Course: Fundamentals of Money and Banking (1414)
Semester: Spring, 2022
Assignment No. 1
Q1. Define money and describe the qualities of a good money material.
Money, in simple terms, is a medium of exchange. It is instrumental in the exchange of goods and/or services. Further, money is the most liquid assets among all our assets. It also has general acceptability as a means of payment along with its liquid nature. Usually, the Central Bank or Government of a country creates and issues money. Also called cash money, this is a legal tender and hence there is a legal compulsion on citizens to accept it.
Money performs several primary, secondary, and contingent functions. However, in order to perform these functions, it must possess certain qualities. In this article, we will talk about the qualities of good money. Money is commonly referred to as currency. Economically, each government has its own money system. Crypto currencies are also being developed for financing and international exchange across the world.
Money is a liquid asset used in the settlement of transactions. It functions based on the general acceptance of its value within a governmental economy and internationally through foreign exchange. The current value of monetary currency is not necessarily derived from the materials used to produce the note or coin. Instead, value is derived from the willingness to agree to a displayed value and rely on it for use in future transactions. This is money’s primary function: a generally recognized medium of exchange that people and global economies intend to hold, and are willing to accept as payment for current or future transactions.
Economic money systems began to be developed for the function of exchange. The use of money as currency provides a centralized medium for buying and selling in a market. This was first established to replace bartering. Monetary currency helps to provide a system for overcoming the double coincidence of wants. The double coincidence of wants is a ubiquitous problem in a barter economy, where in order to trade, each party must have something that the other party wants. When all parties use and willingly accept an agreed-upon monetary currency, they can avoid this problem.Qualities of Good Money
Here are some important qualities of good money:
An important quality of money is its acceptance. Good money requires acceptance to all without any hesitation. Since the law declares Money as the legal tender, it has an inherent quality of general acceptability.
Apart from its acceptance, good money also requires portability. If people can carry or transfer money from one place to another, then it is good money.
Acceptance and portability aside, the material used to make money must last for a long time without losing its value. For example, ice and fruits are not good money since they lose their value quickly with the passage of time. After all, ice melts and fruits perish. Therefore, durability is an essential quality of good money.
Talking about the qualities of good money, it is important to remember the divisibility of money. If someone wants to buy a smaller unit of a commodity, then divisibility of money can make it possible. For example, cows cannot function as good money. This is because you cannot divide a cow without making it lose its value.
Look at two 100 rupee notes. They look and feel identical, right? They also have the same value. In fact, nobody can distinguish between two currency notes right out of the mint.This is an important quality of good money – homogeneity. If money is not homogeneous, then transactions will become uncertain as people would be unsure of what they are receiving.
The ability to recognize money is critically important. Today, we can look at a currency note and tell its value. If money is not cognizable, then people can find it difficult to determine if they are dealing with money or some inferior asset.
Of all the qualities of good money, stability is probably the most essential one. The value of money cannot change for a long period of time and hence remain stable. If the value of money keeps changing, then it will fail to function as a measure of value and as a standard of deferred payment.
Types of Money
There are several types of money.
Money originates as a feature of the spontaneous order of markets through the practice of barter (or direct exchange), where people trade one good or service directly for another good or service. In order for a trade to occur in barter, the parties to the exchange must want the good or service that their counter-parties have to offer. This is known as the double coincidence of wants, and it sharply limits the scope of transactions that can occur in a barter economy.
However certain goods in a barter economy will be generally desired by more people in trade for whatever they have to offer in barter. These tend to be goods that have the best combination of the five properties of money listed above. Over time, these special kinds of goods can come to be desired in trade partly for their wide acceptance as a means to overcome the problem posed by the double coincidence of wants in future transactions with others. Eventually, people can come to desire a good mostly or solely for its use-value in reducing transaction costs in future exchanges.
Such a good can then be called money because it is generally recognized by participants in the economy as a valuable good for its use as a medium to indirectly exchange other goods and services between multiple parties. The physical commodity will still have some other use-value, but the primary use of any source of value has in the market is for its use as money. Historically, precious metals like gold and silver were adopted as these kinds of market-determined moneys.
Legal Tender and Fiat Money
Sometimes a market-determined money is officially recognized as legal money by a government. Under some circumstances, goods that do not necessarily meet the five properties of optimal market-determined money outlined above, can be used to fulfill the functions of money in an economy. Typically this involves a legal mandate to use a specific good as money (known as a legal tender law) or some kind of prohibition on the use of money (such as the use of cigarettes as a medium of exchange among prison inmates). Legal tender laws specify a certain good as legal money, which courts will recognize as a final means of payment in contracts and the legal means of settling tax bills. By default, the legal tender will typically be used as a medium of exchange by market participants within the political jurisdiction of the authority that declares it to be money.
