KARACHI: The State Bank of Pakistan (SBP) governor has acknowledged that the economy is facing multiple challenges, but has reassured the nation that the central bank will play its due role in addressing the shortcomings through resource mobilisation.
Economic growth would be achieved through price stability and bank financing, especially for small and medium-sized enterprises (SMEs), agricultural sector and low-cost housing units, said SBP Governor Tariq Bajwa while addressing the 71st Independence Day celebration at the central bank on Tuesday, according to a press statement.
Bajwa briefly outlined the long-term steps taken by the SBP aimed at improving economic conditions in the country. These included ensuring price stability through improvement in the monetary policy framework.
“This stability supports economic growth, which in turn can lead to improved quality of life in addition to preserving the value of savings,” he said.
The governor pointed out that the banking sector had registered impressive asset expansion largely due to robust growth in advances to the private sector.
However, he emphasised the need for expanding banking products for all tiers of the economy, in particular SMEs, agriculture and financially excluded segments of the society.
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“SMEs are among priority sectors for their significant role in any economy, but they have largely been ignored,” he said.
The central bank had recently introduced the policy for promoting SME finance and voiced hope that it would lead to increase in banks’ lending to the SMEs.
Bajwa stressed that financial inclusion was important for monetary stability and economic development and for the purpose National Financial Inclusion Strategy was launched in 2015 that was aimed at ramping up the number of accountholders to 50% of adult population by 2020.
He also briefly threw light on the Asan Mobile Account and branchless banking which were expected to help increase financial inclusion in the country.
He said Pakistan, like other developing countries, had been facing shortage of housing units and there was a shortage of an estimated 10 million units.
One of the key constraints hampering the construction of housing units is unavailability of financing. In order to address the issue, the SBP, in consultation with relevant stakeholders, has developed a policy for the promotion of low-cost housing finance in Pakistan.
He voiced optimism that financial institutions would divert their resources towards that important sector.
Bajwa noted that the democratic process was continuing and members of the newly elected National Assembly had taken oath, which he called a good omen.
He was confident that the journey towards improvement in economic conditions would continue and assured the audience that the SBP would continue providing complete support to the newly elected government within its domain.
On the occasion, Bajwa announced the launch of a tree plantation drive across all 16 field offices of the SBP Banking Services Corporation (BSC) spread around the country.
Later, the governor inaugurated a special painting exhibition, arranged at the SBP museum, where work of 25 inmates of central prison depicted to the world how they saw the Independence Day while they themselves were imprisoned.
These inmates are students of Sikandar Jogi, an artist who has dedicated his life for teaching art to the students of deprived areas.
The open house highlighted the SBP’s history by displaying different images and videos. Pakistan Security Printing Corporation showed the printing of currency.
Commemorative coins, prize bonds and postal stamps were made available for purchase by the audience. To promote innovation of digital banking channels, several commercial banks put up their stalls to demonstrate the applicability of digital banking.
(This news/article originally appeared in The Express Tribune on August 15th, 2018)