Streaming Media

Media Type

Keynote Address

Publication Date

12-9-2003

Description

Pakistan’s banking sector like many other developing countries had been faced with several problems and difficulties such as: (1) Most of the financial assets and deposits were owned by nationalized commercial banks (NCBs) which suffered from a highly bureaucratic approach, overstaffing, unprofitable branches and poor customer service. (2) NCBs along with specialized banks such as ADBP, IDBP and Development financial institutions such as NDFC had a high ratio of non-performing loans. (3) Banking industry faced a high tax rate, which affected its profitability and attractiveness for new entrants. (4) There was a proliferation of banks and some of them were undercapitalized, poorly managed with a scanty distribution network. (5) Agriculture, small and medium enterprises, Housing sectors were underserved and the middle class and low income group had limited access to bank credit. (6) Banks had typically focused on trade and corporate financing with a narrow range of products and had not diversified into consumer and mortgage financing for which there is an ample unsatisfied demand. (7) Poor quality of human resources, weak internal controls, non-merit based recruitments, high administrative costs and undue interference of unions in decisions making process affected the performance of public sector financial institutions adversely.

Notes

Keynote address at IBC Gulf Conference – Investing in Pakistan at Islamabad on December 9, 2003

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