Post by GHAZANFAR AZZAM

Pakistan's Banking Paradox: Appoint Baboos to Run the Central Bank, and Watch Commercial Banks Turn into the Government's Treasury. The primary purpose of a banking system is to finance the economy—not the government. However, when central bank leadership is viewed merely as another bureaucratic position rather than a role demanding expertise in economics, banking and financial markets, the negative outcomes become evident. The infographic below illustrates this trend. Over the past five years, commercial banks have increasingly diverted their focus from financing entrepreneurs, SMEs, exporters, and households to financing the government. By December 2025, banks had invested over 101% of their deposits in government securities, while lending to the private sector accounted for only about 30% of deposits. A banking system that primarily finances fiscal deficits cannot also serve as the engine of innovation, job creation, exports, and economic prosperity. This may explain why small businesses struggle to access working capital, entrepreneurs find it challenging to secure growth financing, manufacturers postpone expansion, and home ownership remains unattainable for millions. These figures do not just indicate a banking trend; they reveal a deliberate policy choice. When banks cease to function as banks, economies cease to grow. #Pakistan #StateBankOfPakistan #Banking #CentralBanking #EconomicPolicy #SMEs #Entrepreneurship #PrivateSector #FinancialSector #EconomicGrowth #PublicFinance #CapitalMarkets #Exports #FinancialInclusion #EconomicReform #LeadershipMatters Asad Ali Shah Syed Imad-ud-Din Asad Dr. Arshad Saleem Farhan Najam Surraiya Hasan Siraj Effendi Noshina Bukhari Sami-ud Din Khan ALAVI Sohailuddin Hunaid Bhai Arif Mahmood Butt Shafqat Aziz Mallick TARIQ AYAZ AHMED Arshad Azeem Gohar Mehsud Shahzad Akhtar Zouhair Abdul Khaliq