State Bank of Pakistan Governor Dr Shamshad Akhtar has said that though Pakistan ranks first in South Asia in corporate governance, it still needs to catch up with the best global corporate practices implemented in more developed countries.
Addressing the convocation and price distribution ceremony of the Institute of Bankers Pakistan, she said that good corporate governance is essential in the banking sector, which is connected with practically every economic activity in the country. She said that Pakistan’s banks and its corporate sector should learn from global experience, where lapse in corporate governance caused the meltdown of East Asian economies in the late 90’s, and of corporate giant Enron at the start of this century.
She stated that taking cue from the lapses in governance, Malaysia and Singapore have taken corrective measures for the corporate governance level in these countries to meet best global standards. She added that Pakistan, particularly its banks, should improve transparency and accountability to ensure long-term viability.
The SBP Governor said that even after reformation of the banking sector in Pakistan, it is still facing some governance issues. She said that the central bank is trying to address these issues through prudent regulations. However, she also said that the structure of the local banking industry is such that issues have to be tackled in line with shareholding of the banks.
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