Fiat moneys can lead to increased economic transaction costs, market distortions, and unintended consequences to the extent that they do not meet the characteristics that make a particular good suitable to serve as money. For example, in modern times, most countries’ legal tender moneys consistently lose value over time, sometimes rapidly, leading to the social costs associated with inflation.
Governmental currencies fall under the category of fiat money. Internationally, the International Monetary Fund and World Bank serve as global watchdogs for the exchange of currencies between countries.
Physical units of currency (cash) can circulate from hand to hand in the course of economic transactions, or by being reassigned from person to person for accounting purposes while being held on deposit at a bank or similar institution. In the second case, tokens or paper notes that substitute for and represent the deposited money are passed from person to person in daily transactions and settled later by financial institutions. Paper notes and checks are examples of these kinds of money substitutes. The use of money substitutes can increase the portability and durability of money, as well as reducing other risks. Money substitutes enhance the function of money by allowing people to simultaneously enjoy the use of their money in day-to-day transactions while also keeping the money secure from theft or physical damage.
Q2. What is money market? Discuss the main instrument traded in the money market.
Markets for trading financial instruments including money, bonds, stocks, and derivative are referred to as Financial Markets. Developed financial markets can play a key role of intermediating between the lenders (savers) and the borrowers (investors), reduce information asymmetries and allow central banks to implement and achieve objectives of monetary and exchange rate policies. Major players in the money market are:
- Central Bank And Government
- Primary Dealers/Market Makers
- Non-bank financial Institution
- Money Market Funds & Corporate
- Money Market Brokers
The money market is one of the pillars of the global financial system. It involves overnight swaps of vast amounts of money between banks and the U.S. government. The majority of money market transactions are wholesale transactions that take place between financial institutions and companies. Institutions that participate in the money market include banks that lend to one another and to large companies in the eurocurrency and time deposit markets; companies that raise money by selling commercial paper into the market, which can be bought by other companies or funds; and investors who purchase bank CDs as a safe place to park money in the short term. Some of those wholesale transactions eventually make their way into the hands of consumers as components of money market mutual funds and other investments.
In the wholesale market, commercial paper is a popular borrowing mechanism because the interest rates are higher than for bank time deposits or Treasury bills, and a greater range of maturities is available, from overnight to 270 days. However, the risk of default is significantly higher for commercial paper than for bank or government instruments.
Individuals can invest in the money market by buying money market funds, short-term certificates of deposit (CDs), municipal notes, or U.S. Treasury bills. For individual investors, the money market has retail locations, including local banks and the U.S. government’s Treasury Direct website. Brokers are another avenue for investing in the money market.
The U.S. government issues Treasury bills in the money market, with maturities ranging from a few days to one year.
Types of Money Market Instruments
Money Market Funds
The wholesale money market is limited to companies and financial institutions that lend and borrow in amounts ranging from $5 million to well over $1 billion per transaction. Mutual funds offer baskets of these products to individual investors. The net asset value (NAV) of such funds is intended to stay at $1. During the 2008 financial crisis, one fund fell below that level.4 That triggered market panic and a mass exodus from the funds, which ultimately led to additional restrictions on their access to riskier investments.
Money Market Accounts
Money market accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw money or write checks against the account. (Withdrawals are limited by federal regulations. If they are exceeded, the bank promptly converts it to a checking account.) Banks typically calculate interest on a money market account on a daily basis and make a monthly credit to the account.
In general, money market accounts offer slightly higher interest rates than standard savings accounts. But the difference in rates between savings and money market accounts has narrowed considerably since the 2008 financial crisis. Average interest rates for money market accounts vary based on the amount deposited. As of August 2021, the best-paying money market account with no minimum deposit offered 0.56% annualized interest.
Certificates of Deposit (CDs)
Most certificates of deposit (CDs) are not strictly money market funds because they are sold with terms of up to 10 years. However, CDs with terms as short as three months to six months are available.
As with money market accounts, bigger deposits and longer terms yield better interest rates. Rates in August 2021 for 12-month CDs ranged from about 0.50% to 0.70% depending on the size of the deposit. Unlike a money market account, the rates offered with a CD remain constant for the deposit period. There is usually a penalty associated with an early withdrawal of funds deposited in a CD.
The commercial paper market is for buying and selling unsecured loans for corporations in need of a short-term cash infusion. Only highly creditworthy companies participate, so the risks are low.
