KARACHI, Nov 1: Finance Minister Shaukat Aziz has hinted at one financial services regulator for banks and non-banking financial institutions with the central bank focusing exclusively on monetary policy.

But this regulatory authority is some distance away and not expected to happen in immediate future, the finance minister said here on Friday while speaking at the launching ceremony of first on-line stock trading services of AKD Securities — the AKD Trade.

The minister said that recent shift in regulatory supervision of investment banks to the Securities & Exchange Commission of Pakistan would consolidate all NBFIs under one regulatory institution.

He said the prudential requirements need further review so that banking system takes complete ownership of risk management.

As the share of public sector banks reduces with the privatization, regulations which were a product of largely state controlled banking system will need to undergo a paradigm shift in line with the future trends.

About the capital market, he said that the reforms introduced in the last three years had provided a basis for sustainable growth in the future.

However, he said that despite basic infrastructure for a vibrant capital market, the market continues to remain narrow with a small investor base as approximately 25 scrips account for 95 per cent of the market capitalization. He said its main reason for lack of adequate distribution networks and education-cum-marketing of small investors.

Trading was still concentrated and needed to be more broad based by setting up of more offices outside Karachi, Lahore, and Islamabad.

Mr Aziz said that AKD’s initiative to provide Pakistan first electronic on-line trading platform for investors would go a long way in attracting and promoting retail investment in the stock market.

The minister also highlighted the three-year performance of the economy and said the target of 4.6 GDP growth rate for this fiscal year would be met due to better agricultural performance and increased manufacturing sector activities.

He said remittances by overseas Pakistanis stood at $1,053 million during July-September of the current fiscal year as against $340 million in the same period last year, recording an increase of 210 per cent. He said that if this trend continued, the remittances might exceed $3 billion during the current fiscal year.

He said foreign exchange reserves stood at $8,532 million on October 30, sufficient to finance 10 months of imports.

Shaukat Aziz said that due to continued flow of foreign exchange in excess of demand in inter-bank market, the rupee had strengthened against the dollar by 2 per cent.

He said overall foreign investment during the first quarter stood at $167.4 million as against $21.9 million in the corresponding period of last year. It includes foreign direct investment (FDI) of $170.2 million as against $69.1 million of last year, showing an increase of 146.3 per cent.

Chief executive officer, AKD Trade, Ali Ansari; and managing director, Karachi Stock Exchange, Moin Fuda, also spoke and highlighted the importance of on-line trading.

—APP