Pakistan’s private sector has turned net borrower from banks for the first time in financial year 2026-27, State Bank data released on Monday showed. Net borrowing stood at Rs87 billion between July 1 and October 23, compared with Rs29 billion in debt retirement in the same period last year — a clear swing from repaying loans to taking fresh credit.
Conventional banks recorded only Rs320 million in net debt retirement, against Rs117 billion retired a year earlier. Islamic banks, by contrast, still recorded net debt retirement of Rs63 billion, compared with Rs25 billion in the same period last year. Only the Islamic branches of conventional banks extended net new loans in the period.
The shift matters because it signals businesses are again seeking bank finance after a long phase of deleveraging, even though borrowing has become costlier. The State Bank raised its policy rate by 50 basis points to 12 percent last week, which will shape how far this return to borrowing goes in the months ahead.
Sources: Dawn, State Bank of Pakistan data. Written in our own words for information only.