Abstract
Pakistan’s banking sector has progressed rapidly in the
last few years. The trend of consolidation in the industry,
which began in the US and spread to Europe, Middle East,
and South East Asia, has now reached the subcontinent.
A process of consolidation as a viable solution has
followed each crisis in the banking sector. In the aftermath
of the crisis in South East Asia in 1997, when capital
outflow plunged the banking sector, central banks of the
states found consolidation as one of the crucial remedies.
Since Pakistan was following the South East Asian model
of financial liberalization, it also adopted consolidation
under the supervision of the International Monetary Fund.
After the collapse of Asian tigers, weak banks were asked
to increase their paid up capital from PKR 500 million to
PKR 1 billion. As a result, banks had to take the
consolidation route. State Bank of Pakistan became
powerful regulator after an amendment in 1997 Act.
The following study is an attempt to find the reasons of
consolidation in the banking sector of Pakistan.
Ziaul Haque Memon, Faisal A. Shaikh. (2003) Consolidation In Pakistani Banking Sector, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-01, Issue-1.
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