BANKING SYSTEM IN PAKISTAN

THE FINANCIAL SECTOR OF PAKISTAN ECONOMY CONTAINS A LARGE VARIETY OF FINANCIAL

INSTITUTIONS, BANKING AND NON- BANKIING

BANKS
 CENTRAL BANK
 COMERCIAL BANKS
 MICRO FIINANCE INSTITUTIONS
 INVESTMENT BANKS
 ISLAMIC BANKS

NON-BANK FINANCIAL INSTITUTIONS

 DEVELOPMENT FINANCE INSTITUTIONS

 LEASING COMPANIES
 MODARBAS
 MUTUAL FUNDS
 VENTURE CAPITAL COMPANIES
 STOCK EXCHANGE

BANKING STRUCTURE
1 .THE STATE BANK OF PAKISTAN

2. COMERCIAL Banks

3. Investments banks

4. Development finance institutions

5. Specialized banks

6. Co-operative banks

7. Micro finance institutions

8. Islamic banks

9. Foreign banks
 1. STATE BANK OF PAKISTAN
state bank of Pakistan is the central bank of Pakistan. it was established in 1948, just a few
months after the independence of the country . it is the most importance financial institution of
Pakistan and is the leader in the field of money, banking and finance . it acts only in the interest
of the country

initially, 51% of the shares were held by the govt while the remaining were held by the private
sector .

in 1947 ,the bank was nationalized.in 1956 and 1997 the powers and autonomy of the bank to
regulate money supply and control financial sector were increased . paid up capital of the bank
100 million rupees

2. COMMERCIAL BANK OF PAKISTAN

EARLY BANKS
AT THE TIME OF INDEPENDENCE ,PAKISTAN INHERITED ONLY TWO COMMERCIAL BANKS
AND EVEN THOSE HAD LIMITED BUSINESS.ALL MAJOR BANKS WERE HINDU-DOMINATED AND
SO THEY HAD STOPPED THEIR BUSINESS IN PAKISTAN .THEN THE GOVT ESTABLISHED THE STATE
BANK AND NATIONAL BANK . BY 1960S, A REASONABLE STRUCTURE OF BANKING HAD SPRUNG
UP IN PAKISTAN .

NATIONALISATION AND PRIVATISATION

IN 1947, THE PAKISTANI COMMERCIAL BANKS WERE NATIONALISED .THE WHOLE

BANKING SYSTEM WAS REORGANISED . SMALLER BANKS WERE MERGED WITH OTHERS .LATER
IN 1990S THE GOVT ADOPTED THE POLICY OF PRIVATISATION.NATIONALISATION EXPERIMENT
FAILED AND FINANCIAL POSITION OF MANY BANKS BECAME WEAK. THE MOST IMPORTANT
CAUSE OF POOR PERFORMANCE OF BANKS WAS POLITICAL INTERFARANCE .

IN MARCH 2009 ,THE BANKING POSITION WAS AS FALLOWS;

 *PUBLIC SECTOR BANK
 NATIONAL BANK OF PAKISTAN
 THE BANK OF PUNJAB
 THE BANK OF KHYBER
 FIRST WOMEN BANK

*SPECIALIZED BANKS
 ZARAI TRAQYATI BANK LIMITED
 INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN
 PUNJAB PROVINCIAL COOPERATIVE BANK LIMITED
 SOME BANK

*PRIVATE LOCAL BANKS

 HABIB BANK LIMITED
 MUSLIM COMMERCIAL BANK LIMTED
 ALLIED BANK LIMITED
 UNITED BANK LIMITED

*OTHERS BANKS
 FOREIGN BANKS
 MICRO FINANCE BANK
 ISLAMIC BANK

3. MICRO FINANCE INSTITUTIONS

AROUND THE GLOBE MICROFINANCE INSTITUTIONS ARE REVOLUTIONIZING ACCESS TO
FINANCIAL SERVICES TO THE POOR SEGMENT OF THE SOCIETY. POLICY MAKERS ARE
INCREASINGLY USING MICROFINANCE AS A TOOL TO ERADICATE POVERTY.PAKISTAN HAS A
LARGE NUMBER OF POOR PEOPLE WHO HAVE NO ACCESS TO FINANCE . MF CAN SOLVE THIS
PROBLEM.
 4. ISLAMIC BANKS
ISLAMIC BANKS ARE THOSE BANK WHICH DOING THERE FUNCTIONS UNDERS THE RULE OF ISLAM.

FOLLOWING ARE THE MAIN MODES OF ISLAMIC BANKING AND FINANCE

 PLS DEPOSIT
 MURABAHA
 IJARAH
 BAI MUJJAL
 MUDARABAH
 MUSHARAKAH