PAKISTAN: Government plans financial sector reform

22 November 1996

The caretaker government installed by President Farooq Leghari has announced plans to reform the country's state-run banks and financial institutions. Plans to reform the Industrial Development Bank of Pakistan, Pakistan Industrial Credit & Investment Corporation, Regional Development Finance Corporation and others were announced by Shahid Javed Burki, who has taken temporary leave of his position as vice-president at the World Bank, to act as adviser to the Finance Ministry.

Burki has said that the government will restructure or merge the institutions. Local analysts have welcomed the move, saying it will improve the health of the state-run financial bodies. Such bodies held bad debts worth about Rs 113,200 million

($2,824 million) at the end of fiscal year 1995/96.

Sacked prime minister Benazir Bhutto is to challenge the legitimacy of the caretaker government and filed a petition disputing her dismissal at the Supreme Court on 13 November. The petition argues that the sacking was illegal and unconstitutional. Bhutto has denied the charges which Leghari cited as grounds for her sacking.

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