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Banking in indo-Pak subcontinent.

In subcontinent banking system invent through informal banking practices. In which people
knows about the loans and usury. In those days people deposited their money with a person
who belong to a good family of good conduct and follow with rules.
The hundi system invent firstly in subcontinent. In many of the transforming funds of
their customers from one place to another place was held through hundi system. Then also
loans system invents in which people give their immovable properties and get loan in the
basis of their properties and securities. Much of the interest earn through farmers against the
mortgage of the standing crops.
Banking during Muslim rule in India
Basically India has much of the area cover by agriculture sector. So in which giving the
interest free loans and grants in cash on one hand and allowing paying land revenue. Many
loans give to the farmers in the production of crops. During Industrial development in sub
continent many small factories working in this region. And the permission of king state loans
given to the factories for increase the production. For this action much of the export of India
spread to foreign countries like china, East Indies and other pacific islands. In the 12 th century
some bankers as MULTANI and SHROFFS who were acting as the agent of government to
collect the revenue. On this time Muhammed Tughlag introduced the token currency, metal
currency and note currency. And on the regime of Akber central banking system also
introduce in India.
Emergence of public banks in India
When the English traders came in India. They introduced their own agency houses like
Alexander and Co and Fergusson and Co. Both these firms combined banking with other
businesses. First public bank in India start with the amount of 50 lacks in 1809. And this bank
allows charging max 12% interest per annum to their customers.
Joint stock bank
When the small banks failed in India British introduced the joint stock bank in 1860.
The 1 joint stock bank Punjab national bank was registered in 1895.

Exchange bank
These banks help in the foreign trade to the British. For this reason they introduced these
types of bank much of the foreign exchange currency and trade of India were easy through
exchange banks.

Imperial bank of in India

This bank made through Central bank of India, Limited Bank of Baroda limited, and the
People bank of India made the Imperial bank of India in 1921. This bank has not given the
power to issue notes. But allowed to hold Govt. balances and manage the Public debts offices
till 1935.
Reserve bank of India
Reserve bank of India made the expansion of trade, commerce and industry in india. The
role of reserve bank in India was to make the suggestion and plans for the proper functioning
of banking. One major role is also that all the responsibilities of central bank handled by th e
reserve bank of India.
Post- world war Indian banking
After the Second World War spread the branches of many small banks in the sub
continent. The banking system spread all over the country. Bank increased from 51 in 1939 to
93 in 1946 and the number of branches including Head offices rose from 1328 to 3106. This
is the great revolution of banking system in India.
Banking in Pakistan
At the independence time Pakistan produces only food grains agriculture raw material. On
this time there was no industry and no raw material was being exported from these areas. As a
new country there will be a very difficult to run the banking system immediately. On this time
there were only 19 non Indian foreign banks were engaged solely in export of agricultural
crops from Pakistan, while there were only 2 Pakistani institutions i.e. Habib Bank and
Australasia Bank work in Pakistan. And also the Indian Government withheld Pakistan share
of 75 crore in cash balance held by them at the time of partition. The urgency of assuming
control of banking and currency in Pakistan was very badly felt now.
However contrary to the recommendation the Govt. of Pakistan decided to establish o fullfledged central bank. In 1 July 1948 the Founder of Pakistan Quaid-e-Azam Muhammed Ali
Jinnah inaugurated the State bank of Pakistan. The first important task of State bank was to
issue the currency notes and withdrawal the reserve bank of India notes.
The first note issue in October 1948 in the denomination of 5, 10 and 100 and by august 1949
state bank withdrawal the reserve bank notes of value of 125.02 crore with help of Pakistan
notes. And then the permission of State bank that Habib bank have authority to spread their
branches in around the country. And the central bank open to small commercial bank and
avoid opening the foreign bank in Pakistan.
At the beginning of time Pakistan banking become more modernized ATM ,SWIFT EBANKING and many innovative banking system occur in the banking system of Pakistan. A
new concept of interest free loans Islamic banking also come in Pakistan. This will be made
more comfortably to the people of Pakistan.