from any place in the country thus increasing the efficiency and providing convenience to the customers. the cost of transactions will be reduced significantly once the atm network and on - line banking become firmly entrenched. it is estimated that the average cost of processing a cheque is around rs. 50 while that of atm withdrawal is rs. 15. thus, the cost savings will result in further efficiency of the banking system and increased volume of business. conclusion the above analysis shows that the fundamental reforms carried out in the financial sector have brought about significant changes in the structure, processes, regulation, technology and human resource base of pakistan ’ s banking sector. the reforms have initiated a virtuous cycle of economic growth which is pro - poor. these changes and their future continuation provide the foundation for sustainable growth in the financial sector and the virtuous cycle in economy.

of capital and would hit especially hard bankdependent firms and consumers while other borrowers would turn to other sources of financing. furthermore, the relatively high - frequency changes that managing macro bis central bankers ’ speeches conditions may require may create unnecessary policy - driven volatility in financial markets. all this indicates that it is more appropriate to tackle each goal with its own type of tool. the separation of the instruments does not necessarily mean that the achievement of the goals can be separated operationally. because of the dual causality of price and financial stability, monetary and financial policies should be explicitly coordinated. how this coordination is achieved varies across countries. at the very least, instances to monitor global risks to financial stability should exist. central banks should be involved in these monitoring instances ( or should centralize the monitoring and supervision functions ) because of their relative advantages in providing a macro view of the economy and their market contacts, due to the implementation of monetary operations. in addition regulation that could have systemic implications should be discussed in these instances. in the case of chile, the supervisory landmark is made up of three superintendencies ( including banks ). in this setting, coordination for systemic stability is achieved at two levels. one the one hand, the central bank is involved in several aspects of financial regulation directly by dictating regulation, or by participating in consultations with other agencies. on the other hand, the central bank participates in two coordination instances with the superintendents and finance ministry. the experience during the last years has shown that during periods of financial turmoil, mainly as result of external shocks, the central bank, the finance ministry, and the financial regulation agencies have indeed worked in close coordination, and, as the global financial crisis testifies, results have been positive. moreover, in chile, as banking supervision takes place outside the central bank it is key that it is not out of touch with the broader macro environment, so that financial system stance visa - vis the risks perceived in the macro - outlook is the natural first step in the supervisory process. recently, these instances have been formalized with the creation of a financial stability council, headed by the finance minister. this council will, amongst other things, identify systemic risks and mitigation policies, and discuss the systemic impact of regulation. summing up, monetary and prudential policies are closely connected, first because macroeconomic and financial stability are closely interlinked, and second because instruments designed to achieve stability in each front have cross effects. this