Govt forms committee to tackle ADR challenges, final report due by December 31

ISLAMABAD: The government has set up a high-level committee to tackle the ongoing issues surrounding the Advances-to-Deposit Ratio (ADR) following instructions from the Prime Minister’s Office.

This was officially announced by the Revenue Division in a notification on Friday.

The committee’s job is to take a close look at the current legal framework that governs fiscal policies tied to ADR. Part of their task will involve coming up with new tax strategies that target profits banks earn from investments in government securities.

The committee will also reach out to the banking sector, aiming to build a shared understanding and agreement on potential reforms. By the end of this year, they are expected to present their recommendations.

The key challenge will be striking the right balance between the government’s need for revenue and finding ways to encourage banks to lend more to the private sector. To make this happen, the committee will explore non-tax regulatory changes that could help boost private-sector lending.

Leading the coordination efforts will be the Member (IR-Policy) of the Federal Board of Revenue (FBR), who will serve as the committee’s secretary. This role involves making sure everything stays on track and the final report is delivered on time.

The recommendations might also include legal and regulatory changes to help implement the proposed reforms effectively.

The committee is chaired by the Deputy Prime Minister and includes important figures like the Minister for Finance & Revenue, the Law Minister, the Minister of State for Finance & Revenue, the Attorney General of Pakistan, the Finance Secretary, the Chairman of the FBR, the Governor of the State Bank of Pakistan, and Ms. Asma Hamid.

Together, they’ll work towards a solution that addresses ADR issues while supporting a healthier financial sector.

Read next: Govt settles Rs413 billion debt, total FY25 retirement hits Rs2.09 trillion