be given priority in allocation of expenditures. poor access to water supply and sanitation are often associated with poor health outcomes. at present only 63 percent of the country ’ s population has access to safe drinking water, whereas proper sanitation facilities are available to only 39 percent of the total population. the government is planning to increase water supply facilities and sanitation facilities to reach 100 percent of population as part of millennium development goal. construction of drinking water supply and sanitation facilities is already receiving prime importance under the khushal pakistan program. social safety nets as part of social safety net programme, the government has launched direct cash - transfer programmes for poor families through medical assistance, and educational stipends from the bait - ul - maal ( a public welfare programme ). the food support programme covers 1. 2 million of the poorest households with monthly incomes of up to rs. 2, 000 per family ( us $ 35 ). a system of needstesting has been adopted for the identification of beneficiaries by linking the programme with the zakat system. the zakat programme that targets widows, orphans and the disabled has been strengthened. about two million beneficiaries received assistance from the zakat fund, of which 0. 5 million receive assistance on a regular basis. it is envisaged that an additional 1. 5 million will be added to the list of zakat recipients through rehabilitation schemes, which will provide micro loans of rs. 10, 000 ( us $ 160 ) to rs. 50, 000 ( us $ 800 ) each for starting up small businesses. an allocation of rs. 5 billion ( us $ 80 million ) has been made for these schemes in addition to the normal stipends to mustahqeen ( the needy ) out of the zakat fund. it is estimated that zakat contributes 10 - 15 percent to the government ’ s poverty reduction programme. the school feeding programme for female students ( tawana pakistan programme ), which was successfully piloted in a few districts will be replicated throughout the country. this programme will help address malnutrition in female students as this has resulted in low enrolment, high absenteeism / dropout rate and low cognitive achievement. it is estimated that community mobilization will strengthen ownership of this programme and lead to a 30 percent decrease in the dropout rate. the employees old - age benefits institutions ( eobi ) and provincial social security institutions provide pension and medical care benefits to private sector employees. sindh and punjab provide medical care

in awareness building through conferences and regular interaction with the banking professionals, including partnership with the pakistan institute of corporate governance, which was established with sbp as a founding member. the efforts of sbp and banking industry have yielded results in bringing about a positive change in the corporate governance practices of banks. banks are now managed and run by better cadre of professionals and stakeholders now play an active role and take a keen interest in the affairs of banks. the boards meet regularly and participate in both setting strategic direction for their institutions and providing desired oversight. managements at majority of banks are equipped with professional competence and high degree of integrity. the increasingly intense competition among banks has resulted in improved and swift decision - making processes. the outside pressures have been marginalized. financial reporting standards mirror international best practices, resulting in enhanced disclosure and transparency. in compliance with the elaborate corporate governance framework of the regulators, banks have displayed high level of eagerness to up - grade their systems. a quick glance at the corporate governance practices adopted by banks brings to fore the following major areas where banks have shown increased, albeit slow, compliance with the existing codes and standards : • • • • • • • • • • • • banks seek prior clearance from sbp for the appointment of directors and ceos ; banks follow the fit & proper test criteria for the appointment of key executives who should not be holding an office in another financial institution ; the scope of the board ’ s policies has been enhanced to cover a broad range of areas such as internal audit and control, risk management, human resources, credit, investments, etc. ; boards now include experienced non - executive directors ; boards meet more frequently ; banks record detailed minutes of the board meetings ; boards constitute specialized committees with well - defined objectives, authorities and tenure, comprising of non - executive directors to review different critical functions ; banks ensure that executive directors are not more than 25 % of the total directors on the board ; banks ensure that their cross shareholding in other financial institutions does not exceed more than 5 % ; directors of the same family do not get representation of more than 25 % of the total directors on the board ; auditors are appointed from the sbp ’ s approved panel and they are rotated at an appropriate interval ; and banks publish and circulate on quarterly basis unaudited financial statements of the banks along with the directors ’ review. improvement in corporate governance has helped impart a high degree of financial stability. the balance sheet of the banking system has expanded at a