Personal account deposits rise Rs190B to Rs2.83T

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Personal account deposits rise Rs190B to Rs2.83T

A hefty amount of Rs190 billion has been deposited in the personal accounts of the banking system during the first three months of 2022, mainly due to high interest rates and removal of tax on cash withdrawal.

According to the bank deposits data released by the State Bank of Pakistan (SBP), the deposits of personal accounts surged to Rs2.83 trillion by the end of March 2022, compared with Rs2.64 trillion by the end of December 2021.

Sources in the banking system said that the rise in deposits in personal accounts was phenomenal, as the deposits in other individual accounts such as salaried and businesses remained flat.

In fact, the overall deposits of individual bank accounts recorded a decline to Rs9.417 trillion by the end of March 2022, compared with Rs9.443 trillion by the end of December 2021.

The sources said the deposits in personal accounts had witnessed a gradual increase since the removal of withholding income tax on cash withdrawal from July 1, 2021.


Through the Finance Act, 2021, the withholding tax on cash withdrawal under Section 231A of the Income Tax Ordinance, 2001 was omitted. Under this section, the banks were required to collect 0.6 per cent on cash withdrawal of Rs50,000. The banks were making this deduction on behalf of the Federal Board of Revenue (FBR). However, the banks stopped this exercise after omission of this section on July 1, 2021 onwards.

The sources also said the deposits of personal accounts were also rising because of better return on investment following an increase in the key policy rate. The State Bank during September-December 2021 raised the key policy rate by 2.75 per cent to 9.75 per cent from 7 per cent.

The deposits under the category of personal accounts are likely to grow further, as the central bank aggressively hiked the key policy rate by 2.50 per cent to 12.25 per cent in its policy announcement on April 7, 2022, the sources said.

They attributed the increase in deposits of personal accounts to conversion of bearer national prize bonds.

The government initiated the documentation of money invested through prize bonds. In the first phase, the government has withdrawn bearer prize bonds with denominations of Rs7,500, Rs15,000, Rs25,000 and Rs40,000.

The last date to convert or exchange the bearer prize bonds was March 30, 2022. However, the date has been extended to June 30, 2022.


The government has prohibited the encashment of bearer prize bonds. However, the bond holders have been given certain options. Transferring the equivalent amount of bonds directly to a bank account is one of the options. — Shahnawaz Akhter


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