The banker’s acceptance is a short-term loan that is guaranteed by a bank. Used extensively in foreign trade, a banker’s acceptance is like a post-dated check and serves as a guarantee that an importer can pay for the goods. There is a secondary market for buying and selling banker’s acceptances at a discount.
Eurodollars are dollar-denominated deposits held in foreign banks, and are thus, not subject to Federal Reserve regulations. Very large deposits of eurodollars are held in banks in the Cayman Islands and the Bahamas. Money market funds, foreign banks, and large corporations invest in them because they pay a slightly higher interest rate than U.S. government debt.
The repo, or repurchase agreement (repo), is part of the overnight lending money market. Treasury bills or other government securities are sold to another party with an agreement to repurchase them at a set price on a set date.
Money Markets vs. Capital Markets
The money market is defined as dealing in debt of less than one year. It is primarily used by governments and corporations to keep their cash flow steady, and for investors to make a modest profit.
The capital market is dedicated to the sale and purchase of long-term debt and equity instruments. The term “capital markets” refers to the entirety of the stock and bond markets. While anyone can buy and sell a stock in a fraction of a second these days, companies that issue stock do so for the purpose of raising money for their long-term operations. While a stock’s value may fluctuate, unlike many money market products, it has no expiration date (unless, of course, the company itself ceases to operate).
The money market refers to the market for highly liquid, very safe, short-term debt securities. Because of these attributes, they are often seen as cash equivalents that can be interchangeable for money at short notice. The money market is crucial for the smooth functioning of a modern financial economy. It allows savers to lend money to those in need of short-term loans and allocates capital towards its most productive use. These loans, often made overnight or for a matter of days or weeks, are needed by governments, corporations, and banks in order to meet their near-term obligations or regulatory requirements. At the same time, it allows those with excess cash on hand to earn interest. The money market is composed of several types of securities including short-term Treasuries (e.g. T-bills), certificates of deposit (CDs), commercial paper, repurchase agreements (repos), and money market mutual funds that invest in these instruments. The money market funds typically have shares that are always priced at $1.
Q3. What is mutual funds give their importance in capital market of a country?
A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund—derived by the aggregating performance of the underlying investments.
Mutual funds pool money from the investing public and use that money to buy other securities, usually stocks and bonds. The value of the mutual fund company depends on the performance of the securities it decides to buy. So, when you buy a unit or share of a mutual fund, you are buying the performance of its portfolio or, more precisely, a part of the portfolio’s value. Investing in a share of a mutual fund is different from investing in shares of stock. Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
That’s why the price of a mutual fund share is referred to as the net asset value (NAV) per share, sometimes expressed as NAVPS. A fund’s NAV is derived by dividing the total value of the securities in the portfolio by the total amount of shares outstanding. Outstanding shares are those held by all shareholders, institutional investors, and company officers or insiders. Mutual fund shares can typically be purchased or redeemed as needed at the fund’s current NAV, which—unlike a stock price—doesn’t fluctuate during market hours, but it is settled at the end of each trading day. Ergo, the price of a mutual fund is also updated when the NAVPS is settled
A mutual fund is both an investment and an actual company. This dual nature may seem strange, but it is no different from how a share of AAPL is a representation of Apple Inc. When an investor buys Apple stock, he is buying partial ownership of the company and its assets. Similarly, a mutual fund investor is buying partial ownership of the mutual fund company and its assets. The difference is that Apple is in the business of making innovative devices and tablets, while a mutual fund company is in the business of making investments.
Investors typically earn a return from a mutual fund in three ways:
- Income is earned from dividends on stocks and interest on bonds held in the fund’s portfolio. A fund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution. Funds often give investors a choice either to receive a check for distributions or to reinvest the earnings and get more shares.
- If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.
- If fund holdings increase in price but are not sold by the fund manager, the fund’s shares increase in price. You can then sell your mutual fund shares for a profit in the market
Types of Mutual Funds
Mutual funds are divided into several kinds of categories, representing the kinds of securities they have targeted for their portfolios and the type of returns they seek. There is a fund for nearly every type of investor or investment approach. Other common types of mutual funds include money market funds, sector funds, alternative funds, smart-beta funds, target-date funds, and even funds of funds, or mutual funds that buy shares of other mutual funds.
The largest category is that of equity or stock funds. As the name implies, this sort of fund invests principally in stocks. Within this group are various subcategories. Some equity funds are named for the size of the companies they invest in: small-, mid-, or large-cap. Others are named by their investment approach: aggressive growth, income-oriented, value, and others. Equity funds are also categorized by whether they invest in domestic (U.S.) stocks or foreign equities.
