A NOTE ON DEVELOPMENT OF FINANCIAL INSTITUTIONS IN PAKISTAN: A FRAMEWORK FOR REFORM AND RESTRUCTURING

Abstract

The privatization programme has been on the agenda of many successive governments since 1985. The market based reform agenda was not just limited to privatizing state owned enterprises, it also envisaged liberalization and deregulation of the economy and opening it up to competitive forces. This ambitious reform agenda has had limited success. In the early 1990s the financial sector showed the most potential as a result of the liberalization programme with the government lifting many obstacles such as foreign exchange restrictions, free flow of funds, privatizing a few financial institutions and upgrading skills in the sector. It is in this context that the Development Financial Institutions (DFIs) and their problems were brought to the forefront of the government’s agenda.