Only five banks own 50% of all bank assets in Pakistan: study

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ISLAMABAD – A recent study by Fair Finance Pakistan found that only five banks hold 50% of all banking assets in Pakistan, while 10 out of 29 banks reviewed are not registered with the Pakistan Stock Exchange.

The report of Fair Finance Pakistan (FFP) on “Strengthening Sustainable Finance in Pakistan: A Review of the Scope of Institutionalizing Fair Finance in Pakistan”, gave an analysis on financial inclusion in Pakistan which is 21 % against the State Bank’s ambitious target of 50% by 2020. The report is authored by Dr Abid Aman Burki of Lahore University of Management Sciences.

This was discussed at the annual meeting of the Fair Finance Pakistan Coalition. Coalition members signed a declaration of solidarity urging commercial banks and regulators to conduct their business responsibly by adopting the State Bank’s Green Banking Guidelines to integrate environmental, social and governance (ESG) criteria. , guarantee universal access to finance and integrate the United Nations Guiding Principles for a Responsible Bank. at their strategic, portfolio and transaction level.

The two-day meeting was organized by Fair Finance Pakistan (FFP) with support from Fair Finance Asia. Representatives from the State Bank of Pakistan, Rawalpindi Chamber of Commerce and Industry, members of civil society, academics, trade unions and the media joined the meeting.

Speaking on the occasion, social activist Jawad Ahmed insisted on equal access to opportunities and resources for all Pakistani citizens regardless of race, religion, ethnicity, nationality or background. sex. He underlined the role of institutions, media and government in ensuring equitable and people-centered social, economic and political participation. Highlighting inequality as a major obstacle to people’s development, Jawad Ahmed emphasized the empowerment of citizens, especially women and minorities, to actively participate in the socio-economic development of the country.

Emphasizing the role of the business community in promoting green practices, Talat Awan, Vice President of Rawalpindi Chamber of Commerce and Industry (RCCI) highlighted RCCI’s initiatives to use business models. renewable energy. The Chamber generates its own 50 MW electricity and has installed a rainwater harvesting plant that provides water within a one kilometer radius of the Chamber. The RCCI is one of the first chambers in Pakistan to adopt the green model, said Talat Awan.

Coalition members at the meeting discussed how to leverage learning so that banks operate responsibly by integrating human rights into their operations and policies and incorporating the guiding principles of banks. United Nations on responsible banking and adhering to the Paris Climate Agreement. Participants pledged to amplify citizens’ voices for sustainable finance and highlighted the role of banks in ensuring responsible project finance, the transition from reporting to compliance, financial inclusion, especially for women, and taking into account social and environmental impacts for the well-being of society.

Muhammad Tahir, Senior Deputy Director of State Bank Lahore, stressed the importance of incorporating green banking guidelines to foster a culture of responsibility in the banking sector. These guidelines oblige banks to put in place adequate mechanisms that identify, assess and mitigate the environmental risks of their customers. The development of the State Bank’s draft policy “Banking Policy for Equality: Reducing the Gender Gap in Financial Inclusion” was also discussed. The policy aims to promote equal opportunities for men and women to access formal financial services. The missing links of social and governance criteria in ESG criteria at the policy level of the State Bank were identified as areas for improvement.

Global lessons and successes were shared by Sweden and the Philippines, demonstrating the impact of civil society on the banking sector. Policy Assessments of Banks Undertaken in the Philippines. Thailand and Sweden are recent examples of the success of the FFGI methodology for rating banks and set a benchmark for other countries to follow.

Speaking at the meeting, Mr. Asim Jaffry, Program Manager, Fair Finance Pakistan, said green banking guidelines must shift from reporting to compliance to help reduce environmental, social and human rights impacts.


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