State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar has said that banking spread is high in the country and asked banks to highlight rate of return for term deposits for the benefit of consumers.
Speaking at a special discussion on "Vision of Banks in the Future - Where are we headed" at the closing session of a two-day Asia Finance Conference, organised by Dawn Group of Newspapers at a local hotel on Sunday
She said there is rising public concern over low rate of returns at saving accounts, as banking spread in the country is over seven percent. She asked commercial banks to highlight the high returns at fixed deposits.
Dr Shamshad Akhtar, however, said that consumers have the choice to shift from saving accounts to term deposits to get higher returns, as it should be market-oriented approach.
Banks need to adopt e-banking at a fast pace, she said, adding it would also help bring down banking charges.
Regarding agricultural credits and micro-financing, the SBP governor said that banks have huge scope in these sectors, adding that current agricultural credits are around Rs 130 billion which is merely five percent of total loans disbursed by the banks.
She said that consumer financing is 21 percent of banking sector, which is led by auto financing.
Dr Shamshad Akhtar said banks need to look into the affairs of consumer financing as reports has been received about personal loans being used in real estate financing, which is not allowed by the central bank.
Regarding Basel-II application, she said it is not mandatory for Pakistani banks, but it would help Pakistani banks to perform more efficiently in line with international regulations.
She said that no more banking license would be issued in the country, adding there are 39 commercial banks operating in the country. "We need not crowd up".
Zubyr Soomro, managing director and Citigroup country officer Pakistan, Aftab Manzoor, Syed Ali Raza, president, NBP, President MCB R. Zakir Mehmood, President & CEO, HBL, Munir Kamal, President, KASB Bank, Naveed A. Khan, Country head, ABN Amro Bank, Nadeem Hussain, President & CEO, Tameer Microfinance Bank and Saad Zaman, CEO, Dubai Islami Bank, Pakistan, participated in the discussion.
Earlier, in first session on "Islamic Banking: A Rising Force in Global Finance" chaired by Pervaiz Said, Head of Islamic Banking, SBP speakers said that six Islamic Banks are operating in the country while 15 Islamic Banking Division of other commercial bank have also started their operation of Islamic banking in Pakistan.
They said that Islamic banking have much potential especially in the Sub-Continent due to commitment of the local population with their religion.
They pointed out that there are 280 players in 48 countries operating Islamic banking. Islamic banking is growing 15 to 20 percent globally.
Irfan Siddiqui, president, Meezan Bank, Imran Muhammad, head of Islamic Banking, Standard Chartered Bank, Hasan Bilgrami, Chief Executive, Bank Islami, Ehsun Zaidi, Global Head, Capital Markets, Dubai Islamic Bank PJSC, Dubai, UAE and Saad Zaman, CEO, Dubai Islamic Bank, Pakistan present their papers in this session.