ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has called for reducing the dominance of banks in Pakistan’s debt markets and expanding participation by non-bank investors as part of a broader effort to strengthen and modernise the country’s financial system. He emphasised that the government is pursuing coordinated reforms across the entire financial sector to support sustainable economic growth and improve market depth.
According to a statement issued by the Ministry of Finance, the minister expressed these views during a meeting on Friday with Securities and Exchange Commission of Pakistan (SECP) Chairman Dr Kabir Ahmed Sidhu and Commissioner Ali Farid Khawaja, who called on him at the finance ministry. Senior officials of the Finance Division were also present during the meeting.
The finance minister highlighted that under the Capital Markets Development Council, the government is moving beyond traditional institutional silos and promoting reforms that cut across the financial system. He stressed that while banks have historically played a central role in financing, there is a growing need to strengthen debt capital markets and diversify sources of funding. In this regard, he underscored the importance of increasing the participation of insurance companies, pension funds, asset management institutions and retail investors.
Welcoming the new leadership at the SECP, Senator Aurangzeb expressed confidence that Dr Kabir Ahmed Sidhu’s domestic and international experience would contribute significantly to modernising Pakistan’s capital market regulatory framework. He said effective regulation and forward-looking reforms were essential to building investor confidence and ensuring long-term market development.
During the meeting, participants reviewed a range of proposals aimed at increasing the number of investors in capital markets, diversifying financial products and improving the overall efficiency of the system. The discussions focused on measures to make markets more accessible and attractive to a wider pool of investors, particularly those outside the traditional banking sector.
The finance minister briefed the SECP leadership on the government’s comprehensive reform agenda under the Capital Markets Development Council. He reiterated that the objective was to promote coordinated reforms across the entire financial system rather than pursuing isolated changes within individual institutions. He noted that well-functioning debt capital markets could help reduce pressure on banks, lower financing costs and provide businesses with alternative avenues to raise funds.
Emphasising the need for practical improvements, the meeting also discussed reducing costs and barriers faced by issuers and investors. Participants agreed on the importance of simplifying issuance procedures, improving the functioning of the secondary market and addressing structural issues that discourage wider participation. These steps, it was noted, would help enhance liquidity and transparency in the market.
On the occasion, SECP Chairman Dr Kabir Ahmed Sidhu outlined his key priorities for the regulator. He said digital onboarding of investors, fast-track digital account opening, risk-based know-your-customer requirements and easier market access for retail investors were among the areas requiring immediate attention. He added that these measures could significantly improve investor experience and support greater financial inclusion.
Dr Kabir Sidhu also shared his initial observations on strengthening regulatory frameworks for the non-banking sector, including small and medium enterprise financing and the insurance industry. He presented proposals aimed at encouraging innovation while ensuring adequate investor protection, noting that balanced regulation was essential for sustainable market growth.
The SECP chairman expressed his commitment to working closely with the Finance Division and market stakeholders to translate reform plans into tangible outcomes. He said collaboration between policymakers, regulators and the private sector would be critical to achieving meaningful progress.
Concluding the meeting, the federal finance minister assured the SECP leadership of the government’s full support for capital market development and regulatory reforms. He said the government remained committed to building a more inclusive, efficient and resilient financial system that could support Pakistan’s long-term economic objectives.
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