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SBP mulling five-year strategic roadmap on payment systems KARACHI STAFF REPORT
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HE central bank is weighing various options for preparing a five-year strategic roadmap to modernize and expand payment systems in the country where branchless banking is growing rapidly. “A proposal is under consideration at SBP for the preparation of Payment Systems Strategic Road Map for the next Five Years,” Governor State Bank of Pakistan (SBP) Yaseen Anwar Wednesday told a workshop in his opening remarks. The “Future of Branchless Banking, Payment Systems and Financial Inclusion” was jointly organized by the SBP, Pakistan Telecommunication Authority (PTA) and Consultative Group to Assist the Poor (CGAP) of the World Bank here at a local hotel. Stressing the urgent need for modernizing and expanding the payment system infrastructure segments, Anwar urged the banks and mobile network operators (MNOs) to promote branchless banking for the benefit of the country’s un-
banked and underserved people. “If the banks and mobile network operators want to succeed, they have to assign a strategic priority to branchless banking,” the SBP Governor said. He said the boards and chief executives of banks and MNOs must have ownership of branchless banking which would help to bring commitment, attention, and support from every level of the organizations to this innovative, exciting and challenging service. Anwar said SBP had taken several policy and developmental initiatives to promote financial inclusion in the country. “Today, our regulatory environment for microfinance and branchless banking is considered one of the best globally,” he said. “As a result of SBP regulations on branchless banking, we have seen emergence of four mobile banking deployments which are not only advancing new frontiers for financial inclusion but also pushing the expansion in the payment ecosystem of
the country,” said Anwar. These providers, he said, were investing heavily in hiring, training and branding their agents, thus contributing to the development of a new layer of distribution network for serving largely unbanked market. The SBP Governor said mobile phone subscribers were almost 120 million, while the bank accounts stand at 32 million whereas the number of borrowers was only 5.7
million. This, he said, indicated that there exists a large “financially-excluded” market. “Bringing this un-served market into the formal financial system is our key objective as we believe that this would enrich the socio-economic development of our country,” he said. He pointed out that the brick and mortar retail network of the entire financial industry of Pakistan stood at around 11,000 outlets
after 65 years while the branchless banking retail agents’ network had grown beyond 32,000 agents in a short span of three years. With almost 1.8 million mobile banking accounts, the branchless banking customers conducted almost 32 million transactions worth Rs 140 billion during the quarter ending September 2012, he said, adding the average size of each transaction is Rs 4,065 which shows that technology was helping ‘financial access’ of the unbanked population of the country. Anwar said 90% of total bank branches were currently processing real time online banking services across the country. “One million internet banking users, 1.8 million mobile phone banking users, and more than 10 million call center users are enjoying virtual banking,” said the governor. He emphasized upon the mobile network operators to come up with creative marketing
strategies and financial literacy schemes that provide basic learning and educative experience to their customers. The SBP Governor observed that a robust payment infrastructure is critical for the long-term development of mobile phone banking. “Banks and MNOs have to develop partnerships to expand the agent network, leverage communication bearer channels, develop client acquisition strategies, and build a robust risk management framework,” he said. Anwar said the last five years’ average shows that 36% of the transactions were routed through electronic channels depicting a 23% average yearly growth as compared to 2% average growth in paper based transactions. Although, these statistics show an increasing trend, which is still insignificant for a country of 180 million inhabitants with a high currency in circulation of Rs 1.9 trillion, he said, adding that this high currency in circulation is due to the fact that majority of our population is disconnected from the banking system, and is heavily reliant on cash-based transactions.
WB sets $900m aid programme for Iraq Pakistan stock market on a
WASHINGTON AGENCIES
The World Bank announced Tuesday a $900 million support plan for Iraq aimed at helping the war-ravaged country better manage its human and vast oil resources. The World Bank’s four-year support for
Iraq, through 2016, will focus on job creation, social inclusion and building stronger institutions, the institution said. The announcement came exactly one year after the last US troops left Iraq, ending the nearly nine-year war that ousted dictator Saddam Hussein’s regime and left Iraq shattered. The World Bank said the new program was
designed together with the government of Iraq. The support will help Iraq in managing its resources more efficiently and effectively, and promote the diversification of the economy and private-sector growth “for the benefit of all citizens,” it said in a statement. “Iraq is opening a new chapter in its long and deep history,” said Ferid Belhaj, the World Bank’s country director for Iraq, Syria, Iran, Lebanon and Jordan. “This is a chapter where the people come first and where the immense human potential of the country, its vast natural resources and its strategic location will be central to its socioeconomic recovery,” he said. Belhaj pointed out the program was the first full country partnership strategy between the World Bank and the Iraqi government. “It will allow the World Bank to align its program of support over the next four years with the government’s National Development Plan,” he added. The development lender noted that Iraq remains fragile and its economy is dominated by a large public sector due to a legacy of centralization. The Bank strategy will focus on improving governance and social inclusion, particularly the inclusion of women. “Proper management of Iraq’s vast oil wealth and human resources, coupled with a conducive and efficient investment climate, will be key to inclusive growth and job creation,” the Washington-based institution said.
