GROUP MEMBERS:

1. SAMEIA FARHAT
2. SAIMA KAUSAR
3. SEHAR IFTIKHAR
4. ANDLEEB ZARA
5. ZAMZAM FATIMA
UNIVERSITY OF EDUCATION, BANK
ROAD LAHORE
DEPARTMENT:

BBA (Hons) 8
th
Semester
Introduction
History
Threats
Roles of commercial banks
Function of commercial banks
Commercial bank services
INTRODUCTION
The financial sector in Pakistan consist of
commercial banks, development finance
institutions, micro finance banks, non bank finance
companies, modarba, stock exchange and
insurance companies.
Providing banking services to individuals, small
businesses and large organizations.
INTRODUCTION
An institution which accepts deposits, make
business loans and offer related services.
The structure of banking sector in Pakistan
underwent significant changes after 1997 when the
banking supervision process was aligned with
international best practices.
Privatization of public sector banks and the ongoing
process of merger/consolidation brought visible
changes in the ownership, structure, and
concentration in the banking sector.

HUMBLE BEGINNINGS, 1947 1970

For nearly a year after partition, Pakistan had no
central bank. Habib Bank established in 1941
filled this gap initially, until the State Bank of
Pakistan (SBP) was set up in 1948 under quasi-
government ownership.
The role of domestic banks was particularly limited
at the time.

A LEGACY OF PUBLIC CONTROL, 1970 1980

Under the nationalization policy thirteen banks were
brought under full government control, and consolidated
into six nationalized banks.
These measures were meant to improve lending to
prioritized industries.
BUSINESS AS USUAL, 1980-1990

Over time, the financial sector grew to serve
primarily large corporate business, politicians and
the government. Board of Directors and CEOs
were not independently appointed.
Banks were essentially not in control of their
destinies during this period.
PRIVATIZATION, 1990 1997

By 1991, the Bank Nationalization Act was amended,
and 23 banks were established of which ten were
domestically licensed. Muslim Commercial Bank was
privatized in 1991 and the majority ownership of Allied
Bank was transferred to its management by 1993.
More importantly, administered interest rates were
streamlined and a system of auctioning government
securities was established.

USHERING IN THE REFORMS, 1997 2006

Legal impediments and delays in recovery of bad loans
were streamlined in 2001.
Lending to small and medium enterprise had previously
been neglected, whereas consumer and mortgage
finance had not developed prior to reforms.
THE POST-REFORM ERA, 2006 PRESENT

Buoyed by the spirit of liberalization, the sectors
landscape has changed significantly. By 2010,
there were five public commercial banks, 25
domestic private banks, six foreign banks and four
specialized banks.
There are now 9,348 bank branches spread
throughout the country.
Multipronged reforms.
Freezing of foreign currency accounts.
Continued stagnation in economic activities.
Low Growth
Accountability and loan recovery.
THREATS FOR COMMERCIAL BANKS
CATEGORIES OF COMMERCIAL
BANKS IN PAKISTAN

Commercial banks operating in Pakistan can be
divided into four categories:
1. Nationalized Commercial Banks (NCBs).
2. Privatized Banks.
3. Public Banks.
4. Foreign Banks.

LIST OF COMMERCIAL BANKS
OPERATING IN PAKISTAN
Allied Bank Limited
Askari Bank
Bank Alfalah
Bank AL Habib
Barclays Bank Pakistan
Citibank Pakistan
Faysal Bank
First Women Bank
Habib Bank Limited
Habib Metropolitan Bank
Habib Bank AG Zurich
HSBC Pakistan
JS Bank
KASB Bank Ltd
MCB Bank Limited
MyBank
National bank of Pakistan
NIB Bank Pakistan
Royal Bank of Scotland
Pakistan
Standard Chartered
Bank Pakistan
Silkbank Limited
Soneri Bank
Summit Bank
United Bank Limited
ROLE OF COMMERCIAL BANKS

Processing of payments through EFTPOS, Internet
Banking and many other means.
Issuing bank drafts and bank cheques.
Accepting money on term deposit.
Lending money by overdrafts.
Providing documentary and standby L/C,
guarantees and other form of off-balance sheet
activities.
Cash management and treasury.

