KARACHI, Nov 6: The governor, State Bank of Pakistan (SBP), Dr. Ishrat Hussain said on Thursday there is no immediate plan to transfer SBP’s regulatory and supervisory powers for banking institutions to any other regulatory authority.
Speaking as chief guest at a seminar on “Pakistan Market Agenda”, jointly organized by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Institute of Research for Economic Development at Federation House, Dr. Hussain said the SBP would continue to supervise the banking and similar financial institutions.
SBP has already transferred its regulatory powers regarding non-banking financial institutions to Securities and Exchange Commission of Pakistan (SECP), he said adding that for the next several decades, all the banking supervisory and regulatory powers will remain with SBP.
Recently, in Malaysia, he said, the issue of central banks’ regulatory role came up for debate, and there was unanimity of views that the central banks should have those powers, otherwise, in case of a crisis things would become difficult to control.
Dr. Ishrat Hussain pointed out that Korea, which is a developed country, had the experience, but the country faced difficulty in controlling financial crisis.
He said the main objective of supervisory body in case of bankruptcy is to minimise the losses of depositors and clients.
“We have strength and supervisory capacity to do this,” he said adding that the SBP has recently recruited MBAs and Chartered Accountants through a competition and they have been given training in the country as well as abroad on supervisory role.
These people are doing inspections of the accounts, he added.
The SBP Governor said through use of Information Technology, the online inspection of banks would be possible and then there would be no need for periodic inspection of accounts of the bank.—APP
Our Staff Reporter adds: The governor underlined the need for the continuation of economic policies in future.
“Pakistan’s economy has come out of the intensive care unit (ICU) despite a series of hurdles both locally and internationally,” he said
He said the economy remained stable during the last three years despite a series of events like freezing of foreign currency accounts, issues of IPPs, nuclear test, shaken confidence of foreign investors, drought, falling reserves, etc.
“If economy had performed well under negative circumstances, I think we should not discontinue our economic policies,” he said.
“Economy is now poised to take off and it is time for the growth to take place,” he said referring to the rising trend in exports by 16-17 per cent every month, increase in tax recovery by 14-15 per cent, triple rise in arrival of home remittance in six months, rise in large scale manufacturing by five per cent and a billion dollar investment by textile industry in BMR.
He said now the debate has again started that no growth is taking place and no efforts have been made for poverty reduction. He reckoned that poverty has doubled in the last decade.
Poverty can be alleviated if the economic growth rate will increase by five to six per cent in coming years. He said the growth rate was 3.6 per cent in last fiscal year. “If every thing goes well the growth rate will touch 4.6 per cent in the current fiscal and five per cent in the next financial year,” he said.
He said that it is time to invest in education and human resource in order to improve productivity.
“I think the new upcoming government should take the education issue very seriously besides investing in female education,” he said urging the new political government to be more objective on this issue. “There should be 75-80 per cent literacy rate in Pakistan by 2010,” he added.
He referred to the example of Bangladesh where NGOs have been active for human resource development and productivity of skilled labour.
Managing Director, Pak-Kuwait Investment Company, Zaigham Mahmood Rizvi said that it is now time that the inefficiency of legal system and uncertain political conditions should insulate.