Shamshad appreciated the performance of the Banking sector.

 

Governor of State Bank of Pakistan, Dr Shamshad Akhtar appreciated the performance of the banking sector and called upon the bankers to keep up their efficiency level so that the growth and development achieved so far could be sustained. She was speaking at the Prize Award Ceremony 2007 of the Institute of Bankers, Pakistan. She said the banking is the best performing market of Pakistan in the region. It has offered better profits, carried out outstanding liberalisation and consolidation of its gains, NPL have come down and systems is regularly being improved to compete it with the international standards of banking and regulation of financial institution's working. Talking about the broad-based reforms and restructuring of the Central Bank, the Governor said the monetary policy management is especially focused and independent stance has been maintained. The banks have been given liberty to price their products and services without interference from the regulator and the political manipulators. "The Central Bank intends to minimise whatever little interference or control it has over the banks, so that they could work according to the market forces ", she added. Dr Shamshad said that during the process of transformation of the sector, some 35,000 employees were laid off and around 2,000 bank branches were closed down. This was a difficult task but was necessary to make the sector viable and drive it to the new pedestal. She said that all the indicators of the sector are showing growth and encouraging ratios. However, she underlined the need to enhance the penetration of the banking services into the rural areas. Talking about the Basel II, she said the sector should not stop at the present level but work hard to increase profitability, rationalise interest rates and achieve a better balance for the shareholders and the depositors as well as for its customers. She said despite having advanced technology, the happenings and adverse impacts can't be predicted, therefore, the banking sector should go for more effective risk management system and make the sector stronger to bear any shock in the future. She also pointed out the central bank's steps in this regard by increasing the paid up capital requirements etc. She asked the banks to focus on micro finance and outreach to rural areas as these two things can help fight the poverty at a faster pace. She called upon the banks to make their presence felt in the rural area where people wait for someone to guide them on the use of money at their disposal. She said that the increased spending on infrastructure and development would bring more demand for funds that would provide an opportunity for the banking sector to flourish further. Dr Akhtar said the SME and Islamic financing have tremendous potential and the banks should avail this opportunity. In this regard, she said Pakistan would be the Chairperson of the Group of Central Banks Board of 16 Islamic countries next year and she is currently serving the Board as Vice Chairperson. That indicates the potential and role of Islamic financing in Pakistan, she added. Earlier, the Chief Executive of the IBP Umer Saleem highlighted the achievements of the Institute. He said that the institute might get the degree awarding status during the year 2007. The ceremony concluded after certificate distribution

 
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