SBP Urges Banks to Boost Retail Deposits and Private Sector Lending

State Bank of Pakistan (SBP) Governor Jameel Ahmed has pressed banks to reorient their business models toward stronger retail deposit mobilization and greater private sector financing, saying the banking sector has a key role to play in Pakistan's next phase of sustainable economic expansion.

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• Foreign exchange reserves additionally continued to rise and exceeded the end-of-June target of $18 billion.
• The governor additionally called on greater private sector lending, noting that credit penetration in Pakistan remains significantly below that of comparable emerging markets.
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Speaking at the 11th Pakistan Banking Awards 2026 in Karachi, the governor remarked Pakistan's economy had shown resilience during FY26 despite domestic and external challenges, including severe floods, geopolitical tensions and uncertainty in global trade.

Ahmed remarked inflation had remained close to the medium-term target range, inflation expectations were broadly anchored and the current account deficit remained near the lower end of the projected range. Foreign exchange reserves additionally continued to rise and exceeded the end-of-June target of $18 billion. Pakistan's Crypto Czar Eyes $400 Million Remittance Savings Through Stablecoins.

In practice, the SBP governor remarked banks' total assets had reached Rs. While deposits stood at Rs, 69 trillion. 43 trillion at the end of June 2026. He remarked banks remained profitable and their capital adequacy ratios were comfortably above international and domestic regulatory requirements.

Nevertheless, Ahmed stated there was considerable room to strengthen financial intermediation, noting that Pakistan's banking assets and deposits remain relatively low as a share of GDP compared with other emerging markets. He additionally pointed to the country's high currency-to-deposit ratio and called on banks to reduce reliance on cash.

He encouraged banks to compete more actively for retail deposits by offering attractive returns along with quality services. A stronger retail deposit base, he remarked, would backing financial inclusion while giving banks a more diversified and stable source of funding.

Meanwhile, the governor additionally called on greater private sector lending, noting that credit penetration in Pakistan remains significantly below that of comparable emerging markets. He remarked the ratio of bank credit to the private sector relative to GDP has declined substantially over the past three decades.

As a number of emerging economies with higher levels of domestic administration debt still maintain significantly higher private sector credit to GDP ratios, ahmed remarked administration financing needs alone did not explain the decline. He therefore pressed banks to shift their business models toward mobilizing more deposits and expanding financing to private businesses. Stay Connected with ProPakistani.

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Taken together, the developments around SBP Urges Banks to Boost Retail Deposits and Private Sector Lending point to a situation that is still moving, and the coming days should bring more clarity.