KARACHI: The Governor State Bank of Pakistan (SBP), Dr Ishrat Hussain said on Thursday that the implementation of the Basel-II agreement on exposure and security standard would take place in 2007.
While inaugurating an international conference on the subject of WTO and Basel-II agreement, he said that the SBP has already issued a detailed roadmap for the implementation of Basel-II.<br>
He said the SBP has already issued comprehensive guidelines to the banks and the financial institutions.
The conference was organised by the Association of National Development Finance Institutions (ADFIMI) in member countries of the Islamic Development Bank, which is member of the Organisation of Islamic Countries (OIC).
Referring to the WTO, he said: “It is misplaced. It has been raised primarily by countries with artificial textile sector that benefited from the quota restrictions in terms of Multi Fibre Agreement on Textile.”
He said that the removal of quota walls would allow countries like Pakistan to exploit their true potential in the sector.
He said the WTO is more in the interest of developing countries because of their inherent advantages in agriculture sector, after the issues of subsidies and non-tariff barriers are adequately addressed.
Earlier, while welcoming the SBP Governor, Rashid Zahir, Chairman of the Association of National Development Finance Institutions in member countries of the Islamic Development Bank (ADFIMI) and Chief Executive of the Pak Saudi Bank advised the policy-makers to establish a WTO University in Pakistan to meet the WTO challenges.
Presenting his report with regard to performance of ADFIMI, he said: “The establishment of an eminent institute or a university specialising in WTO needs to be considered in high quarters as soon as possible”.
The event was jointly organised by the Pak Saudi Industrial and Agricultural Investment Company and the ADFIMI.
Zahir said that ADFIMI has extended training facilities to more than 1,500 bankers of the Muslim world.
He said that non-compliance with the Basel-II would not be a good choice as it would downgrade the rating of the banking system of the country and in turn would affect payment of higher risk premium to international financial market to avail the services.
He said that the activation of the WTO, lifting of tariff barriers and the removal of quota walls demand competitiveness.
He aid it is time to conduct impact study of various provisions and clauses of WTO principles and their implications for various segments of the economy.
He said to survive in WTO environment with dignity and honour modern technology and adherence to global standards such as ISO-9000 and ISO-14000 will be the fundamental requirements.
While appreciating the performance of State Bank of Pakistan he suggested that cost factor and need for simplification of the cumbersome system and procedures should be given due consideration.
He was of the view that implementation of Basel-11 accord does not neglect the credit needs in some scoters of the economy which do not measure up to lofty standards of the accord but otherwise meet the demands of equity and social justice
He aid in the WTO era only those financial institutions will truly excel which can adjust themselves to the changed market environment and tap their employees commitment and capacity to accede to such changes.