Bank Alfalah Limited has announced the imposition of a 5% monthly fee on checking accounts with end-of-month balances of Rs. 5 billion and above, or the equivalent in foreign currency. This change is reflected in the bank’s updated schedule of charges for the period from July to December 2024, and it will take effect on December 14, 2024.

The new fee structure means that account holders with balances meeting the threshold will incur a minimum deduction of Rs. 250 million per month. This move is a response to the federal government’s imposition of a substantial 16% tax on banks with an Advance-to-Deposit Ratio (ADR) of less than 50%.

The government’s policy aims to encourage banks to increase private sector lending, setting significant financial consequences for those failing to meet the specified targets. In light of this, banks are exploring various strategies, including legal avenues, to mitigate the impact of the ADR tax.