Process of consolidation has been catalyzed by 30 odd mergers and acquisition (both domestic and foreign-led), moratorium on licensing of conventional banks and rise in minimum capital requirements for banks and DFIs. To streamline capital with risks, banks have initiated implementation of the standardized approach, as prescribed under Basel II regulations.
Over the period, this is expected to augment the economies of scale and improve efficiency as competition and innovation grows. 16. Enhanced push from SBP for delivery of development finance will help diversify the credit portfolio and will alter risk profile as there is relatively low correlation of the inherent risk factors among different sectors. 17.