According to the most recent data, the ADR rose 90 basis points on a monthly basis but dropped 579 basis points on an annual basis to 39.3 percent.
In the current fiscal year’s budget, the government levied a 15 percent tax on all banks with an ADR of less than 50 percent.
Encouraging banks to increase lending to the private sector was the aim of the action.
The government will impose an additional 15% tax on ADR below 50%.
Political unpredictability and high interest rates have prevented the private sector from accessing bank loans for the past two years. In CY2023, the banks achieved record profits, sometimes reaching 100 percent. Lending to the government generated the majority of their revenue.
