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  • State Bank says profits surged 28 percent due to govt loans

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    State Bank AFP File Photo State Bank

    State Bank of Pakistan (SBP) on Thursday has stated that banks’ profits have surged by 28 percent in the last nine months.

    The supreme bank has issued a report on progress of banking sector. The report states that lending loans to the federal government has benefited the sector a lot.

    The sector has not only progressed due to loans lent to the but also because of extensive business with customers on less interest. The report stated that it is a high time for industrial sector as owners could take advantage of the lessened interest.

    The SBP has urged different commercial banks to expand their accounts to meet loan requirements of the customers.

    Earlier on November 21, the SBP had maintained interest rate at 0.6 percent as monetary policy was announced.

    A survey conducted by  showed that at least 12 experts out of 14 were confident that SBP would maintain six percent interest rate in the monetary policy. Since the start of 2015, the supreme bank has lessened interest rate by at least 3.5 percent.

    After reduction in interest rate, private sector’s loans have gone downhill instead of a sharp rise. Statistics show that from July 2015 to October 2015, private sector has acquired loans worth Rs 13.5 billion.

    If compared, Rs 45 billion loans were drawn during the same period in the last year. On the other hand, the government has acquired Rs 487 billion from commercial banks in first four months of the Fiscal Year (FY) 2015-16 to meet expenditures.

    Experts said that the SBP could revise its policy to incline commercial banks to private sector. It should be mentioned here that average inflation percentage in the ongoing FY fell below two percent due to falling crude oil prices.

    Inflation in Pakistan has taken a downhill since December 2014.

    BP’s Board of Directors reviewed economic issues in order to set interest rate for the next two months. The board held a meeting with Advisory Committee on Monetary Policy which was followed by the decision.