Cash-surplus banks park Rs705bn in govt papers

The government raised Rs705 billion through an auction of market treasury bills despite Rs1.195 trillion bids offered mostly by banks on Wednesday. The bidding trend showed that banks were saturated with liquidity and willing to park maximum in the government papers. The government remained around its target of Rs750bn but the accepted amount was much higher than the maturing amount of Rs630bn. The revenue shortfall during the first 10 months of the current fiscal reported at Rs381bn but the cash-starved government has already borrowed about Rs3 trillion from commercial banks. Market experts said bank deposits increased during the current financial year as they were not willing to extend loans to the private sector. The bank advances to the private sector dropped by 81 per cent during the current fiscal year indicating the poor health of the economy. The IMF and WB predicted 0.5pc GDP growth this fiscal year.