Governor State Bank of Pakistan Dr Shamshad Akhtar stated this while delivering a lecture on the topic of “Pakistan: Regulatory and Supervisory Framework” at the Institute of International Bankers’ annual conference at Washington on March 5. The text of the SBP governor’s speech was placed on the website of central bank on Monday.
“Besides ABN AMRO, Citibank, HSBC and Saudi American Bank are interested in expanding business or acquiring domestic stakes,” she said. She admitted that with most of the banking system in private hands, the government’s implicit guarantee on deposit no longer existed and “now the owners and board of directors as well as top management of a bank are liable for their actions.”
However, she said, the central bank’s surveillance system played a key role in identification of the problem that threatened capital and liquidity crisis at the earliest stage and allowed execution of prompt corrective action.
She said the central bank had powers to appoint official liquidators for settlement of depositors’ claims in a timely manner, in cases where corrective actions resulted in liquidation and restructuring of the bank.
She said banks had adopted prudential regulations and non-performing loans related to consumer financing had been low at three per cent of total NPLs despite increase in the share of consumer financing in total outstanding advances to 14 per cent.
She said the SBP was developing a further role for private sector credit information bureaus and independent debt and financial advisers, adding the gaps in rating agencies were of particular concern to the State Bank of Pakistan, given its heavy reliance of standardised approach under Basel-II.