by people from all walks of life to achieve inclusivity. with the framework ’ s promising benefits, we must also be cognizant of its attendant challenges and risks. data privacy concerns, money laundering, and electronic frauds are among the issues that can undermine the confidence in this policy initiative. we therefore expect that the key stakeholders particularly the financial institutions, to adopt adequate measures and controls to manage such risks. foremost of which is the conduct of an effective information campaign to ensure that consumers are aware of the risks and how they can perform their transactions securely. consumers must also be aware of the available mechanisms that can promote consumer protection. on the other end of spectrum, other government agencies are also expected to collaborate and address the digital divide. it entails ensuring access to it infrastructure by people from all walks of life to achieve 3 / 4 bis central bankers'speeches inclusivity. we are living in exciting times and we each have a role to play. let this initiative be just one of many more opportunities for us to work together to truly provide better ways of serving our constituents whenever they require and wherever they are. be at the comforts of their homes, in the office, in digital devices, or who knows tomorrow even from outer space! thank you and a pleasant day to all of you. 4 / 4 bis central bankers'speeches

licenses. for this purpose, the owners are required to provide equity capital of some considerable magnitude, cross ownerships are discouraged and character stipulations for bank ownership are laid down. ( b ) aligning the incentives of bank owners with those of depositors by making sure that the bank owners stand to make substantial losses in the event of insolvency. capital adequacy requirements and loan loss provisions fulfill this role. ( c ) preventing excessive risk taking more generally. this means limiting bank holdings of excessively risky assets, preventing lending to related parties, requiring diversification and making sure that banks have appropriate credit appraisal, evaluation and monitoring procedures in place. components of regulatory regime what are the various components of the regulatory regime which can help achieve these regulatory objectives and what is the state bank doing in respect to each of these components. there are at least seven core components which form the basis of the regulatory regime in pakistan. first, prudential regulations have been established by the sbp, disseminated widely and act as the ground rules and guidelines for the financial industry. mostly these regulations pertain to capital adequacy, quality of assets, classification and provisioning of loan losses, liquidity requirements, risk concentration and management etc. basel i capital ratios are enforced strictly and action taken against those falling short. although the stock of non - performing loans is being tackled through a variety of measures the flow of loans does not suffer from this problem. since 1997, only 5 percent of loans disbursed have become non - performing indicating an overall improvement in the quality of banking assets in pakistan. second, once the regulations have been put in place the sbp monitors and supervises the banks. this is done through an integrated approach of on - site inspection, off - site surveillance and market information. supervision techniques have been aligned with the best practices of other central banks in the world and the camels rating system is used to assess the health of the banks. a banking desk responsible for monitoring a few banks continuously reviews the available data and flags early warning in cases where prompt corrective actions are required. the enforcement unit then moves in and gets the remedial action implemented. third, the incentive structures faced by regulatory agencies, consumers and banks have to be aligned to the maximum extent feasible. mark - to - market valuation of assets, forced sale value of collaterals, greater and regular disclosure of financial information, mandatory credit ratings of the banks are some of the tools