Photonews Logo Photonews logo
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Azad Jammu Kashmir
    • Balochistan
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
    IShowSpeed Daniel La Belle race
    Videos

    IShowSpeed Beats Daniel La Belle in 40-Meter Race, Hits 41M Subscribers

    June 24, 2025 2 Min Read
    Cardi B new single Outside
    Videos

    Cardi B’s ‘Outside’ Single Sparks Buzz Over Offset and Stefon Diggs

    June 20, 2025 2 Min Read
    Squid Game Season 3
    Videos

    Squid Game Season 3: Final Trailer Unveils Epic Plot

    June 14, 2025 2 Min Read
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Reading: Banks invest 96pc money in govt papers
PhotoNews Pakistan PhotoNews Pakistan
Font ResizerAa
Search
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Balochistan
    • Azad Jammu Kashmir
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Have an existing account? Sign In
Follow US
© 2022 Photonews. All Rights Reserved.
PhotoNews Pakistan > Business > Banks invest 96pc money in govt papers
Business

Banks invest 96pc money in govt papers

Web Desk
By Web Desk Published June 19, 2015 3 Min Read
Share
SHARE

Karachi: Flow of banks’ investment in government securities has reached 96 per cent mark of their total investible funds, revealed the State Bank’s first quarterly report for the calendar year 2015.

The report shows that the banks kept investing in the government papers despite decline in the interest rates and return.

According to the report, banks invested Rs644 billion in the government papers in Jan-March, an increase of 81pc compared to Rs356bn in the same quarter of last year.

However, a vital change in the banks’ investment strategy was witnessed — they put more money for short-term compared to long-term investment.

Since the end of 2014, the long-term Pakistan Investment Bonds (PIBs) lost their attraction due to declines in returns on the back of frequent fall in the interest rates.

The sharp fall in the main inflation forced the State Bank to cut interest rate to a 42-year low of 7pc in the last monetary policy.

The auction held on June 17 noted that the cut-off yield on three-year PIBs fell to 8.09pc, while the yield on five-year tenor was 8.99pc. Most of the amount (Rs41bn) was invested for three-year papers, followed by Rs9bn in five-year tenor, indicating that the banks tilted for short-term papers.

Banks invested Rs222bn in PIBs for the first quarter compared to Rs759bn in the same period of last fiscal year. However, they invested Rs387bn in the treasury bills in the Jan-March quarter compared to withdrawal of Rs382bn a year earlier.

The difference on returns on three-year PIBs (8.09pc) and 12-month T-bills (6.82pc) has shrunk to 1.27 percentage points with the fall in interest rates. Bankers said it is visible that engaging money for three-year PIBs is a loss-making business while investing in 12-month T-bills provides much better opportunity for the use of money.

The SBP report said the mix of government securities, which changed considerably in favour of PIBs during July-Dec 2014, again started to tilt towards MTBs due to consecutive decline in policy rate.

“Given the risk-averse approach of banks, decelerated flow of advances due to both demand and supply factors and expectations regarding cut in policy rate, the amount offered by banks’ for both MTBs and PIBs exceeded the target value by considerable margins.”

Further, most of these investments were placed in Available for Sale (AFS) category from the perspective of liquidity management.

However, the banks failed to change their approach towards market economy and are still waiting for a better chance to place most of their liquidity in the government papers.

Another SBP report showed that credit off-take by the private sector in this fiscal year fell sharply compared to last year.

Share This Article
Facebook Twitter Pinterest Whatsapp Whatsapp LinkedIn Email Copy Link Print
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

HBL Saving Made Easy
HBL Saving Made Easy

Recent Posts

Diogo Jota

Liverpool to Pay Diogo Jota’s Remaining 2 Years Contract to Family

Shadab Khan Shoulder Surgery

Shadab Khan Undergoes Successful Shoulder Surgery

Seine River Swimming

Paris Seine River Opens for Public Swimming for First Time Since 1923

Post Archives

More Popular from Photonews

Daniil Medvedev Wimbledon 2025
Sports

Daniil Medvedev Suffers Shock Wimbledon First-Round Exit to Benjamin Bonzi

3 Min Read
Turkiye Opposition Mayors Arrest
Top NewsWorld

Turkiye Arrests Opposition Mayors in Graft Prob

3 Min Read
Bajaur Bomb Blast
Khyber Pakhtunkhwa

Bajaur Bomb Blast Kills Five, Injures 11 in Khyber Pakhtunkhwa

2 Min Read
Pakistan

Mobile Service Suspended in Several Cities on 9th Muharram

On July 5, 2025, Pakistan implemented robust security measures for Muharram 9, suspending mobile phone and…

July 5, 2025
PakistanTop News

Pakistan and China Plan New Regional Bloc to Replace SAARC

On June 30, 2025, reports emerged that Pakistan and China are advancing plans for a new…

June 30, 2025
Sports

Pakistan vs India Asia Cup 2025 Clash Set for September 7 in Dubai

Indian media reports that Pakistan and India will face off in the much-anticipated 2025 Asia Cup…

July 2, 2025
Pakistan

Pakistan Mandates Asset Declarations for Senior Civil Servants in 2025

On July 5, 2025, Pakistan’s federal government mandated public asset declarations for civil servants in Grade…

July 5, 2025
PhotoNews Pakistan

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Categories

  • World
  • Pakistan
  • Punjab
  • Sindh
  • Khyber Pakhtunkhwa
  • Balochistan
  • Azad Jammu Kashmir

 

  • Top News
  • Business
  • Entertainment
  • Sports
  • Videos
  • Tech
  • Offbeat
  • Blog

© 2024 Phototnews
All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?