CONTINUE
Safekeeping of documents & other items in safe
deposit boxes.
Sales, distribution or brokerage, with or without
advice.
Merchant banking and private equity financing.
Today large commercial banks usually have an
Investment Bank arm, which underwrite bonds,
and make markets in currency, interest rates, and
credit-related securities
COMMERCIAL BANK FUNCTIONS

The functions of commercial bank can be
classified as follows:
1. Primary Functions
2. Secondary Functions
3. Development Functions

I. PRIMARY FUNCTIONS:

The basis of Commercial Bank operations.
Central in Nature.
Core of the whole operations of Bank.

Primary functions include:
1. Accepting Deposits
2. Giving Loans

1. ACCEPTING DEPOSITS

(a) Demand Deposits or Current Accounts:
Repayable on demand
No interest is paid on them
A little commission is charged
Small interest is paid to the people who keep
large balances.
(b) Fixed Deposits or Time Deposits:
Can only be withdrawn after the expiry of the
period.
Higher interest is paid

(c) Savings Bank Deposits:
Midway between current and fixed accounts.
The rate of interest is less than on fixed
deposits.
2-GIVING LOANS
Receiving of deposits is not all about a
banks function.
A bank pay interest after collecting money, a bank
invests it or lends it out.
Money is usually lent to businessmen or traders for
short periods because the bank must prepare to
meet the demand of the depositors who have
deposited for short periods.
WAYS OF MONEY ADVANCEMENT BY
BANKS

Some ways of money advancement are as follows:
(a) By allowing an Overdraft
(b) By Creating a Deposit
(c) Discounting Bills


WAYS OF MONEY ADVANCEMENT BY
BANKS
(a) By allowing an Overdraft:
Customers have right to over-draw their accounts
means they can get more than they have
deposited.
The over draft amount varies with the financial
position of the borrower.

WAYS OF MONEY ADVANCEMENT BY
BANKS
(b) By Creating a Deposit:
Cash-credit is a way of lending by which a person
wants a loan from bank, he has to satisfy the
manager about his
1)Ability to repay
2)The soundness of his venture
3)His honesty of purpose.
Bank require a tangible security, or satisfaction of
borrowers personal security.

WAYS OF MONEY ADVANCEMENT BY
BANKS
(b) By Creating a Deposit:
The details of time and rate of interest are settled
and the loan is advanced and when time completes
the borrower with interest give amount back to the
bank and thus bank make profit by giving loans.

WAYS OF MONEY ADVANCEMENT BY
BANKS
(c) Discounting Bills:
A way in which banks purchases these bills through
bill brokers and discount them to companies or
directly to the merchants.
Investment in bills is quite safe and liquid asset.

2-SECONDARY FUNCTIONS:

The secondary functions can be classified as follows:
A. Agency functions
B. General Utility services
C. Miscellaneous / Other

A. AGENCY FUNCTIONS

The bank performs different functions for their clients
and while doing so they act as an agent of their
clients. Such functions are called Agency functions
Agency functions are as follows:

1.Collection of Dividends:
Banks act as a agent for their clients collect
dividends and interest on stocks and shares.
Bank charges small commission against such
services.


A. AGENCY FUNCTIONS

2. Collection of Cheques:
Commercial banks while collecting and making
payments of bills, cheques etc act as an agent of its
clients.
3. Obeying Standing Instructions:
Sometimes clients order the bank to make
payments like subscription fees of clubs or journals,
annual membership fees etc.
The bank charges a minute amount for the
execution of such instructions.

