A comparative analysis of regulatory framework of non-banking financial companies in Pakistan and India.

Abstract

The growth of a nation's economy is significantly influenced by its financial sector. While the banks dominate Pakistan's financial sector, there is less focus on the area that non-banking finance sector and businesses hold. India's financial sector is a combination of the banking and non-banking sectors. Businesses that deal in loans and advances, in addition to the acquisition of shares, stocks, bonds, debentures, and other marketable securities issued by national and local bodies, continue to be largely disregarded, and the regulatory framework of Pakistan still has considerable gaps in it. Asset management companies, investment and securities advisors, insurance companies, investment banks, securities brokerage firms, venture capitalists, currency exchanges, some micro loan organizations, and even pawn shops are examples of non-banking financial institutions. Even though many of the services that these organizations offer aren't strictly appropriate for the banks, they nonetheless compete with the banks in some way, making them the underdogs of the banking lobby-dominated financial services sector. The Securities and Exchange Commission of Pakistan (SECP).has the challenging task of overseeing the Pakistan's corporate sector and transforming it into a modern and effective capital market. There are still some noticeable gaps in the country's regulatory architecture when compared to India, particularly when it comes to enforcement measures, even though the supervisory body has specified a sizable number of laws and guidelines that administer the sector.