State Bank of Pakistan (SBP) Governor Jameel Ahmed has urged 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 growth.
Speaking at the 11th Pakistan Banking Awards 2026 in Karachi, the governor said Pakistan’s economy had shown resilience during FY26 despite domestic and external challenges, including severe floods, geopolitical tensions and uncertainty in global trade.
Ahmed said 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 also continued to rise and exceeded the end-of-June target of $18 billion.
The SBP governor said banks’ total assets had reached Rs. 69 trillion, while deposits stood at Rs. 43 trillion at the end of June 2026. He said banks remained profitable and their capital adequacy ratios were comfortably above international and domestic regulatory requirements.
However, Ahmed said 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 also pointed to the country’s high currency-to-deposit ratio and urged 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 said, would support financial inclusion while giving banks a more diversified and stable source of funding.
The governor also called for greater private sector lending, noting that credit penetration in Pakistan remains significantly below that of comparable emerging markets. He said the ratio of bank credit to the private sector relative to GDP has declined substantially over the past three decades.
Ahmed said government financing needs alone did not explain the decline, as several emerging economies with higher levels of domestic government debt still maintain significantly higher private sector credit to GDP ratios. He therefore urged banks to shift their business models toward mobilizing more deposits and expanding financing to private businesses.
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