Banking system safe from global threats

Published Oct 10, 2008 12:00am

ISLAMABAD, Oct 9: President National Bank of Pakistan (NBP) Syed Ali Raza has said Pakistan’s banking system will remain immune from international financial crisis as it is based on sound lending practices.

Addressing the executives and branch managers of Rawalpindi and Islamabad region at Staff College here he said Pakistani banking system was also backed by collaterals as only 16 per cent of our total lending was in consumer financing.

Since USA is one of the economic leaders of the world there will be, however, some impact on our trade related business, especially with America and European countries, he added.

Mr Raza, however, advised all the banking executives to chalk out a strategy to manage future liquidity requirements and to multiply their efforts for fresh deposit procurement and recovery of Non Performing Loans (NPLs).

He informed the audience that NBP was going to introduce some new market-based deposit-oriented products offering lucrative profit margins to promote the saving habits of the customers.

“NBP, being the top Pakistani bank with the largest customer base, has enough potential to move the wheels of trade and industry in the country and definitely we will play our role in this present economic scenario,” he said.

Mr Raza told the participants that the present situation of currency fluctuations and price hike will not last more than 3-4 weeks as he was quite optimistic about economic stability in Pakistan, especially after the corrective measures taken for maintaining the law and order situation in the country. The upcoming meeting of “Friends of Pakistan” will be the real motivating force for Pakistani traders as well as the foreign investors.

Starting from the historical background of global economic recession of 1929 – crash of NYSE Wall Street -- till the recent collapse of top American investment banking model, including the largest one -- Lehman Brothers, he was of the opinion that under current economic scenario, there was no threat to Pakistan’s banking system.


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