State Bank of Pakistan (SBP) Governor Yaseen Anwar said on Tuesday that Pakistan Remittances Initiative (PRI) has helped increase the country's annual remittances from $6.5 billion in 2008 to $12 billion (projected for the current fiscal year).
Talking to media here on Tuesday after speaking as chief guest at the inaugural session of the two-day 2nd International Conference on Islamic Business (ICIB- 2012) organised by the Riphah Islamic University at National Institute of Banking & Finance (Nibaf), Yaseen said that measures taken by the regulator under the scheme brought discipline in the financial sector and led to merger of informal sector into formal.
He said in 2009, the SBP issued guidelines about home remittances related to Agreements of Exchange Companies with Foreign Entities and launched a gross settlement system - RTGS. He said RTGS introduced by the central bank enabled the banks making large-value payments to one another in real-time, using online telecommunication facilities and payments are settled on gross basis in real time thus minimising the systemic risks that are inherent in large-value net settlement system.
Yaseen also clarified that his statement in the Senate Standing Committee regarding injection of liquidity was not reported in the right context and explained that he did not mean that failure to do so by the regulator would result in collapse of financial system. He said the money was being injected to maintain stability in overnight cost of borrowing and to protect weaker institutions from being running into business collapse owing to higher rate.
To a question about the requirement of maintaining minimum credit limit by banks, Yaseen said the limit was fixed during good times when there was no financial crisis. In reply to a question of foreign media about the role of the central bank to promote Islamic banking in Pakistan and other Islamic countries, Yaseen said Islamic banks have huge potential in the agriculture sector and the SBP has been taking very aggressive measures for creating awareness in this regard. About obstacles, he said lack of training, capacity building as well as understanding about risk management are the major obstacles in the way of Islamic banking.