the market place. we have not adopted a myopic approach by preventing them from leaving the sbp as this will be highly counter - productive ; on the other hand, we are enlarging the capacity of our pipeline by increasing the number of recruits and training and developing the staff inhouse and outside. we are keen to maintain the quality of intake as once the quality is compromised then the model which i am proposing will become dysfunctional. the structural reforms in the banking industry have brought about some unintended consequences that are creating serious pressures on the future growth of the industry. from a situation where the movement in and out of the banks was almost non - existent and life - time secure tenure was assured for all the insiders, the industry is going through a major upheaval in achieving stable and cost effective work force. during my recent farewell visits to more than 30 banks in the country, the common theme was the complaints about the widespread poaching of staff among the banks, the unwarranted escalation in compensation packages to attract and retain the staff and the consequent instability in the work force. in a way it is extremely satisfying to witness that the banking industry is going through the early pangs of professionalization where the market is able to discern and reward people on the basis of their output and performance and hunt for the talent. another positive aspect is that this process gives signals to the rest of the employees and potential entrants that they should also acquire and master the skills that are in short supply if they have to advance their careers or earn more money. overtime, the expansion in the supply brings back the equilibrium in the market and normalizes compensation packages. but in the transition period the pains are felt by everyone. in this transition phase, this instability gives rise to dangerous trends of out pricing of banking products with adverse impact on the consumers, the widening gaps between the marginal and average salary scales in the industry and thus the consequences for motivation of the majority staff and the perpetual struggle by the senior management to manage the scarcity and mobility of human resources. what can be done to smoothen this transition and enhance the requisite supply of skills? let me first say that there is no short cut and it will take time, efforts, coordination among various players and agencies and continuous monitoring and follow - up. the business model for the skill formation, upgradation and maintenance process is presented graphically below. there are three distinct stages of this process with spheres

branchless banking and payment system operators and service providers. right now, we are in the final stage of issuing regulations for e - money institutions. sbp is cognizant of the fact that fintechs may find certain regulations as inhibiting for their offering so we are in the process of establishing a regulatory sandbox to identify such issues and find ways of supporting and facilitating innovative ideas. ladies and gentlemen! 13. i am confident that the challenges that i have mentioned earlier will provide great opportunity and space to banks like telenor and companies like ant financials, who have great experience of transforming payments and banking landscape in china thus promoting digitization and financial inclusion. i am hopeful that based on its experience, ant financial will provide out of the box solutions for challenges being faced by the industry and consumers in pakistan. especially i expect that ant financials will bring innovative ideas to pakistan especially to assist sbp in areas like financial inclusion, digitization of payments, e - commerce, sme finance, increasing access points, partnerships with non - bank fintechs and using innovative technologies further to bring efficiency in banking and payments. 14. for my colleagues from banking industry in pakistan, i would like to say that we have to adapt to the changing realities of times. we shall take the challenge and use the opportunities provided by technology to deliver the best of best to our citizens. i expect that the financial sector will take advantage of page 9 of 10 current favorable market environment by investing in innovative technologies and product offerings to expand services and broaden access to financial services in the country. 15. i would once again like to congratulate telenor microfinance bank and ant financial for launching this initiative to facilitate cross border remittances. i am confident that ant financials will play its role in the economic development of pakistan and would further strengthen sino pak ties in the fields of banking, finance and payments. i shall ensure that state bank of pakistan would continue to extend possible support to facilitate them. thank you for your attention! pakistan zindabad. * * * * * page 10 of 10