KARACHI: After witnessing a steep increase in liquidity inflows during the first six and half months of the current fiscal year, the private sector repaid a staggering Rs440 billion to banks in just two weeks.

On Wednesday, the State Bank’s data showed that the money lent in the last quarter of 2024 started returning to the banks as the fear of a 15 per cent incremental tax on the advance-to-deposit ratio (ADR) is over.

From Jan 17 to 31, the credit to the private sector went down by Rs440bn from Rs1.398 trillion to Rs958bn.

One of the main reasons for the significant increase in advances to the private sector was the government’s announcement of imposing an incremental tax of up to........

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