##ance by regulators. ” the rosc - cg assessment further notes that “ the sbp has also been instrumental in improving corporate governance in the banking system, by requiring banks and dfis to adopt the code, and by assessing compliance with other relevant aspects of prudential regulation specifically applicable to banks / dfis. ” similarly the world bank ’ s 2007 report on doing business in south asia recognizes that “ pakistan provides relatively strong protections for minority shareholders against the misuse of corporate assets ”. it ranks 19th worldwide on protecting investors. outstanding corporate governance reform agenda while considerable progress has been achieved in enhancing corporate governance practices of banks, sbp is geared towards filling in the remaining gaps. in this regard, foremost is the need to develop a suitable cadre of professional directors who are knowledgeable of banks ’ affairs as well as independent of their management and majority shareholders. allied to this is the need to clarify and strengthen directors ’ fiduciary duties to act in the interests of the bank and all of its stakeholders. it is also essential for banks to provide sufficient time and information to directors to prepare for board meetings, structure board meetings so as to allow ample time for discussion and establish appropriate criteria for assessing and improving performance of directors, including independent directors. to raise awareness on these and related aspects, sbp is working towards issuing comprehensive corporate governance guidelines for banks. as earlier discussed, pakistan ’ s corporate and financial sectors present corporate governance issues peculiar to complex ownership and group structures. by conducting operations through a complex network of subsidiaries, controlling shareholders often acquire control of operations and / or cash flows disproportionate to their equity stake in individual companies. the key issues that arise as a result include : ( i ) inequitable treatment of stakeholders ; ( ii ) dominance of controlling shareholder - directors over board proceedings ; ( iii ) lack of independence of the board from the management ; and ( iv ) channeling of bank resources to the benefit of group concerns. in order to address such corporate governance issues, there is a need for group supervision by the regulators. as regard the banking supervision, sbp is working towards introduction of consolidated supervision whereby it will not be monitoring banks as a stand - alone entity but rather as part of the entire banking group. this will help to evaluate the strength of the entire group and to mitigate risks arising from group companies. a significant component of consolidated supervision will be review of group structures and detailed examination of related party transactions. i would also like to

not fully understand the nature of the agreements they signed. clearly, they simply wanted the money and paid no attention to the rate of interest or other terms of the loan, until they found out that they couldn ’ t repay. of course, on many occasions, the officials of the bank or insurance company may not have had the required knowledge or may have forgotten to clearly explain all the associated costs and attendant risks. we still have people who respond innocently to advertisements for schemes that promise to pay interest rates of 25 and 36 per cent per month. not long ago one of these schemes was able to attract close to $ 50 million in a period of less than a year. not unexpectedly, many people lost their life savings. currently, in trinidad and tobago, financial education is sporadically provided by private financial institutions marketing products and services to consumers. this happens in some work environments, and by a few counseling and repair organizations helping people to sort out their personal debt situations. but this clearly is insufficient. against this background, as announced in this year ’ s budget, the central bank is about to launch a comprehensive national financial literacy programme to provide unbiased and relevant financial education to the broad population. why the central bank? we think that the central bank is in an ideal position to spearhead this initiative because the confusion between information and advertising does not arise ; because we have the credibility to provide unbiased and impartial information ; and because, with our overview of the monetary system, we are in the best position to see the gaps and problems in the market. in addition, our interest derives from the fact that financial literacy can also facilitate the efficient operation of the market economy, in general, and of monetary policy, in particular. for example, knowledgeable consumers promote competition among financial and non - financial firms which benefits the economy as a whole. experience also shows that astute consumers are less vulnerable to fraud and abuse than the financially uneducated. financial literacy can also help the citizenry to get a better appreciation of interest rate and other market signals which can contribute to increasing the efficiency of monetary policy. the programme ’ s starting point is that financial education is not only for investors but for everyone. early financial education could begin to teach children the value of money and an appreciation for managing money. financial education is also for the average family trying to balance its budget, to save for the children ’ s education and for the parents ’ retirement. it is particularly critical for young people who need to