KARACHI, May 26: The number of millionaires is growing fast in Pakistan and latest official figures suggested that over 12,000 new account holders joined the elite club during the last three years.

Despite a frail economy having poor growth rate since 2008, concentration of wealth is visible, showing clear signs of unequal distribution of income, considered natural outcome of public policies benefiting rich disproportionately.

State Bank of Pakistan’s recent statistical bulletin revealed the figures of deposits with scheduled banks, reflecting that millionaires have acquired maximum space in banks’ overall deposits while the number of account holders, having Rs10 million and above, increased rapidly during the last three years, from December 2008 to December 2011.

About 24,423 account holders, having an amount Rs10 million and above, made a total deposit of Rs1.323 trillion at the end of December 2008. The figure of account holders rose by 12,086 to 36,509 by the end of December 2011, taking the total amount to Rs2.118 trillion.

The number of poor kept on rising during the period and the country failed to improve its tax-to-GDP ratio still bellow 10 per cent.

The new 12,000 millionaires added about Rs800 billion in the deposits of scheduled banks in the last three years. The millionaires accounted for 37.2 per cent of entire banks’ deposits of Rs5.688 trillion in 2011 while they constituted 34.8 per cent of entire deposits in 2008.

Pakistan is facing an acute problem of tax-evasion while the tax machinery could not improve the situation, which was criticised by the IMF and others. Low tax-to-GDP ratio was the prime culprit of economic failure of the country.

During this period, businesses reported failures and non-performing loans (defaults) kept on piling during the last three years, the huge increase in 10 million club demands a serious look into the matter.

Banking analysts said the increase in the size of deposits during the three years was not very significant despite a contribution of Rs800 billion by the account holders, having an amount of Rs10 million and above.

The total amount of deposits with scheduled banks rose by Rs1.897 trillion to Rs5.688 trillion during the three years.

The economic growth rate average was just 2 per cent during the three years, giving lesser chance to healthy deposits growth.

Massive growth of large account holders was unexplainable, but bankers added the growth was natural with some possibility of addition of illegal money.

Pakistan is among top countries having high corruption rates while it could not improve situation during the three years.

Financial sector has also been a victim of high corruption as shown by the high rate of defaults, but bankers said defaults are natural in this financial system.

The recent financial crisis in United States and now in European Union is the outcome of vast failures of financial sector which piled up huge defaults.