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August 15, 2020

‘Global regulatory environment poses ‘lot of’ challenges to Pakistan’

Business

August 15, 2020

KARACHI: Pakistan economy is facing strong headwinds of global regulatory obligations and banking sector is playing its role to comply with requirements of the Financial Action Task Force (FATF), a top bank’s executive said on Friday.

“The global regulatory environment poses lot of challenges to the banking sector and the Pakistan economy in general,” said Arif Usmani, president of National Bank of Pakistan (NBP) in a statement. Usmani said the NBP is improving local and global regulatory compliance and strengthening risk management, anti-money laundering / know-your-customer and controls practices while capitalising on technology. After repetitive postponement, global financial watchdog is now slated to announce its decision on Pakistan’s status pertaining to its compliance with anti-money laundering and combating the financing terrorism in September.

NBP president emphasised significance of digital-led financial inclusion to achieve sustainable and inclusive economic growth. “Positive correlation of economic prosperity with financial inclusion is an established fact and digitization plays a critical role in complimenting this correlation,” Usmani said.

NBP president further said freedom is the right of every man and independence is the right of people. A significant population of Pakistan remains below the poverty line and small and medium enterprises although being the backbone of the economy are relatively apart from the formal sector.

Usmani said COVID-19 has taken the world into a state of emergency. “The economy is losing its balance and once solid entrepreneurs and companies are forced for bankruptcies. Banks are now the safety net that will have to catch the economy in free fall. Relaxations provided by regulator to support the economy, banking sectors and preventing business to opt for laying – off its workers is really commendable.”

NBP president said the bank is assuming a lead role in promoting remittances through legal channels cognizant of the fact that the country is relatively deficient of foreign exchange.

“We have collaborated with Pakistan Post which created the largest remittance payment network in Pakistan with over 2,000 payment location,” he said. “Besides, customised products in collaboration with Bureau of Emigration and Overseas Employment have been launched to provide banking facilities to intending emigrant workers. Resultantly our market share in remittance business along with remittances volume has considerably increased during the last two years.” NBP has more than 1,500 branches. It is catering to every aspect of banking including Islamic banking, corporate banking, trade finance, agriculture, small and medium enterprise and retail, treasury and home remittances. It also functions as government treasury and have the largest rural network in the entire banking industry.