Private sector retires 48pc bank debt in a month

Banks have taken back about 48 per cent of the money they lent to the private sector within a month, indicating that the private sector has no plans to enter the market with new ideas or ventures. From July 1, 2024, to Jan 17, 2025, the private sector borrowed Rs1.398 trillion from banks, but most of the lending in the last two months of CY2024 (Nov and Dec 2024) was carried out by banks to avoid the penalty for failing to maintain a 50 per cent advance to deposit ratio (ADR). The latest SBP data shows that rapid withdrawal of money lent to the private sector was a temporary arrangement to avoid the payment of tax. It also shows that the private sector is not ready with projects to utilise money lent to it by banks. Up to Jan 17, 2025, the total lending to the private sector was Rs1.398 trillion, but it fell almost by half to Rs742bn on Feb 24.