Banks Fail to Promote Saving Accounts Among Masses

Commercial Banks failed to convince customers to open saving accounts at branches owing to complicated procedures, poor advertisements and lower profit rates. 39% of the masses are totally unaware of saving products offered by banks as per a survey conducted by Gallup Pakistan in collaboration with State Bank of Pakistan.

The reasons for not saving money in banks and other financial institutions, quoted by 20% Pakistanis, was that they did not know enough about bank accounts while 19% Pakistanis said that they did not know enough about financial institutions.

A nationally representative sample of men and women from across the four provinces was polled.

Question: “Financial institutions like banks and insurance companies offer possibilities to save money, for example on a savings account. You are not depositing money with a financial institution to build up a reserve for future expenses. Can you tell me why?”

clip_image002[2]Gender Breakdown

A gender breakdown of this result reveals that 20% men said that they did not know enough about bank accounts whereas the same response was given by 19% women. Furthermore, 20% men and 18% women stated that they did not know enough about financial institutions. 19% women said that an account would not bring them any advantages whereas the same response was given by 18% men.

Rural and Urban Breakdown

A rural/urban breakdown reveals that 19% of the respondents in urban areas and 20% in rural areas stated that their primary reason for not saving money with a bank was a lack of knowledge regarding bank accounts.

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Most Pakistanis tend to state that they have a lack of knowledge about formal financial institutions. It is this reason, which in part causes people to distrust banks. The second major reason for not using banks lies in a perception among Pakistanis that they don’t really need to avail the services of banks and other such institutions. Hence, to conclude, it is a perceived ‘lack of understanding’ and a ‘lack of need’ among the Pakistanis regarding banks that has resulted in a lack of financial inclusiveness.

The banked population in Pakistan stands between 12 to 14 percent.

Pakistanis with Saving Accounts in Banks

For instance, if a person invests Rs 1 million for a year, he receives maximum Rs 5,000 per month as interest or profit in case of Islamic Banks. But if Zakat at the rate of 2.5 percent is applied, a person receives merely Rs 3,000 a month.

Interest/ profit rates stand at 4 to 6 percent so those having bank accounts are not getting enough benefits from financial institutions such as banks.

Hence, the overall economy is based on cash and money is circulated out of banking system which causes losses to our financial system that are for the most part, undocumented. This also causes lower tax revenue generation by the government.

It is hoped that branchless banking with offer of wallet account will increase awareness among public to open saving accounts in the future. Because branchless banking agents are available in small cities and the procedures are simple for opening a wallet account.


  • Farhan Ahmad

    اور جو جانتے ہیں وہ ٹیکس کی شرح سن کر کانوں کو ہاتھ لگاتے ہیں۔

  • Farhan Ahmad

    اور حکومت بھی نہیں چاہتی کہ لوگ اپنا پیسہ بینک میں رکھیں۔ وہ چاہتی ہے کہ لوگ اپنا پیسہ کاروبار میں لگائیں۔

  • Imran

    Gallup did not mentioned the real reason that people dont want the INTEREST thats why majority people have current account.

    • Abu Zaid

      True, I was approached many times for Savings accounts, both Islamic and Non-Islamic, but no one was able to convince me that they are Riba Free.

    • eyescreaman

      Thank you for pointing out the main reason. Bhai Allah we daro,sood Allah k saath jung he.

  • Junaid

    The majority of bankers in Pakistan are corrupt individuals. The main reason as per my understanding seems to be not to go through another corrupt institution after facing corruption everywhere else.
    The other point is that majority of the banks in Pakistan have useless fees that are simply ripoffs like
    1. Account handling fee
    2. Money transfer fee
    3. ATM card fee
    4. Renewal fee
    5. Checkbook fee
    6. Limitation on withdrawals like extra tax on withdraw beyond Rs 50000
    7. various stupid taxes on saving amount that was saved after people payed their taxes

    Compared to these ripoffs the bank offers 4~5% interest yearly which is peanuts and most corrupt bank employees will simply eat it away.

    Now tell me if you save Rs100 thinking that in the end of they year you will get Rs104 or Rs 105, but instead find out that you have only Rs 80 in your account, who is stupid enough among the middle class to fall in that trap?

  • Muhammad Ashraf

    i have a simple reason for not investing money in saving account that is markup is Haram

  • XBanker

    banks wants to “promote” saving banking but in fact its just burden for them and under the tables the execs are told to discurage the saving banks