KARACHI – More than Rs1 trillion have been withdrawn from commercial banks in Pakistan during the first two months of the fiscal year 2025-26.
Data released by the State Bank of Pakistan (SBP) showed a total of Rs1.035 trillion were withdrawn from the banking system in July and August 2025.
As a result, the total reserves of the banks have dropped to Rs34.46 trillion, down from Rs35.49 trillion at the close of the previous fiscal year on June 30, 2025.
Experts believe that such a large-scale withdrawal in such a short period indicates a shift in consumer behavior, with many individuals moving their funds towards alternative investment opportunities.
They attribute this shift to several key factors, including the significant reduction in interest rates and the increasingly stringent tax regulations. The central bank recently lowered the policy rate to 11%, a dramatic decrease from last year’s peak of 22%, reducing the returns on deposits. As a result, many consumers are redirecting their capital to more profitable options like the stock market, gold, and other investment avenues.
Meanwhile, the government has accelerated efforts to expand the tax base. The Federal Board of Revenue (FBR) has issued warnings against non-filers, including measures like freezing bank accounts.
This has prompted many consumers to avoid holding large sums of money in banks, further contributing to the trend of capital shifting out of the formal banking system.
