Pakistan’s banks to upgrade practices to global standards

ISLAMABAD: Pakistan’s central bank has launched compliance risk management guidelines with a view to upgrade banking system practices to global standards.

According to Khaleej Times report, the State Bank of Pakistan (SBP) has okayed banks’ financial stability. Also, it has allowed non-bank entities to provide ATM services to help a growing number of ATM users to withdraw cash. The deadline to adopt this is on December 31, 2017.

The good news for international businessmen, investors and savers in Pakistan is that the SBP has unveiled new rules “to ensure the total risk management guidelines and provide the banking sector a uniform benchmark”.

“This will help the banks on various aspects of their operations, including identification, assessment, and management of compliance risk in their management,” an SBP spokesman told Khaleej Times.

“Globally, the fact is there an increasingly complex nature of bank operations, resulting from widespread use of technology, product innovation and there is a fast growing competitiveness in the banking sector.”

“At present, financial institutions are confronted with significant risk management and corporate governance challenges, particularly with regard to compliance risks that transcend business lines, legal entities and jurisdiction of operations.”

The SBP, a healthy and strong regulator of the banking sector, has been striving to foster the requisite risk compliance governance practices in the banking field, in line with the changing consumer attitudes and behaviour and complexity of the players in the industry, and to safeguard depositors’ interest and bring the domestic industry at par with the international standards and the best practices.

Pakistani banks and bankers, operating in Pakistan or abroad, are already highly regarded, but by adopting and following this SBP upgrade it will further raise their status.

On the other side, it will raise, still higher, the confidence of foreign customers in their financial dealings with Pakistan and Pakistani bankers, as the financial sector expand globally.

National Bank of Pakistan, one of the Big 5, will open “at least, two branches in China, this century’s biggest market, foreign trader and investor”, bank president Saeed Ahmad told Khaleej Times.

He said: “We are going to have, at least, two full-fledged branches in two major cities of China by the middle of financial year 2018.

It will further expand all types of business transactions between Pakistan and China and will also establish our footprint in the Asian’s giant’s market.