Conmutación y regulación de voltaje

Pakistan is a South Asian economy that gained independence from British Rule on August 14, 1947. In 1947, Pakistan was an agricultural economy and 53% of its gross domestic product (GDP) was contributed by agriculture sector. However, over a period of 77 years, a number of structural changes occurred in the economy of Pakistan. The most prominent change among those was the replacement of agriculture sector with the services sector that became the dominating sector of the economy with a contribution of about 57.7% to the total GDP in 2012 (Economic Survey 2012). Financial sector is the part of the services sector with 5.2% share and contributes 3.0% to the GDP. Financial sector plays an important role of intermediation by mobilizing savings and providing optimal allocation of funds in the economy. Financial system in Pakistan consist of; regulators, banks, microfinance institutions (MFIs), non-bank financial institutions (NBFIs), insurance companies and the stock market. Banking

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sector is the leading player in the financial sector that contributes 73 % in the total assets of the financial sector (Economic Survey 2012).

In broader terms, bank is a business organization engaged in the business of borrowing and lending money that earns income by borrowing at a lower rate and lending at a relatively higher rate. In Pakistan, banks are the companies that operate in accordance with the provisions of the Banking Companies Ordinance 1962, Section 5(b) that says: “banking means accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, drafts, orders or otherwise”. According to section 8 of the Ordinance, it is obligatory for any banking company or its subsidiary to use the word “bank” or any of its derivatives as a part of its name.

Formerly, the financial system of Pakistan was regulated and supervised by three authorities: State Bank of Pakistan (SBP), Pakistan Banking Council (PBC) and Corporate Law Authority (CLA). SBP was established in 1948 and dispensed its function as the central bank under the constitution, laid down in the State Bank of Pakistan Order, 1948. PBC was established as a holding company under Banks Nationalization Act, 1974 to monitor the performance of nationalized banks. It was also responsible to perform different banking related functions in line with the nationalization objectives. CLA was established in 1948, to regulate the capital market under the Ministry of Finance (MOF).

Under State Bank of Pakistan Order 1948, SBP was vested with the role of central banking and was responsible for securing stability of monetary and credit system of Pakistan. Later on, State Bank of Pakistan Order 1948 was replaced with the State Bank Act 1956, according to which basic objectives of SBP were the maintenance of monetary as well as credit system stability and the promotion of economic growth.

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SBP had substantial overlapping of regulatory functions with PBC and CLA that caused considerable distortion in the supervisory role of SBP. With PBC this overlapping occurred in matters regarding public sector banks and development financial institutions (DFIs), and with CLA this was related to non-bank financial institutions (NBFIs).

In 1997, restructuring process was introduced to streamline the regulatory and supervisory role in the banking sector. As a result, regulatory functions of PBC and SBP were consolidated. SBP was vested with the sole authority to supervise and regulate all banks and financial institutions whereas PBC was dissolved.

A new regulatory organization, Securities and Exchange Commission of Pakistan (SECP), was set up under Securities and Exchange Commission of Pakistan Act 1997, to regulate the capital market, leasing and investment banks. SECP became operational from January 1, 1999 and replaced CLA by taking over all its operations. The main difference between CLA and SECP was that former was an attached department of Ministry of Finance (MOF) whereas the latter was established as an autonomous body within the framework of SECP Act, 1997. Initially, SECP was concerned with the regulations of the capital market, Central Depository Company (CDC), credit rating institution and corporate sector. Overtime, its area of operations expanded and it had been assigned the supervision and regulation of insurance companies, non-bank finance companies (NBFC), and private pensions.

With a view to strengthen the SBP‟s role as an independent and efficient regulator, SBP was organized into three distinct entities in 2001 as a part of the reform and restructuring process. These entities are:

1. The SBP – the central bank,

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3. National Institute of Banking and Finance (NIBAF) – delivery arm of SBP for all the training needs.

Currently, SBP and SECP are the two financial regulators operating in Pakistan. SBP is responsible for the supervision and regulation of banks, microfinance banks and DFIs whereas NBFIs, insurance companies and the stock markets are under the control of SECP. The term “bank” is normally used for the scheduled banks operating in Pakistan. According to section 37(2) of State Bank of Pakistan Act 1956, banks having a paid up capital and reserve not less than Rupees 0.5 million and fulfilling certain other requirements are declared as scheduled banks. Scheduled banks cover two broad categories of banks: commercial banks and specialized banks. Commercial banks are categorized into public sector banks, private banks and foreign banks. The current study has only selected the data set of commercial banks therefore the use of word „bank‟ in this dissertation only refers to commercial banks instead of scheduled banks. The structure of financial system of Pakistan is depicted in the following diagram.

Figure 3. 1 The structure of the financial system of Pakistan Financial System of Pakistan SBP Scheduled Banks Commercial Banks

Public Sector Banks

Private Banks Foreign Banks Specialized Banks DFIs MFIs SECP NBFIs Insurance Companies Pension Funds Stock Markets

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