Senator Mohammad Ishaq Dar, the Deputy Prime Minister and Foreign Minister, presided over a high-level meeting to address the advances to deposit ratio problem in Pakistan’s banking industry.
Senior government officials, including the governor of the state bank, the chairman of the federal board of revenue, and the minister of state for finance, attended the meeting. The topics of discussion included the effect of alternative dispute resolution (ADR) on lending to productive sectors, tax revenue targets, and the banking environment as a whole.
With the Finance Act 2022, the government raised the tax rates for banks with ADRs under 50% in an effort to promote commercial lending and deter passive income.
Currently, the banking industry is trying to increase ADR levels in order to prevent additional taxes.