Bank Lending to Government Surpasses Rs 44 Trillion

Pakistani commercial banks have dramatically increased lending to the government, with outstanding loans crossing Rs 44 trillion by June 2025. This spike follows the government’s withdrawal of a policy that had previously mandated a minimum advance-to-deposit ratio (ADR) of 50%; banks, wanting to avoid penalties tied to that rule, aggressively extended credit—primarily through treasury bills and bonds which led the investment-to-deposit ratio (IDR) to reach 103%. With the ADR now lowered to 38.1%, private-sector lending has taken a steep hit, as banks shifted focus toward risk-free government securities.