and would also handle the issue of over indebtedness among the mf borrowers. • fip is supporting pakistan microfinance network ( pmn ) to introduce the transparent pricing initiative in pakistan. this initiative will make the prices for the microfinance market available for the first time in history. the mf clients will then be in a position to compare the various products to make the appropriate choice. moreover, this initiative is expected to increase the level of competition among the mf providers and ultimately efficiency which would benefit the mf clients in the long - run, and • fip is also supporting strengthening consumer protection under the industry - led smart campaign that is seeking to improve client protection mechanism in the microfinance sector. 6. finally, in line with the evidence ( access to finance ( a2f ) survey of 2008 ) that lack of financial literacy is a major constraint in advancing financial inclusion, sbp launched the first - ever nationwide financial literacy program ( nflp ) in january 2012 to tackle this issue. the program intends to create awareness about basic financial concepts such as budgeting, savings, investments, debt management, financial products, branchless banking and rights and obligations of consumers etc. the pilot phase of the program has been concluded successfully by targeting about 50, 000 beneficiaries in various provinces, regions and districts with emphasis on low income strata and its effectiveness is currently being evaluated. following a third party independent assessment, the program will be scaled up to the national level in its next phase. let me now briefly talk about the current overall architecture of financial consumer protection which anchors on : • comprehensive legal and supervisory framework. bis central bankers ’ speeches • effective institutional arrangements. • robust dispute resolution mechanism. • impactful financial literacy and capability programs and initiatives. • culture of providing responsible finance by the financial service providers. let ’ s begin with legal framework. ideally, there should be a financial consumer protection act at the federal level, covering a range of issues, including transparency, confidentiality, data protection, account servicing, protection against unfair contracts, lending practices and availability of statements, etc. however, due to lack of such framework at the national level, sbp has been promoting financial consumer protection in the industry through regulatory initiatives on the basis of its powers under the bco, 1962. these include : 1. issuance of prudential regulations for consumer financing, which addresses a number of important issues pertaining to market conduct and consumer protection. 2. issuance of

in a sustainable manner. state bank of pakistan is pursuing a multi - pronged financial inclusion strategy through the following : 1. sbp introduced basic banking account ( bba ), requiring commercial banks operating in pakistan to offer bba to facilitate and provide basic banking facilities to the low income people in pakistan. a typical bba can be opened with a minimum deposit of rs1, 000 carrying no fee, no limit of minimum balance and offering full atm facility. 2. sbp has introduced the annual branch licensing policy which requires commercial banks with 100 branches or more to open at least 20 % of their branches outside big cities and set up branches in tehsil headquarters where no branch of any bank exists. bis central bankers ’ speeches 3. sbp has developed a world class regulatory framework to enable commercial microfinance and branchless banking in pakistan. these regulations enable alternative approaches and models for delivery of pro - poor and low - income financial services and products while ensuring institutional viability, broadening access, financial integrity, and pro - consumer practices. 4. pakistan is amongst the few countries that have a national microfinance strategy which not only identifies drivers and bottlenecks to growth but also provides an implementation plan drawn alongside with industry stakeholders to monitor progress against the identified targets. 5. sbp has partnered with the uk department for international development ( dfid ) and other donors to launch programs to increase access to finance in the country. the dfid - funded financial inclusion program ( fip ) aims to address financial exclusion through a variety of interventions. fip focuses on market - based, sustainable financial services for low income people and small enterprises. in addition, fip aims to enhance delivery of financial services through technology based branchless banking solutions, financial innovation, and remittances. fip has provided support to a number of initiatives to enhance supply of and access to finance for smes, agriculture, and microfinance sectors. fip interventions largely focus on addressing market failures and industry bottlenecks, while addressing issues of fair treatment of clients and consumer protection. here, i would like to make specific mention of some of the breakthrough fip initiatives on promoting responsible finance in the microfinance sector : • fip is supporting the establishment of a separate national level credit information bureau for microfinance clients. once the mf - cib is fully functional, it would hold the credit histories of mf borrowers addressing the fundamental issues of asymmetric information on mf clients