Interest rates have been jacked up by the central bank once again. This is fourth major installment of increase in the fiscal year to date. And from it seems it may not be the last considering the language of the central bank’s latest Monetary Policy Statement appears angrily hawkish.

Notwithstanding the pains the economy is suffering at both and macro and micro level, one important question not being frequently asked is: are banking customers benefiting from the rise in interest rates. The answer is not a resounding yes, when in fact it should be.

Save for some heavy account movements by a few savvy savers who have better understanding of the pulse of economy and different options for saving and investments, fixed deposits at banks and individuals’ investments into T-Bills and PIBs through banks are not rising at a pace that such steep spikes in interest rates should effectively lead to. This is in part because Pakistanis at large are not financially literate, not at least as far as banking and other facets of formal financial sector is concerned. But financial literacy isn’t the only challenge. People are simply too busy as well.

Consider this: a typical in-person banking transaction of going to the bank to book fixed/ time deposits, or invest in government papers through Investor Portfolio Services (IPS) account takes at least about 30-45 minutes to say the least. And that’s if you are lucky: if your personal banker or your branch manager knows about the products; is willing to provide timely service; and does not dissuade you from making timely decisions by ensuring ease of doing business. This means that job goers and MSME businessmen alike (big players call bankers to their office or homes) cannot always find time to slip away from daily work life and make investments in government papers or book time deposits.

Ergo, banking customers are losing their money’s worth. At the one end, inflation is eating their savings like a rat gnawing wheat bags. At the other end, the lack of financial literacy, busy schedules of modern citizens, amid stale bouquet of services by bankers is preventing banking customers’ money from growing.

To fix this wrong, the central bank first needs to immediately launch awareness campaign aimed at promoting time deposits, and to attract individual investments into treasury papers through IPS accounts. It should also rap on the knuckles of bankers to ensure that they are facilitative to those customers interested in saving and investment routes. In that light, it is also important to ensure lower minimum investment requirement for investments in treasury bills through IPS accounts.

The media and marketing hype adopted by the central bank in recent years for a number of products suggests that it is truly capable of promoting time deposits and IPS accounts as well; it really boils down to the question of will.

It is truly unfortunate that personal bankers at priority banking services of even multinational banks of large branch networks (or even their branch managers) have no or little knowledge of IPS account to be able to swiftly facilitate their customers, whereas other put off customers by raising the minimum investment amount: clearly not every saver has one or two million to invest in IPS – some may have just three or four hundred thousand, which means investors can buy 3-4 PIBS with this amount.

As a second step, the central bank needs to ensure that banks offer time deposits and IPS accounts to their customers through click of a few buttons via their respective website and mobile apps. And lastly, the central bank needs to speed up the licensing process of digital banks that can perhaps better channel savings into investments; indeed, the world is moving too fast for legacy banks to learn how to provide service.

Ensuring that more and more banking customers channel their idle money into saving and investment products can help both reduce aggregate demand (which is the need of the hour these days), and also in the case of IPS accounts, help the government get better pricing, which is a key aspect of effective debt management. Hope the stakeholders would heed this, and soon!