Seasonal Variations in Scheduled Banks’ Activity

A number of variables in an economy may be affected by seasonal influences such as weather conditions, trade practices, traditions, customs, etc. Since these variations recur year after year with an approximately constant degree of relative intensity and regularity, it is possible to make predictions about such seasonal variations. The present study attempts to measure the seasonal variations in some major balance sheet items of scheduled banks in Pakistan. The Link Relatives Method has been used in the construction of the seasonal indices. In most cases, the arithmetic mean of the link relatives is taken for the deri¬vation of the index. In cases where the variation in the link relatives is signi¬ficant, the median is used for the construction of the index. The study consists of three sections. The first section presents the indices of the balance sheet items of scheduled banks and relates some of these indices to each other and to certain important monetary variables. The second section presents the seasonal variations in the allocation of scheduled bank lending to various sectors of the economy. The third section spells out some of the implications of these indices. The study covers the period 1953-60 except for a few items1. A period of only 8 years cannot be considered long enough to enable us to predict with confidence the seasonal variations in the future. But these indices may give some indication of the nature of seasonal movements in the activity of scheduled banks in Pakistan.