KARACHI: The State Bank of Pakistan (SBP) on Friday injected Rs1.264 trillion into the banking system indicating the prevailing wide liquidity gap.

The SBP’s latest report showed that the banks have been investing into the government papers as their “holding of government securities now stands at 85 per cent of the total liquid assets maintained”.

Despite low returns on government papers, financial results of all major banks for CY15 showed higher profits compared to last year.

Analysts believed that higher deposits growth helped the banks to invest maximum in the government papers to increase the profits.

Published in Dawn, February 13th, 2016