In order to ensure prudent liquidity management by banks, it has been decided that henceforth advances to deposit ratio of any bank shall not exceed 70 per cent at any time.

On October 17, the State Bank of Pakistan decided to reduce the Cash Reserve Requirement to a weekly average of six per cent of total demand liabilities. CRR will be further reduced to five per cent effective November 15, 2008. The Statutory Liquidity Requirement w.e.f. October 18, is nine per cent (excl. CRR) of total demand liabilities.

According to the weekly statement of position of all scheduled banks for the week ended October 25, 2008, deposits and other accounts of the scheduled banks which had fallen in the preceding week, rose in the current week and stood at Rs3,681.110 billion, higher by Rs14.257 billion over preceding week’s figure of Rs3,666.853 billion. Compared with last year’s corresponding figure of Rs3,451.075 billion, the current week’s figure is larger by Rs230.035 billion. During the current week commercial banks deposits showed an increase of Rs14.071 billion over the week to Rs3,669.774 billion, against preceding week’s Rs3,655.703 billion. Specialised banks deposits stood at Rs11.336 billion, against preceding week’s Rs11.150 billion, a rise of Rs0.186 billion.

Borrowings by all scheduled banks decreased further. It declined to Rs424.428 billion over preceding week’s figure of Rs436.978 billion, a fall of Rs12.55 billion. Compared to last year’s corresponding figure of Rs405.156 billion, current week’s figure is higher by Rs19.272 billion. Current week’s decline was due to a fall in the borrowings by commercial banks, which fell to Rs342.923 billion against previous week’s Rs355.480 billion, or by Rs12.557 billion. Borrowings by specialized banks stood at Rs81.506 billion, against preceding week’s figure of Rs81.497 billion, higher by Rs0.009 billion.

Gross advances stood at Rs3,092.451 billion in the week under review, a rise of Rs20.922 billion over preceding week’s figure of Rs3,071.529 billion. Compared to last year’s corresponding figure of Rs2,482.220 billion, current week’s figure is larger by Rs610.231 billion. In the week under review, advances by commercial banks increased to Rs2,993.142 billion against earlier week’s figure of Rs2,972.279 billion, or by Rs20.863 billion. Advances of specialised banks stood at Rs99.309 billion, larger by Rs0.059 billion over earlier week’s figure of Rs99.250 billion.

Investments of all scheduled banks increased in the week by Rs17.139 billion to Rs921.043 billion against preceding week’s figure of Rs903.904 billion. Compared to last year’s corresponding figure of Rs1,243.254 billion, current week’s figure is smaller by Rs322.211 billion. In the current week, commercial banks investment increased to Rs909.344 billion, from earlier week’s Rs891.571 billion, or by Rs17.773 billion. Specialised banks investment stood at Rs11.698 billion, against preceding week’s Rs12.333 billion, smaller by Rs0.635 billion.

Cash and balances with treasury banks of all scheduled banks decreased by Rs8.48 billion during the week to stand at Rs350.217 billion against earlier week’s Rs358.697 billion. Current week’s figure was higher by Rs2.678 billion compared to last year’s corresponding figure of Rs347.539 billion. In the current week, the figure for commercial banks stood at Rs347.180 billion against preceding week’s figure of Rs355.058 billion, a fall of Rs7.878 billion, while of specialized banks it stood at Rs3.037 billion over previous week’s Rs3.639 billion.

Total assets of scheduled banks stood at Rs5,018.496 billion, higher by Rs6.693 billion, over preceding week’s figure of Rs5,011.803 billion. Current week’s figure was higher by Rs363.39 billion compared to last year’s corresponding figure of Rs4,655.106 billion. Meanwhile, commercial banks assets, in the current week, stood at Rs4,895.835 billion, higher by Rs5.648 billion over previous week’s figure of Rs4,890.187 billion. Specialised banks assets rose to Rs122.661 billion, or by Rs1.045 billion over previous week’s Rs121.616 billion.