Punjab Tops Provincial Borrowing with Rs. 405 Billion from State Bank in Early FY2025-26
Islamabad, 2025 –
The Province of Punjab has become the largest borrower among Pakistan’s provinces, securing a massive Rs. 405 billion from the State Bank of Pakistan (SBP) within the first 38 days of the current fiscal year (July 1 – August 8, 2025).
While the federal government is restricted by IMF rules from borrowing directly from the central bank, provincial governments continue to rely heavily on SBP financing. Punjab’s borrowing dwarfs other provinces, being nearly 25 times higher than Balochistan and over 20 times higher than Sindh during the same period.
Provincial Borrowing Breakdown:
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Punjab: Rs. 405 billion
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Sindh: Rs. 16 billion
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Khyber Pakhtunkhwa: Rs. 21 billion
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Balochistan: Rs. 13 billion
In a historic move, Punjab also cleared its long-standing bank debt of Rs. 675 billion, accumulated over three decades, mostly linked to wheat procurement and subsidy programs. Officials said this repayment ends daily interest costs of Rs. 250 million, freeing up funds for public welfare projects. The final installment of Rs. 13.8 billion was paid to the National Bank of Pakistan without rolling over any loans, preventing future monthly interest costs of Rs. 500 million.
Meanwhile, Pakistan’s state-owned enterprises (SOEs) continue to face financial strain, borrowing an additional Rs. 65 billion from commercial banks to stay operational. The total outstanding debt of these loss-making SOEs now exceeds Rs. 2,166 billion.
Despite borrowing limits, the federal government managed to repay Rs. 55 billion to the State Bank, reducing its total debt to Rs. 5,269 billion as of June 30, 2025.
Punjab’s massive borrowing and historic debt clearance are being viewed as key steps toward fiscal management and public service improvement, setting a benchmark for provincial finance in Pakistan.
