KARACHI: Finance Minister Muhammad Aurangzeb on Friday ordered a fresh push to develop Pakistan’s corporate debt market, saying the country needed to deepen long-term financing options for businesses and reduce the private sector’s reliance on bank borrowing to support economic growth.
The remarks came during a meeting of the Capital Market Development Council (CMDC), where officials reviewed progress on reforms aimed at broadening financing options for businesses and strengthening Pakistan’s capital markets, according to a statement issued by the Finance Division.
Pakistan’s financial system remains heavily dependent on commercial banks for corporate lending, while the corporate debt market remains relatively underdeveloped.
“The equity market has demonstrated encouraging progress, but the corporate debt market continues to remain underdeveloped relative to the financing needs of the economy,” Aurangzeb said, according to the statement.
The meeting reviewed an ongoing external study on developing Pakistan’s local currency-linked bond market, which is expected to recommend reforms covering sovereign financing, non-bank financial institutions, primary dealer arrangements, secondary market development, market infrastructure and hedging instruments.
Aurangzeb also directed the Securities and Exchange Commission of Pakistan (SECP) and the Pakistan Stock Exchange (PSX) to establish dedicated senior-level “Debt Desks” with clearly defined mandates and measurable performance targets to oversee implementation of debt market reforms and regularly report on progress.
The finance minister called for a simplified one-window framework for corporate debt issuance through closer coordination between the SECP, PSX and the Central Depository Company (CDC), supported by standardized procedures and greater digital integration to make it easier for companies to raise capital.
The meeting also reviewed proposals to expand Pakistan’s Islamic capital market, including measures to deepen the domestic sukuk market, strengthen secondary market liquidity and encourage the issuance of green and sustainable financial instruments.
