CHAPTER 1:

INTRODUCTION OF BANKING
Finance is the life blood of trade,commerce and industry. Now-a-days, banking sector acts as
the backbone of modern business. Development of any country mainly depends upon the
banking system of that country.
The term bank is derived from the French word Banco which means a “Bench or Money
exchange table”. In olden days, European money lenders or money exchangers used to display
coins of different countries in big quantity on benches or tables for the purpose of lending or
exchanging.
The definition of bank is as follows:
“A bank is a financial institution which deals with deposits and advances and other related
services. It receives money from those who want to save in the form of deposits and it lends
money to those who need it”.
The main features of banks are as follows:
⦁ Dealing in money.
⦁ Acceptance of deposits.
⦁ Giving advances.
⦁ Payments and withdrawals.
⦁ Agency and utility services.
⦁ Profit and service orientation.
⦁ Connection link.
⦁ Banking business.
⦁ Name identity.

EVOLUTION OF BANKING
EVOLUTION OF BANKING
The history of banking evolution is very interesting. In the early ages human life and wealth was
not secure. Due to fear of theft people buried their wealth under land but this method was not
satisfactory. People started to search the custodians of wealth. The evolution of banking started
and it has crossed the following stages.
First Stage of Evolution: -
After a great struggle people succeeded in finding the reliable persons to deposit their money
and valuable goods for safety. These people were goldsmiths. These were considered as the
most trusted persons due to their sound financial position and good reputation in society. On the
other hand, they had very strong iron safes for keeping gold, money and other valuable items.
People started depositing their gold and cash in the safe of goldsmiths.Goldsmiths charged
something for this purpose and they returned the depositors their money whenever they
needed. It was the first stage of banking evolution and goldsmiths were the early bankers.

Second Stage of Evolution:-

During this period those receipts which were issued by the goldsmiths against the valuable
goods were being used as a medium of exchange by the merchants. People purchased the
various things from the traders against their receipts. Traders also started accepting the receipts
against the payments. So, the receipts that they used was just like the bank cheque of the
modern age.

Third Stage of Evolution: -

This period started at that time when goldsmiths came to know by experience that people are
using their receipts as a medium of exchange and very few people demand their deposits. So,
they reach to the conclusion that they may lend some portion of their total deposits to some
other people and they can earn profit. Goldsmith started the business of lending. They also
started paying interest to attract the depositors of net cash. Now this business became very
profitable, so the traders and money lenders also jumped in this field.

Fourth Stage of Evolution: -

It was started at that time when people were tempted to deposit more and more cash of the
traders, money lenders and goldsmiths to earn maximum interest. On other hand number of
borrowers also increased borrowing the money. So, for the borrowing and lending business
regular institutions came in to being.
In the present age bank is modernized shape of those institutions. But to earn more profit every
bank started issuing overdraft facility without maintaining adequate cash reserves to meet the
demand of the Depositors. This inability created financial crises. Now they maintain the good
will of the bank every government has established the central bank. All the commercial banks
perform their duties keeping in view the instructions as issued by the Central Bank.
Keeping in view the above discussion about evolution of bank we can say that it is the result of
the different activities of goldsmiths, merchants and money lenders. They are the real founder of
modern banking business. All the basic functions of modern bank like accepting deposits,
advancing loans and money creation are similar with the founders. Now with the changing
business requirements the secondary functions of banks have been changing with the passage
of time.
THE BANK OF PUNJAB
 The Bank of Punjab was established in 1989 under The Bank of Punjab Act, 1989 by the
Government of the Punjab. The Bank was granted status of a scheduled Bank in 1994 by SBP
and currently carries a vast network of 662 online branches spanned across the Country along
with ATM network of 614 ofering 24/7 banking services to its diverse clientele. The Bank’s Head
Office is located in Lahore whereas Treasury & Capital Market operations are being managed
from Karachi. The Bank of Punjab is the second largest public sector bank of the Country.
Geographical breakdown of Bank’s branch network as on December 31, 2021 is as under:
The Government of the Punjab (GOPb), being majority shareholder and sponsor of the Bank,
holds 57.47% shares of the Bank. As majority shareholder, Chairman of the Board is nominated
by the Government of the Punjab from amongst oficial Directors. Further, in terms of section
10(3) of The Bank of Punjab Act, 1989, the Chairman shall preside over meetings of Board of
Directors and shall have a casting vote, but he shall not exercise any executive authority or
power. The President/CEO, besides being Executive Director, runs the afairs of the Bank in line
with governing rules and regulations. The Bank of Punjab, in order to meet business
requirements of its diverse clientele, is ofering all permissible products and services in line with
modern banking requirements. While having multiple deposits products to cater needs of all
type of depositors, the Bank has a strong footprint in the areas of Corporate & Investment,
Commercial, SME, Agriculture and Consumer financing products. The Bank launched Islamic
Banking operations in the year 2013 and is currently ofering a wide range of Shariah compliant
products and services to its valued clients through this platform, as well. Through the umbrella
of Alternative Delivery Channels (ADCs), the Bank is ofering 24/7 services of ATM withdrawals,
Branchless Banking, SMS Banking, Mobile Banking, Phone Banking etc.
While achieving the objective of financial inclusion through its presence in remote and unbanked
areas, the Bank is playing its due role in the economic growth of the Country through its various
specially tailored lending products including initiatives of Government of Pakistan and
Government of the Punjab such as Kamyab Jawan Scheme of Prime Minister of Pakistan, Low
Cost Housing Scheme of Government of Pakistan and Punjab Rozgaar Scheme.
The Bank of Punjab has following Subsidiaries:
1. Punjab Modaraba Services Private Limited
2. First Punjab Modaraba
3. Punjab Capital Securities Private Limited
Vision Statement:
"Your banking partner in creating value and improving lives"
Mission Statement:
"Meet customer needs through innovative technology products/ services to drive business
growth while promoting fnancial inclusion, diversity and prosperity across the nation with a
motivated team through culture of excellence and empathy”
VALUES "E-time":

 Empathy
 Teamwork
 Innovation
 Meritocracy
 Excellence
to ensure best in class customer service
Credit Rating:
RATING DEFINITION
LONG TERM RATING AA: Very High Credit Quality. AA Ratings denote a very low expectation
of credit risk. They indicate very strong capacity for timely payment of financial commitments.
This capacity is not significantly vulnerable for foreseeable events.
SHORT TERM RATING A1+: Obligations supported by the highest capacity for timely
repayment.

CHAPTER:2
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