The bank deposit to GDP ratio in Pakistan has fallen to its lowest level. The State Bank of Pakistan (SBP) shared this in its latest report.
The data shows that even though more people now have bank accounts, savings have not increased. In 2015, only 16 percent of adults had bank accounts. By 2023, this number had reached 64 percent. Yet, the bank deposit to GDP ratio fell from 36.9 percent in FY21 to 31.9 percent.
SBP said most new accounts are used for payments and daily transactions, not savings. The central bank linked the weak deposit growth to uncertainty in the economy and low returns on deposits.
Many people and businesses now save their money in gold, property, or other assets instead of banks. This has slowed the flow of long-term deposits that help investment and business growth.
The report said that taxes on bank withdrawals and transactions also discourage people from saving in banks. This problem especially affects small businesses and low-income groups the most.
Some people also avoid banks for religious reasons. A 2015 Knowledge, Attitude, and Practices (KAP) survey showed that about 7.5 percent of respondents did not use conventional banking due to interest-based banking.
SBP said the growth of Islamic banking could attract more depositors and improve savings rates. It added that encouraging regular saving habits is key to improving deposits and supporting long-term economic growth.
