The State Bank of Pakistan (SBP) Governor Yaseen Anwar has outlined the Central Bank’s 10-point banking strategy for the growth of the financial system in the country.

Speaking on the ‘Role of Financial Institutions and Capital Markets in Pakistan’s Economy’ at PAF Air War College, Karachi on Monday, he said this strategy focuses on.

(i) to implement a financial inclusion programme for underserved economic sectors of the country; (ii) to strengthen consumer protection through legislation and codes of conduct; (iii) to strengthen competition and efficiency with greater transparency; (iv) to consolidate the banking sector’s corporate governance and risk management practices; (v) to strength prudential regulations & supervision of banks; (vi) to introduce consolidated supervision frameworks that supervise financial groups and conglomerates;

(vii) to develop a safety nets for small depositors, unviable institutions and unforeseen market crises; (viii) to strengthen the Bank’s powers to maintain monetary and financial stability by updating the SBP Act regularly; (ix) to deepen the financial sector by developing debt markets, stock markets and NBFIs; and (x) to develop the financial infrastructure, including payment systems and credit information systems to facilitate transactions.  Governor State Bank said ‘I want to emphasise that all these measures are focused at creating an efficient, competitive, and robust financial system that can provide impetus for faster economic growth, while guarding the interests of all stakeholders involved. That, in a nutshell, is all we seek to do.’

The State Bank has a dual mandate: it must tackle the issue of maintaining price stability, while also keeping an eye on economic growth, he said, adding that we need to pay close attention to both monetary stability and fuller utilisation of the country’s resources.He said the State Bank’s constant monitoring of the banking sector’s portfolio has meant that today our banks are profitable, extremely healthy and robust.He emphasised that a smooth, well-oiled financial system can ensure that monetary policy signals are transmitted effectively into the economy.

SBP Governor said the State Bank regulates the economy as a whole by using monetary policy instruments, which are transmitted through the financial sector. ‘The potency of our monetary policy instruments depends on how many people are actively using formal channels of borrowing and lending,’ he added.He said the State Bank’s monetary policy tools have been becoming much more potent since the introduction of secondary markets that trade government securities, and the removal of distortions from within these markets.