LAHORE: The Securities and Exchange Commission of Pakistan (SECP) chairman Mohammad Ali on Thursday emphasised the need for restructuring of country’s financial sector to develop a debt capital market and mid-size financial institutions for creating competition for banks.

Speaking to members of the All-Pakistan Textile Mills Association (Aptma), Ali pointed out that the restructuring was crucial to increasing access of individuals and small to medium entrepreneurs to finance for investment in business and stocks.

He said banks should be restricted to commercial banking — accepting deposits and lending for short term.

“So far we have created only banks and asset management companies owned by them. He said 94 per cent of the total deposits of Rs7.5 trillion were with the banks and the rest of them with the asset management companies owned by them.

This has restricted the access of SMEs’ and individuals’ access to finance because they give money only to those who already have it,” he said.

He was of the view that a developed debt capital market and mid size asset management companies and non-banking financial institutions would create competition for the risk-averse banks and support the SME sector.

The SECP chairman, who also called for reviewing the Companies Ordinance 1984 to update it according to the needs of the present times, also gave a detailed briefing on the work of his organisation for boosting capital markets, regulating thecorporate sector and expanding the scope of the commodity exchange.

He said the SECP would finalise seven committees to deal with different issues of the capital markets.

Aptma-Punjab chairman Ahsan Bashir said some companies had got themselves de-listed simply because of over regulation by the SECP.

Aptma chairman Gohar Ejaz appreciated the efforts of the SECP chairman SECP.

He said the country’s capital markets were not supportive of the private sector, which was why people did not list their companies on the stock exchanges.

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