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Financial Sector Reforms & Soundness Of Banks Operating In Pakistan

Author

Listed:
  • Azam Ali

    (Statistics & DWH Department, State Bank of Pakistan)

  • Ishaque Ahmed Ansari

    (Statistics & DWH Department, State Bank of Pakistan)

Abstract

This study assesses the impact of Financial Sector Reforms on the Soundness of Banks Operating in Pakistan over the last two decades.The paper attempts to answer the question does financial sector reforms have any impact on the soundness of banks? Consequently, it is found that financial sector reforms, introduced in late 1980s, made significant impact on the Soundness of Banks.There has been a consolidation and merger of banks, capital adequacy ratios look much stronger, asset quality has been improved stemming the flow of Non Performing Loans NPLs, and management has been strengthened by the induction of professionals at the top and second tiers.An important achievement in the last decade has been the transformation of a largely stateowned and weak banking system into healthier, primarily privately owned system.This has been facilitated by restructuring of major banks, ongoing corporate governance, and credit culture.The analysis strongly points toward the need for continuity of banking sector reforms.Though major efforts have been undertaken by the governments to update and improve the legislative framework, there remains a need to repeal, amend and update laws.

Suggested Citation

  • Azam Ali & Ishaque Ahmed Ansari, 2007. "Financial Sector Reforms & Soundness Of Banks Operating In Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 3(2), pages 65-69.
    • Handle: RePEc:aib:ibtjbs:v:3:y:2007:i:2:p:65-69
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2007.32.1
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    References listed on IDEAS

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    1. Raghuram G. Rajan, 1998. "The past and future of commercial banking viewed through an incomplete contract lens," Proceedings, Federal Reserve Bank of Cleveland, issue Aug, pages 524-550.
    2. Flannery, Mark J, 1998. "Using Market Information in Prudential Bank Supervision: A Review of the U.S. Empirical Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 273-305, August.
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    2. Giovanni Ossola & Guido Giovando & Chiara Crovini, 2016. "Analysys of Gross Loans and Reserves for Impaired Loans of Italian Listed Banks," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 6(1), pages 73-84.

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