World Banks ranks Pakistan first in corporate governance
Thursday, April 2, 2009
World Bank Report “Getting Finance in South Asia 2009” has ranked Pakistan first in the areas of corporate governance, performance and efficiency.In the area of access to finance, Sri Lanka ranks first in South Asia, on capital market development and market concentration and competitiveness in the banking sector first slot is grabbed by India.
According to the detailed report on Pakistan the bond market is developing at a lesser pace. The
domestic bond outstanding was 25.16 percent of the GDP, equivalent to $32.41 billion. This consists of mainly government bonds, as the corporate market is yet to develop. The areas on which Pakistan needs to focus are access to finance capital market development, and market concentration.
Access to Finance: Pakistan needs to focus on improving financial outreach through its commercial banking sector. Demographic branch penetration is low with around five bank branches per 100,000 people during the six-year period. To promote branch openings in rural areas, the SBP has introduced the Annual Branch Licensing Policy, which requires commercial banks with 100 branches or more to open at least 20 percent of their branches outside big cities and set up branches in Tehsil Headquarters, where no branch of any bank exists.
Financial stability: Pakistani banks maintained the regulatory CAR well above 8 percent. Strong returns and fresh capital injections to several banks resulted in this positive trend. Over the six-year period, the ratio increased to 13.33 percent in 2006. Leverage ratio almost doubled to 8.94 percent in 2006.
The gross NPL ratio reduced progressively from 19.6 percent in 2001 to 5.7 percent in 2006. The NPL position of the public bank should be monitored continually, however, because any adverse movements in this sector could have a negative impact on the entire banking industry, as public banks hold a significant share of the lending portfolio.
Banks’ liquidity position should be monitored carefully using measures such as maturity gap analysis, to find out the presence of any liquidity mismatches. The SBP would adopt the Internal Ratings–Based Approach from January 1, 2010, with banks and development finance institutions (DFIs) permitted to implement it sooner if the SBP approves their internal risk management systems.
The Pakistan bond market is still at its development stage and is dominated by government securities at around 97 percent. The lack of growth in the bond market should be a concern, however, as this deprives the market of an alternate funding source.
Corporate Governance: Pakistan leads the region in corporate governance scores. Some of the amendments would improve the self-governance; others, such as seeking SBP approval for 5 percent or more shares, need to be reviewed. Other areas to focus on include greater transparency and disclosure, greater accountability, further disclosures on beneficial ownership, safeguards on stakeholder rights, further improvements to responsibilities of the board, and further emphasis on self-governance for the institutions.
The SBP requires disclosure of beneficial ownership of shareholders, with the threshold set at 3 percent. However, this information is not available to the public. Investor rights relating to voting and shareholder meetings appear to be in place. The government can appoint directors to government-controlled banks only by virtue of its shareholdings.
Provisions for transparency and disclosure have met the main criteria, but the internal audit function has room for further improvement. Disclosure of audit fees paid to external auditors is required. To attract and retain qualified and competent staff, a review of compensation policies is needed. Banks are required to disclose the compensation of directors in detail.
Although the guidelines have been issued, the success of the governance procedure largely depends on commitment by the banks. Their approach to corporate governance should extend beyond simple compliance with legal requirements. This is an evolving process and cannot happen overnight. As such, the regulatory authority surveillance and enforcement is important. staff report
Labels: Economy and Business, Pakistan Economy
posted @ 1:03 PM,
2 Comments:
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At April 5, 2009 at 7:43 PM,
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if pak gets first- there is something seriouly wrong in the way it is evaluated
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At April 5, 2009 at 7:44 PM,
said...
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As per INS Rules- Green card holders can loose their permanent resident status if they remain outside of the US for more than one year.
They also loose their status if they frequently travel outside US. Many times they face harassment at the hands of immigration officers at US airports- and even at INS offices when they visit there just because they frequently travel outside US.
It is at the discretion of immigrant officer at point of entry to declare any returning resident as abandoned his residence.
This Rule can be highly discriminatory and harsh.
We have to respect human rights- and for humanitarian reasons I suggest that US residents may be freely allowed to travel abroad without any restriction. There is no harm if they travel abroad for long time for legitimate reasons.
They may be allowed to return any time – even after 5 years of stay abroad-because there may be retired seniors as residents. They have no jobs in US. If they do not travel aboard to make some legitimate money- they will depend upon US welfare system and they will be burden on US economy. If such a resident visit abroad to make some legitimate money- and remit some money to his family in US and also pays taxes- he is benefiting US.
Moreover- biggest issue here is to win hearts and minds of all categories of immigrants- make them love US and make them loyal to US.
I therefore request you to change this harsh Rule and let all green card holders freely travel abroad as many times as they want.
Let them stay abroad for as long as 5 years or even ten years
There is no harm in allowing them to travel just as US citizens can travel abroad freely...
If INS wants to check whether or not they still maintain their residency- let them make rule that all green card holders should file their tax returns and pay taxes.
This one rule alone should be sufficient to retain their green card but no restriction on overseas travel.
THE rule relating to green card holders returning
within 6 months was made when US economy was booming and US job market required manpower to fill the jobs.
At this time - US economy is in near recession- there are
not many jobs - and many jobs are outsourced.
So let green card holders work abroad- contribute to
taxes and this is also time to change rules.
Let green card holders work abroad just like US citizens.
I request Congress and Senate to pl introduce legislation-bill to change rules.
At present green card holders can apply for citizenship after 5 years physical presence in USA.
THIS rule is now outdated and needs new consideration with change in times.
Some green card holders have to spend time abroad on business
or income generating activity.
therefore pl introduce new legislation to permit green card holders to apply for citizenship without need for physical presence in USA- provided- they have a home in USA and have paid taxes for last 5 years.
jilluhafz@yahoo.com
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