ISLAMABAD: Pakistan. Government informed the National Assembly the other day that commercial banks were charging individuals up to 29 per cent interest rate despite the historically lowest 5.75pc policy rate of the State Bank of Pakistan (SBP) – @AceFinanceNews

#AceNewsReport – Feb.20: As the economy expands so it’s time for banks to make a #killing of their own with some charging up to 28.9% for some types of lending..

The SBP has maintained the policy rate at 5.75pc since May 2016 — a rate at which it provides liquidity or lends money to the commercial banks that they use as a base rate.

The banks are generally expected to charge their customers slightly higher interest rates on the basis of the SBP policy rate after calculating their overhead expenses and risk coverage.

In reply to a question asked by MNA Seema Mohiuddin Jamali, parliamentary secretary for finance Rana Afzaal Hussain provided a written statement to the house on behalf of Finance Minister Ishaq Dar explaining the weighted average rate of interest (WAROI) being charged by various banks to individuals. He explained WAROI as the aggregate rate of interest being charged on all types of loan facilities, including auto, business, agriculture, housing and salary advance loans.

According to the statement, Banks charge up to 29pc interest rate, NA told including the Silk Bank who is charging the highest interest rate of 28.89pc to individuals, followed by 21.91pc by the Standard Chartered Bank. The Habib Metropolitan Bank Limited has the lowest rate of 7.77pc — closest to the SBP policy rate.