Banking Reforms and Economic Growth: A Case Study of Pakistan

Banks indulge in catering the needs of government, public sector organization and private businesses. Government of Pakistan introduced several reforms for the improvement of banking sector. State Bank of Pakistan (SBP) has taken many influential steps in order to increase performance of banks in Pakistan. The study aimed to explore impact of financial reforms on economic growth of Pakistan and correlation among economic growth, deposits, lending, real interest rate, savings, and inflation, taking data if thirty six years. Regression analysis using E-Views was applied and explored a positive impact of financial reforms on economic growth. It is recommended to the government to remove the interest rate ceiling and overcome the problem of inflation.