Deputy Governor State Bank of Pakistan, Ashraf Mahmood Wathra said on Thursday that e-banking provides a great opportunity for safe, faster, and efficient provision of financial services to the unbanked segments of the society.
While, speaking as chief guest at "e-Banking 2013, 11th International Conference & Exhibition," organised by Total Communications, Deputy Governor in his keynote address said as a regulator of the banking industry, the State Bank has played an effective role in providing an enabling regulatory environment for the banks to leverage their full potential of technology, mobile operators' penetration, and other available delivery channels to provide financial services to all segments of the population.
"Uptill now, the lack of a sizable distribution network had been a major challenge in broadening access to financial services, resulted a large segment of the population, particularly those living in rural and remote areas have remained deprived of banking services," he said. An important implication of this exclusion is that this large proportion of population has been overwhelmingly reliant on cash-based transactions, thus causing inefficiency of economic transactions, he added.
Pakistan has one of the lowest financial penetration levels in the world with 56 percent of the adult population totally unbanked, he mentioned. E-banking offers opportunities for financial inclusion through remote and low cost alternative delivery channels as named above, therefore, it has tremendous potential and value for both the banked and unbanked population in developing countries, deputy governor said.
"Our achievements in the Branchless Banking Services have put Pakistan at the Global centre stage of Financial Inclusion and innovation," he said and added that World Banks' Consultative Group to Assist the Poor (CGAP), in its recent study has also recognised Pakistan as one of the fastest developing markets for Branchless Banking.
He said latest statistics of branchless banking revealed that a large segment of the previously unbanked population has started entering into a new arena of branchless banking. "Total number of transactions has increased to 34.6 million during the October-December 2012 quarter with volume of Rs 120 billion. The numbers of branchless banking accounts are also increasing steadily and have crossed 2 million and deposits have grown to over Rs 1 billion," he mentioned.
The Deputy Governor said that technological advancements have enabled banks to serve customers through e-banking, including Automated Teller Machines, Credit & Debit Cards, Mobile Banking, Internet Banking, and Telephone Banking, etc. In advanced economies, E-Banking has been largely promoted because it meant value added services in terms of convenience and round the clock services to the already banked population, he added.
Deputy Governor said that developing brick and mortar branches is a costly proposition, therefore in order to encourage banks to develop alternative delivery channels, SBP in 2008, introduced Branchless Banking (BB) Regulations. In Pakistan, E-Banking has been growing at a steady pace and according to the latest payments systems quarterly report, the quarterly volume of overall e-banking transactions reached 79 million with a total value of Rs 7.6 trillion in the quarter ending December 2012, he mentioned.
Similarly, E-Banking infrastructure in the country maintained an increasing growth trend. A total of 6232 ATMs have been installed by various banks in the country. The network of Real-Time Online Branches (RTOB) has increased to 9,896 branches which can now offer RTOB services out of 11,500 bank branches across country. Similarly, the number of POS machines has increased to around 35,000 while the number of plastic cards issued in the country reached nearly 21 million, he informed.
The Deputy Governor said that Pakistan has one of the highest numbers of people per bank branch in the region and banking accounts are owned by approximately 32 million customers largely belonging to high income segments and there are about 7 million borrowers.
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