Pakistan Banking Industry 2016 and Year 2017

Year 2016 has come to an end and we will get  financial results and analysis of different banks in upcoming few days. Banks have taken lot of measures and formulate strategies in order to improve the Financial results especially to take growth in profitability due to Discount Rates reduction continuously. News of merger of small banks and seen to take immediate and enhanced efforts to focus on Cross Sell and Insurance Business in the name of Bancca Assurance. Insurance companies have successes to get more place in the top management of banks to introduce this product and reap handsome profitability business from this segment.

Even some banks are seeing to reduce their expenses on petty items like Telephone, stationery etc. Due to discount rate reduction, rates on savings of the people also got reduced.

Current account in different names with value add free of cost benefits got been introduced in order to attract the customers and enhance deposit.

But overall focus remained upon Cross sell business i.e Insurance, leasing of auto products and Credit cards etc. in the field. However, no any specific policy have been seen regarding lending of SMEs in the field for prosperity and well being of retail business community or normal layman or farmer of our economy. Lack of steps to facilitate the layman to avail banking products seen throughout the year except introduction of Aasan account.

Micro finance institutions also got place in the economy and increase its business. Micro finance institutions become successful to introduce and get name fame in the economy like NRSP, Finca and Advace Micro Finance, First Micro Finance etc.

I know this all is short term strategy by the banks which have been adopted during 2016 for maintaining and growth of Profitability. Any how it is small review of banking sector prevail in the field seemed to be in during 2016.

Now, I would like to discuss banking industry for the year 2017. Almost policies will remained same in the upcoming year by the banks like focus on Bancca Assurance, Credit Cards, leasing of Auto products due to higher profitability margin from these products.

However, banks should review their strategies and policies and take some measures in order to increase banking consumers. Banks have much more potential in SMEs and common layman of our economy. Procedure and system must be reviewed again that our layman with simple CNIC become consumer of banking sector. Millions of our part of society still without bank accounts.

Policies are required in line with well being of our common man of our economy in the long run except putting attention upon Insurance, Autos and Cards business. Policies and procedure should be simplified keeping in view the common man for lending instead of corporate clients and big giants of our society. Services of layman customers which are almost 95% of bank books and foot print of deposit business should be improved. With value add services to these 95% layman will attract que of new business for the banking  sector. Improved lay man services will unearth lot of potential for the banking sector in the economy.

Long Term methodology is quite necessary at this time by banks for long term and consistent growth in banking business as well as growth of our economy as an active Economic and Social partner in the Economy. Hoping Banking industry will flourish its business in year 2017 and CPEC project will add a lot in order to increase the economic activities in our country.