ISLAMABAD – With a major overhaul of Pakistan’s borrowing strategy, the federal government announced plans to gradually reduce its reliance on commercial banks by opening government securities to a wider pool of investors through new digital investment platform.
The move is a gradual shift as government borrowing needs remain large and banks will likely stay dominant for now due to their scale and liquidity. Fresh data shows continued heavy bank reliance in practice, with some reversal toward bank borrowing in parts of FY26, and with these structural reforms supporting private-sector-led growth, fiscal sustainability, and less vulnerability to bank liquidity squeezes.
Launching State Bank of Pakistan’s (SBP) InvestPak Portal, Finance Minister Muhammad Aurangzeb called the initiative start of “new era of investment”, saying it would transform the way the government raises funds, deepen financial inclusion and free up banks to finance businesses instead of the state.
The fully digital platform enables both individual and corporate investors to invest directly in government securities, eliminating cumbersome procedures and broadening access to fixed-income investments. FinMin said diversifying the government’s funding base is of paramount importance, acknowledging that Pakistan relied excessively on commercial banks to finance its fiscal needs for years.
Aurangzeb admitted that persistent government borrowing from banks fuelled concerns over “crowding out” of private businesses by tying up bank liquidity that could otherwise support investment, industrial expansion and job creation. He said existing financing model is no longer sustainable if Pakistan wants to accelerate economic growth.
He further urged non-bank financial institutions (NBFIs) to play much bigger role in financing government’s borrowing requirements. He said their business models and asset-liability management frameworks make them well-positioned to absorb a larger share of sovereign debt, reducing pressure on commercial banks.
He argued that broadening investor base would allow banks to redirect more capital towards businesses and entrepreneurs, strengthening private-sector lending and unlocking new avenues for economic expansion. Aurangzeb said digital platforms can make investing faster, cheaper and more accessible, enabling ordinary Pakistanis to participate in government securities while promoting financial inclusion on a much larger scale.
The finance minister pointed to surge in equity market participation over the past 12 to 18 months, calling it a positive sign for Pakistan’s capital markets. However, he noted that the fixed-income segment has failed to keep pace, expressing confidence that the InvestPak Portal would help bridge that gap by bringing government securities within easier reach of retail and institutional investors alike.
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