A. AGENCY FUNCTIONS

4. Selling & Purchasing Securities:
Commercial bank sometimes purchase or sells
securities or shares on behalf of its clients.
5. Executor or Trustee:
A client may direct his bank to act as an executor or
trustee in dealing or setting disputes with other
business parties.
Bank provide technical knowledge or assistance on
certain particular matters and charges a small fee
for this.


A. AGENCY FUNCTIONS

6. Funds Transfers:
Commercial banks can transfer funds from one
banks or branch to another this gives ease to
clients, and increases the liquidity of money
deposited.
A client can use his cheque book even at any bank.
7. Agent Representative:
A commercial bank is also a representative of his
client as required by the circumstances or in
dealing with other banks or financial institutions.
B. GENERAL UTILITY SERVICES

1. Providing Lockers
2. Issuance of Credit Instruments
3. Providing Trade Informations
4. Underwriting Services
5. Financing Foreign Trade
6. Export Promotion Cells:

.

Zakat Collection
Collection of Utility Bills
Encashment Services
Guarantee, Indemnity Business
Safe Custody
Advice of Financial Letters

C. MISCELLANEOUS FUNCTIONS
Commercial banks today are the biggest financial
intermediary. It is in these commercial banks that most
of the nations deposits are housed.
In the present day economics, Commercial banks while
standing close to central banks play their role in
achieving the economic targets set by the government.
They help the state bank in order to implement
effectively the desired monetary and fiscal policy.



III. ROLE IN ECONOMIC DEVELOPMENT
(DEVELOPMENT FUNCTION)

COMMERCIAL
BANK SERVICES
ALLIED BANK LTD
It was established in Lahore in 1942

It is largest bank in Pakistan with 700 branches
Bank provides different services like Hajj Services,
Utility Bills,Lockers,Remittances,1-Link ATM,
Business Account, Foreign Currency Account

ASKARI BANK LTD

Establish on October 9, 1991, as a public limited
company.
Starts its operations on April 1 1992
Askari Bank Limited has 222 branches in Pakistan.
The bank provide Islamic, agricultural, cooperate
and investment services

BANK ALFALAH LTD
Bank Alfalah was incorporated on June 21, 1997
Its banking operations commenced from November
1, 1997
They offer services through a network of 471
branches and 388 state of the art ATMs.

BANK ALHABIB LTD
Run by Dawood habib family group of companies
the bank has a network of 401 Branches (Inclusive
of Sub Branches) & three offshore Banking Units in
Bahrain, Turkey and EPZ.
Its third largest ATM provider service in Pakistan
Bank AL Habib Limited in affiliation with the Arab
Financial Services offers two types of MasterCard.

FAYSAL BANK LIMITED

Faysal Bank started operations in Pakistan in 1987,
In 1995 it starts as a locally incorporated Pakistani
bank under the present name of Faysal Bank
Limited.
FBLs footprint now spreads over more than 260
branches in over 70 cities, with combined business
assets of over PKR 300 billion.

HABIB BANK LIMITED

It was establish in 1941
After independence it moved its office in Karachi.
HBL has grown its branch network and become the
largest private sector bank with over 1,450
branches across the country.

Habib Metropolitan Bank Limited
Habib Metropolitan Bank Limited is a private
bank operating in all major cities of Pakistan
Its primary focus on retail banking andtrade finance.



J S Bank Limited
Presently JS Bank has laid its footprint across
metropolises of Pakistan with plans to expand
its outreach with more branches nationwide this year.

MCB Bank Limited
largest private sector bank in Pakistan.
In 1974, MCB was nationalized along with all other
private sector banks.
. MCB is serving through a domestic network of over
1,193 branches and 688 ATMs across Pakistan.

SAMBA Bank Limited
The bank has a network of twenty eight (28)
branches, in Karachi, Lahore, Islamabad and
Peshawar
It basically provide services of Islamic banking

SILKBANK Limited
SILKBANK Limited has a network of 85 branches in
32 cities across Pakistan