Bank deposits plummet due to increased WHT

After the withholding tax levied on bank deposits was increased from 5% to 10%, about Rs. 3000 million that had been deposited in banks so far have been directed to the stock market investments, stock market sources say.

Although this has led to rapid growth in the stock market, an impending liquidity crisis is formulating due to the outflow of deposits from banks.

This crisis has affected not only banks but also reputable financial companies.

According to the Governor of the Central Bank, there are 65 million deposits in banks in the country, totalling Rs. 1.7 trillion.