Topic: Trends of long term fixed-deposits in banking
Learning Objective: The objective of this discussion is to enhance the students’ understanding and knowledge about fixed deposit trends in Pakistan.
For last few years, banking sector in Pakistan has changed its shape as banks have become investors instead of lenders. Now a day, banks prefer to invest in safe side, as a result; commercial banks have become lender to the government instead to private sector.
According to recent report issued by the State Bank of Pakistan, a downward trend is observed in fixed deposits of the period of three, four and five years.
Requirement: As a student of consumer banking, think analytically and find out three factors which are cause of decrease in long term fixed deposits of customers. How the habit of the depositors that “keeping money for short term” affect banks and the borrowers (identify single affect)?
Solution: Reason for decrease in Long term deposit.
1. Investment in different sectors of economy.
2. High rate of inflation.
3. commercial bank lending money to government instead of private sectorDOWNLOAD SOLUTION HERE