roll over the past 6 months ISLAMABAD AGENCIES
Pakistan Stock Markets has outperformed from June 30 to December, 7 of the current year among Global Stock Markets including India, China, Hong Kong, Tokoyo, USA and UK. Stock Analyst, Zaheer Ahmed told APP that the participation of foreign investment was the main reason behind the better performance of Karachi Stock Exchange (KSE). In addition, the better return on Pakistan Stocks has also attracted the foreigners which they did not find in the other Global Markets, he added. The Analyst said that aside from this, the local investors had found the best avenue in the capital market because of consecutive decline in the discount rate. KSE-100 Index has witnessed an increase of 21.8 per cent from 13801.41 to 16807.91 during period of last six month. In the same way, the US S&P 500 has registered an increase of 3.8 per cent while the UK FTSE 100 was up by 5.8 per cent during the period under view. The Index of Tokoyo NIKKEI 225 stood at 9,527.39 with an increase of 5.8 per cent as compared to 9,006.78 during the last six months. Besides, The Hong Kong went upward by 14.1 per cent but China Shanghai Composite witnessed a decline of 7.4 per cent. Aside this, Bombay Sensex Index stood at 19,424.10 against 17,429.98 during the last six months with enhancement of 11.4 per cent. Meanwhile, Total Market Capitalization has witnessed an increase of 19.7 per cent from $37.24 billion to $44.58 billion during the period of last six months.
Asian shares up on US hopes, Greek upgrade lifts euro HONG KONG AGENCIES
Asian markets were boosted Wednesday as US politicians look to be closing in on a deal to avert the fiscal cliff, while the euro added to gains in New York after Greece’s debt rating was upgraded.Tokyo shares surged 1.12 percent, a third straight rally, to break 10,000 for the first time in eight months ahead of an expected Bank of Japan announcement on monetary policy. Hong Kong rose 0.51 percent, Sydney added 0.42 percent and Seoul was 0.51 percent higher, but Shanghai eased 0.30 percent. The main focus continues to be on the United States, where lawmakers are holding talks to avert the huge tax hikes and deep spending cuts slated to come into effect in two weeks. Most economists expect the package to tip the US economy into recession if a new deal — with less swingeing measures — is not agreed in time.
However, there is growing confidence that progress is being made in the negotiations, with top Republican lawmaker John Boehner saying he is willing to see taxes rise for people on more than $1 million — rather than his previous position of no rises at all. President Barack Obama has also said he is willing to see rises for people on more than $400,000, rather than the $250,000 he previously wanted. Adding to the upbeat sentiment was news out of Europe that Standard & Poor’s raised Greece’s sovereign debt rating by six notches, citing support for Athens from its eurozone partners. The upgrade from selective default to B/B “reflects our view of the strong determination of European Economic and Monetary Union (eurozone) member states to preserve Greek membership in the eurozone”, the agency said. Greek Finance Minister Yannis Stournaras said the decision “was a very important one that created a climate of optimism”.
The move came after Greece completed a debt buyback programme and eurozone finance ministers approved the latest batch of bailout cash. Tuesday’s decision provided a fillip for the euro, which added to recent gains against the dollar and yen. In early forex trade, the single currency firmed to 111.54 yen from 111.47 yen in New York late Tuesday, while it was at $1.3231, from $1.3225. On Tuesday in Asia the euro was at $1.3165 and 110.49 yen. And the dollar was quoted at 84.32 yen, compared with 84.28 yen in New York. The Japanese currency remains under pressure as traders await the end of a twoday BoJ policy meeting on Thursday, with most expecting fresh monetary easing to kickstart the economy. Incoming prime minister Shinzo Abe Tuesday asked central bank chief Masaaki Shirakawa to adopt a two percent inflation target, just days after his landslide election win on a promise of pressing for more aggressive monetary eas-
ing.
The weak yen again fuelled a rally on the Nikkei, which hit its highest level since early April. There appeared to be little reaction to data showing Japan’s November trade deficit expanded 37.9 percent on-year to $11.3 billion, a record for the month, with exports to China slumping owing to a bitter
territorial spat with Beijing. Oil prices rose, with New York’s main contract, light sweet crude for delivery in January rising two cents to $87.95 a barrel and Brent North Sea crude for February delivery advancing eight cents to $108.92. Gold was at $1,674.44 at 0200 GMT compared with $1,698.90 late Tuesday.
Thursday, 20 December, 2012