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Allied Bank Of Pakistan (Ltd)
Chapter. 01BANKS AND SCOPE OF BANKING
WHAT IS BANK?
BANKING IN DEVELOPING SOCIETIES
NEW CHALLENGES OF CONTEMPORARY AGE
HISTORY OF ALLIED BANK LIMITED
DENATIONALIZATION OF ALLIED BANK LIMITED
ALLIED BANK LIMITED TODAY
PRIVATIZATION OF THE BANK 
BRANCH NETWORK & ASSOCIATED BUSINESSES
INTERNATIONAL OPERATIONS
ASSOCIATED BUSINESSES
Department of CommerceFaculty of Administrative Sciences Rawalakot (A.K)
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Allied Bank Of Pakistan (Ltd)
BANKS AND SCOPE OF BANKING1.1: WHAT IS BANK?
A bank is an institution for the custody, loan or exchange of money for sanctioningcredit, for transferring funds by domestic and foreign bills of exchange. It is a pipelinethrough which currency moves in to and out of circulation.As it is clear from the definition of banking, the main activity or function of banking is borrowing and lending of money with a margin of gain. However, as far as the presentday banking is concerned, there are a number of different banks, set up under specificdifferent objectives, performing various functions.
1.2:BANKING IN DEVELOPING SOCIETIES
In the developed societies, the banks do not have to make many efforts in mobilizingsavings, as it has become a second habit with the people. The commercial banks arefinancing the short and long-term capital needs of the business. The loans and discountsof commercial banks include real state mortgages and long term loans, which extend to aslong a period as ten years. These banks also administer estates, acts as insurance agentsand underwriters, provide brokerage services and implement domestic as well as foreigneconomic policies of the government.Commercial banks in developing countries have to make vigorous efforts of resourcemobilization at all levels. However, with the passage of time the commercial bankingoperations are under going remarkable qualitative change. In Pakistan for instance, banking facilities are being extended to the un-banked places. Planned efforts are beingmade to enhance the supply of bank advances to the new priority sectors in consonancewith the present day socio-economic needs.A special scheme to induct commercial banks in the field of agricultural credit wasintroduced in December 1972. The scheme provides for short and medium term loans tofarmers under a much-simplified procedure. State Bank's measures aimed at increasingthe flow of credit to the small man in business and industry as well as to housing and
Department of CommerceFaculty of Administrative Sciences Rawalakot (A.K)
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Allied Bank Of Pakistan (Ltd)
non-traditional exports have also yielded positive results. The large risk to thecommercial banks in the sphere of agricultural finance and small loans are being coveredto a reasonable extent by the "Credit Guarantee Scheme". Mandatory targets for smallloan credit to the agriculture sector and for housing have been prescribed and are beingenforced. Corporate banking is also being reorganized and reactivated on lines that aremore viable.
1.3:NEW CHALLENGES OF CONTEMPORARY AGE
 
Banks play a vital role in the economic development of a country. They accumulate theidle savings of the people and make them available for investment. They also create newdemand deposits in the process of granting loans and purchasing investment securities.They facilitate trade both inside and outside the country by accepting and discounting of  bills of exchange. Banks also increase the mobility of capital. They provide a variety of facilities for remitting a large amount of money from one place to another by the transfer of a small slip of a paper.In a country like Pakistan, which is still in the initial stages of economic development, awell-organized banking system is the need of the day. There is acute shortage of capitalin Pakistan. The banks have to play an important role in promoting capital formation, incontrolling speculation in maintaining a balance between requirements and availabilityand in directing physical resources in to desired channels. In advanced countries of theworld like America, Japan, Germany, the rate of capital formation ranges from 12% to25% of their Gross National product. Where as in Pakistan the rate of saving has variedfrom 5% to 8% only. In order to accelerate the rate of economic development theGovernment has been acquiring foreign capital. The banks by launching a vigorouscampaign in both the villages and cities can mobilize the idle savings and can increasethe rate of investment. The country thus becomes independent of foreign capital, which infact has let us down on almost all the crucial happenings in the country.This deficiency of capital accumulation is due to so many reasons like, lower per capitaincome, disparity of wealth, un-organized banking system, ineffective fiscal measuresetc. One reason of this capital deficiency is the non-adoption of modern marketing tools,such as market research, sales organization, sales training, sales management, advertising
Department of CommerceFaculty of Administrative Sciences Rawalakot (A.K)
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