Seasonal Variations in Scheduled Banks' Activity

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