which, among others, defines the role and responsibilities of bods ; the fit and proper test criteria prescribed for chief executive officers, board members and key executives ; restriction on shareholdings by the director ; dealings of the banks with directors ; and requirement of credit rating. furthermore sbp, in collaboration with the icap ( the premier accounting body of the country ) and the commercial banks, has facilitated adoption of international accounting standards ( ias ) by the banks. in 2006 ( feb ) the reporting formats were revised to incorporate the significant regulatory developments and the modifications in the international financial reporting standards ( ifrs ). with these changes, the quality of disclosure by banks in their annual accounts is at par with international best practices. to ensure the quality of external auditors for banks sbp requires an audit firm to be approved from sbp panel of auditors. the firm is classified in categories a, b, and c depending on a criterion developed internally and the criteria takes into account the number of qualified accountants, international affiliation, quality review by icap, and past experience. the classification also prescribe the size of the bank a firm can audit, e. g. large banks can only be audited by firms in category a. industry - specific prs. replacing all prescribed sector ceilings or subsidized lending, sbp encourages competition amongst banks to meet the diverse set of development requirements. given the gap in supply and demand for credit delivery, sbp has formed consultative groups to identify issues impeding the outreach of financial services for agriculture and rural sector, sme and microfinance sectors. agriculture sector financing has more than doubled over the last few years, but remains below the overall credit requirements of the sector. commercialization of agriculture financing, crop loan insurance program and improvements in land registration and passbook system in rural areas have been found to be more effective mechanisms to retail agriculture credit, though flow of non - farm credit has remained low. recognizing commercialization of microfinance businesses is key to its financial and social sector sustainability ; sbp has set up a regulatory regime for microfinance banks ( mfbs ). currently about 6 mfbs are governed and regulated by the mfis ordinance, 2001 that encourages a paradigm shift in microfinance industry, while laying foundation for systematic growth of the sector. mfbs capital requirements are set lower than commercial banks ( rs250 million ) and they are required to maintain equity equivalent to at least 15 % of its risk

referred to kcdr cannot be explained ; prima facie it could be partially due to the following factors. first as i mentioned earlier is the lack of awareness about the available mechanism or institutions like kcdr for alternate dispute resolution. this can be taken care of with some workshops and seminars or conferences on adr. second, high profile cases involving big amounts are directly filed in courts to secure banks ’ interest in a more formalized way especially to avoid charges of negligence or collusion. thirdly, the failure of mediation results again in continuation of legal proceedings. since there has been a tendency in defaulters to stretch legal proceedings as much as they can, the banks may have an apprehension that adr would also be used by such unscrupulous elements to further delay the course of justice. where amounts are small, parties prefer to send a single page application to sbp without incurring any cost. sbp enjoys high degree of public trust and complainant believes that sbp takes action on merit. the customers of banks not only get final decision of the case but interim interaction is also maintained for further information or sometimes meeting in sbp. in this way, customers get relief without incurring any cost or going through any hassle. sbp has presence all over pakistan. although complaints are handled in karachi, the field offices of sbp properly guide general public to process their applications. neither banking mohtasib nor sbp charge anything for complaint redressals. the fee charged by kcdr may in some cases be the reason especially in small disputes. going forward, there are certain expectations from sbp to promote adr. setting up an independent mediation centre : sbp feels that currently institution of banking mohtasib and consumer protection department are functioning satisfactorily. further, sbp considers kcdr as a reliable center. the parallel system of mediation would not be appropriate due to defined role and responsibilities of sbp under the banking legislation. however, sbp would welcome cases referred by courts or any other quarter involving banking disputes. awareness events from sbp platform : sbp supports this and intends to hold meeting of senior executives of banks in sbp. kcdr would be invited to explain in detail the facilities and benefits of mediation. besides, it would be clarified to banks that sbp not only has any reservations over utilization of mediation but supports it due to its advantages over litigation. inclusion of mediation in curriculum of banking courses / training programs : this is also agree