Due to overlapping regulatory jurisdictions, banks are floating modarabas through separate subsidiaries, 5 resulting in higher administrative, set up and regulatory costs. For sometime (from 1991-1997), these Modarabas were under the regulatory control of SBP, but the powers relating to licensing, winding up, etc. were retained by SECP; consequently the regulatory authority has been reverted to SECP.
Again, this highlights the need for cross sector regulation of IFIs. Eventually there is a need to develop mechanisms for oversight of financial sector in an integrated manner.