Pakistan Banking Assets Surpass Rs69 Trillion After Decades

Pakistan’s banking sector has experienced substantial expansion over the past five decades, with total monetary assets increasing from less than Rs25 billion in the early 1970s to more than Rs69 trillion by 2021, according to a report released by Gallup Pakistan based on data from the State Bank of Pakistan.

The study, titled “Long-Run Pakistan Analysis on Financial Development Structure (1970–2021)”, examines the long-term transformation of the country’s financial system from a predominantly cash-driven economy into a significantly expanded banking network.

According to the findings, currency in circulation rose from approximately Rs5.4 billion in 1972 to more than Rs7.3 trillion by 2021, reflecting a steady increase in monetary activity across the economy.

Deposits held with scheduled banks also recorded significant growth, rising from Rs19.2 billion in 1972 to over Rs13 trillion by 2021. The report notes that deposit mobilisation accelerated notably after the early 2000s, supported by banking sector reforms, technological advancements and broader access to financial services.

Foreign exchange reserves, including gold holdings, expanded from roughly Rs3.1 billion in 1972 to about Rs3.9 trillion by 2021, although these reserves fluctuated periodically in response to changing external economic conditions.

Commenting on the findings, economist Sana Tawfik of Arif Habib Limited observed that the sustained growth in Pakistan’s monetary aggregates over the past fifty years demonstrates a broader trend of financial deepening alongside economic expansion. She further noted that increased remittance inflows and phases of relatively high interest rates also contributed to the rise in bank deposits.

The report also highlights a growing concentration of deposits and credit within accounts holding balances exceeding Rs1 million, a pattern that has become increasingly pronounced since 2010.

Despite this growth, the analysis indicates that financial inclusion challenges persist, as a significant portion of small savers and borrowers remain outside the formal banking system while cash-based transactions continue to dominate many segments of the economy.