged by the pandemic and the private sector almost stopped borrowing in the last quarter of FY20. So far the private sector borrowing has increased by Rs157bn or 80.5pc till Feb 19 from July 1.
The private sector borrowing was just Rs196.3bn for the entire FY20.
So far the private sector borrowing from Islamic branches of conventional banks was Rs95.2bn compared to 94bn in the same period of last fiscal.
Despite higher borrowing by the private sector, the government also borrowed heavily from the scheduled banks during the current fiscal FY21. For the first eight months of the current fiscal total
The banks’ investment in long-term investment bonds (PIBs) increased by Rs1.216tr to Rs14.102tr during the first half of FY21.