By: Umar Latif (NBP Share Holder) The present international circuit of economic situation is in distinct disarray, turned into distress.
It is, by and large, attributable to self inflicted injuries and its complexities compounded by persisting with vigour unsound, undesirable role and performance, carry on carelessly, ceaselessly too, by top brass, led by graceless greed breeds of the banking sector. Once the banks considered as fort builders of the capitalism, have by willing foul play with credit and lending manipulations, created submerging storm of bad debts and resultant structural weakness, have shattered confidence in capitalism itself!. However, no alternate good, reliable, suitable system being in picture, efforts are concentrated on revival of banking sector on fair footings and have inbuilt strong check and balance system to prevent shock shrills to the entire economic edifice in future. The ailment of economic bad weather begun from the United States of America, spread instantly in its close allies being the entire Europe Union, eventually leaving no country immune from shattered set up of banks, spreading its impact to the basic economic situation. In consequence, other countries having economics coordinated linkages have similarly suffered. All are eagerly engaged in overcoming the present perils and put the house base in order to come back to business on sound track and serve public interests better. This tends to be the desire of almost all the countries, but it needs to be converted, to put into genuine economic term, into want. Want refers to have resources to meet. Fake money creation as the monetary system evolved under half cooked and half baked system of the ‘Quantity Theory of Money’ evolved by Lord John Mynard Keynes in 1940s, being followed without required reforms in its past format, which proved exceptionally useful in economic rebuild of the Europe from its ruins resulting from the Second World War. Reconstruction at a pace from ruins and steady reformative process of peace times would have different course of conduct. However, no one of the standing seen match to Keynes, his prescription of monetary system is being administered by the followers and the result has been disruption of the entire economic structure built on his prescription. There is need, urgent indeed, to have an improved version of the prescription to be suitable for over coming of the present perils. In aftermath of developed economies disdain, developing economies, dependent on the former in several dimension of monetary policy format, have been under more stress, massive distress. Pakistan is not immune or exception to fast spread virus flowing from the economic powers ‘prowess’, which remains a dominant force.
Coming back to the subject, the point wanted to be made here has been that the banking sector performance demands to be properly regulated so that epidemics of its virus coming from outside sources does not sicken a national segment. Though it is task not impossible to perform, it is difficult to reorient, provided one wants to manage it by combination of vision, imagination, skill and dedication to be the enterprise. It sounds difficult to organize required resources. These remains scattered, spread out and must be found. In its narrow lanes, some persons are performing well against numerous odds. This is real life affair. Banking sector of Pakistan is a mix plate of equally divided banks, in good and bad shape! It seems to be a strange reality, not beauty to adore. But it has good reason. In the period of government preceding the past one of the Pakistan Peoples Party Patriot, a banker ‘crowned’ Prime Minister of Pakistan brought several foreign banks into Pakistan and at the same time allowed from within to set up new banks in private sector of the country. Then the interest rate in double digit, prevailed for long run, proved beeline for the bankers from abroad and within.
At present, of the 22 banks listed/quoted on the stock exchanges of Pakistan, 12 banks share prices are quoted at premium and of other 11 banks are quoted below par value, for years at a stretch. Still worse is the situation of other financial institutions, produced liberally in those days of ‘delight for sharks in the pond’. It has become polluted and will take years to clean it of dirt, being deliberately dumped into it by vested interests. Be it any grim situation, ray of hope remains always there, to see and be happy, have hopes of revival, some time in course, though not instantly. During the past decade plus time, the private sector has been on back foot of business, in particular of creating industrial enterprises. There have been several reasons for it, in addition to energy shortage of serious significance and value of our currency Pak Rupee on cascading down scale. Even trade has been seen in troubled waters. It is in poor shape, for reasons no need to list as we all know, know well. Business borrowings from the scheduled banks, their main source of support, has been negative, means payout of debts by business instead of get more for business growth and line up leverage gain in support of equity strengthen. This shows the scale of economic setback and its collateral damage has been huge, unprecedented will not be word worthless in description to explain the scenario.
In the grim global and intricate internal situation performance of our National Bank of Pakistan has been eye softening, pleasing, as it recently received remarkable recognition from the international circuit for its enviable performance during 2013. It has received a global appreciation, not easy in the present odd time for the banks, in the global circuit and so also in our small screen for it. NBP has been placed at number one bank of Pakistan in top 1000 world banks 2013 rated by The Banker. Global Finance, Project Finance, Euro-money, the Asian Banker have all jointly endorsed this fact. The role played by the NBP in Pakistan in the recent year relates to and underlined as ‘Domestic Retail Bank of Pakistan the Year 2013’ and another for ‘Pakistan Domestic Technology & Operations Bank of the year 2013’.
The most unique feature in recognition and shower of appreciation has been the NBP attention paid for equitably providing support simultaneously to the retail and wholesale segments. Asian Banking & Finance refers it to Retail Banking Awards and simultaneously this prestigious publication highlights Wholesale Banking Awards ’13. It is indeed inspiring and worth appreciation and acknowledgment that both the key sectors of the economy, wholesale and retail, backbone of the economy, have been paid attention due, if not more than due and striking balance in dealing the both wings is indeed commendable. At home the rating agency JRC-VIS has given NBP position of AAA/A+1, fascinating it is all for us. People of Pakistan, particularly its business, can visualize about the role so significant played by the NBP and its management with discreet quiet and cool. It is more desirable to appreciate the feat achieved in trying times. Caliber comes to light by fight against all odds, as the banking business has been in it.
Being the government bank, NBP has certain constraints and restraints and in it to put up performance appreciated by others in the filed is indeed a fascinating feature. The bank is in good shape as to its fiancés clearly visible by dividend payout being attractive rate of cash 70% and stock at 20% as final for 2012. It endorses good going and a promise for further sails smooth. The NBP deserves patronage by the Nation as it is its asset and strength against odds innumerable. Let we all move together for economic success of this country and sweetened social welfare of its people. It can not come from outside. Allah changes the conditions of people for gratifying goods who put up efforts untiring for it. It is time to face challenges of the future with unity, faith and discipline, the doctrine provided, prescribed by the Father of the Nation, Quaide Azam Mohammad Ali Jinnah