On October 22, commercial banks invested Rs59.86 billion in three-month T-bills, Rs470 million in six-month paper and Rs443 million in one-year paper.

The State Bank of Pakistan set the cut off yield on 3-month paper at 12.5631 per cent, 6-month paper at 12.6649 per cent and one year paper at 12.7873 per cent.

The banks have been facing liquidity shortage and call rates have gone up. The SBP has reduced the Cash Reserve Requirement to six per cent effective October 18, and will be further reduced to five per cent effective November 15, 2008.

According to the weekly statement of position of all scheduled banks for the week ended October 18, 2008, deposits and other accounts of the scheduled banks continued the downward trend and in the current week stood at Rs3,666.853 billion, lower by Rs28.347 billion over preceding week’s figure of Rs3,695.200 billion. Compared with last year’s corresponding figure of Rs3,425.952 billion, the current week’s figure is larger by Rs240.901 billion. During the current week commercial banks deposits showed a decline of Rs27.985 billion over the week to Rs3,655.703 billion, against preceding week’s Rs3,683.688 billion. Specialised banks deposits stood at Rs11.150 billion, against preceding week’s Rs11.512 billion, a fall of Rs0.362 billion.

Borrowings by all scheduled banks decreased during the week over preceding week’s figure. It declined to Rs436.978 billion over preceding week’s figure of Rs462.944 billion, a fall of Rs25.966 billion. Compared to last year’s corresponding figure of Rs435.050 billion, current week’s figure is higher by Rs1.928 billion. Current week’s decline was due to a fall in the borrowings by commercial banks, which fell to Rs355.480 billion against previous week’s Rs381.459 billion, or by Rs25.979 billion. Borrowings by specialised banks stood at Rs81.497 billion, against preceding week’s figure of Rs81.485 billion, higher by Rs0.012 billion.

Gross advances stood at Rs3,071.529 billion in the week under review, a rise of Rs24.877 billion over preceding week’s figure of Rs3,046.652 billion. Compared to last year’s corresponding figure of Rs2,467.924 billion, current week’s figure is larger by Rs603.605 billion. In the week under review, advances by commercial banks increased to Rs2,972.279 billion against earlier week’s figure of Rs2,947.594 billion, or by Rs24.685 billion. Advances of specialised banks stood at Rs99.250 billion, smaller by Rs0.192 billion over earlier week’s figure of Rs99.058 billion.

Investments of all scheduled banks decreased in the week by Rs0.606 billion to Rs903.904 billion against preceding week’s figure of Rs904.510 billion. Compared to last year’s corresponding figure of Rs1,246.895 billion, current week’s figure is smaller by Rs342.991 billion. In the current week, commercial banks investment declined to Rs891.571 billion, from earlier week’s Rs892.065 billion, or by Rs0.494 billion. Specialised banks investment stood at Rs12.333 billion, against preceding week’s Rs12.445 billion, smaller by Rs0.112 billion.

Cash and balances with treasury banks of all scheduled banks decreased by Rs80.733 billion during the week to stand at Rs358.697 billion against earlier week’s Rs439.430 billion. Current week’s figure was higher by Rs4.188 billion compared to last year’s corresponding figure of Rs354.509 billion. In the current week, the figure for commercial banks stood at Rs355.058 billion against preceding week’s figure of Rs435.911 billion, a fall of Rs80.853 billion, while of specialized banks it stood at Rs3.639 billion over previous week’s Rs3.519 billion.

Total assets of scheduled banks stood at Rs5,011.803 billion, smaller by Rs49.086 billion, over preceding week’s figure of Rs5,060.889 billion. Current week’s figure was higher by Rs357.368 billion compared to last year’s corresponding figure of Rs4,654.435 billion. Meanwhile, commercial banks assets, in the current week, stood at Rs4,890.187 billion, smaller by Rs48.89 billion over previous week’s figure of Rs4,939.077 billion. Specialised banks assets fell to Rs121.616 billion, or by Rs0.196 billion over previous week’s Rs121.812 billion.