Another big group is the fixed income category. A fixed-income mutual fund focuses on investments that pay a set rate of return, such as government bonds, corporate bonds, or other debt instruments. The idea is that the fund portfolio generates interest income, which it then passes on to the shareholders.
Another group, which has become extremely popular in the last few years, falls under the moniker “index funds.” Their investment strategy is based on the belief that it is very hard, and often expensive, to try to beat the market consistently. So, the index fund manager buys stocks that correspond with a major market index such as the S&P 500 or the Dow Jones Industrial Average (DJIA).
Balanced funds invest in a hybrid of asset classes, whether stocks, bonds, money market instruments, or alternative investments. The objective is to reduce the risk of exposure across asset classes.This kind of fund is also known as an asset allocation fund. There are two variations of such funds designed to cater to the investors’ objectives.
Money Market Funds
The money market consists of safe (risk-free), short-term debt instruments, mostly government Treasury bills. This is a safe place to park your money. You won’t get substantial returns, but you won’t have to worry about losing your principal. A typical return is a little more than the amount you would earn in a regular checking or savings account and a little less than the average certificate of deposit (CD)
Income funds are named for their purpose: to provide current income on a steady basis. These funds invest primarily in government and high-quality corporate debt, holding these bonds until maturity in order to provide interest streams. While fund holdings may appreciate in value, the primary objective of these funds is to provide steady cash flow to investors. As such, the audience for these funds consists of conservative investors and retirees. Because they produce regular income, tax-conscious investors may want to avoid these funds.
Q4. Write short note on: –
An Interactive Teller Machine (ITMs) is comparable to an ATM but adds a video terminal option. The video allows users to speak with a teller on a screen. ITMs provide convenience for the customer that a teller normally gives as an in-branch experience but through the screen.
Different names for Interactive Teller Machine (ITMs):
· Personal Teller Machine (PTM)
· .Automated Interactive Teller (AIT)
· Teller Assist Unit (TAU)
· Video Teller Machine (VTM)
· In-Line Teller (ILT)
An Interactive Teller Machine (ITMs) can function as a self-service ATM machine for cash withdrawals and deposits, but it can truly go above and beyond. ITMs can offer more transaction options than traditional ATMs. An Interactive Teller Machine user has the ability to virtually transact business through these units with and (sometimes) without your staff. You may need an employee to be available to speak with the user; however, this individual does not need to be located at the same branch the unit is located. Interactive Teller Machine transactions cost far less per transaction than an in-person teller transaction. Instead of having staff stand at a traditional teller station waiting for customers/members to enter the building or come through the drive-thru to be helped, the employee can reside in a different city and can even be available to work multiple Interactive Teller Machines, not just one. This convenience could allow for job sharing, employee location flexibility, and longer hours for your financial institution.
Interactive Teller Machines also allows for staff to have additional interaction with customers, which can certainly be revenue-generating.
There are far more marketing opportunities with Interactive Teller Machines when compared to traditional ATMs or with no technology at all. They can have additional monitors to display advertising, an offer, or something that may be personalized to a specific customer. The branding and customization is all to be carefully considered when deploying Interactive Teller Machines, as you don’t want to miss this valuable opportunity.
Interactive Teller Machines not only dispense cash and deposit checks as a traditional ATM can, but they can also cash a check down to the penny, perform card-less transactions, make loan payments, open a new account, transfer money between accounts, order replacement cards and so much more. With a core integration, many of these transactions can also be done without any assistance, giving you more time to dedicate to other aspects of your business.
This technology is also excellent for your business customers/members. Interactive Teller Machines allow a commercial customer the freedom to send an employee to make a business deposit without having to have a card/PIN or an account number. The virtual teller can look them up based on the financial institution’s rules and proceed with the transaction.
In a time when we are more sensitive than ever to the health and safety of our employees, Interactive Teller Machines can be a great draw to working for your financial institution. Interactive Teller Machines allow your employees the freedom to do their best work without having to physically touch the currency.
Financial institutions with Interactive Teller Machines often report that their tellers experience less sick time and typically have a higher job satisfaction level. Not to mention that they are no longer in contact with cash and whatever risk they may perceive that to be. Interactive Teller Machines are more accurate than traditional teller lines, as these units are 99.99% accurate when dispensing cash, depositing checks, etc. and they reduce the teller time to reconcile their “drawer.”
(ii) Electronic machine
An electrical machine is a device which converts mechanical energy into electrical energy or vice versa. Electrical machines also include transformers, which do not actually make conversion between mechanical and electrical form but they convert AC current from one voltage level to another voltage level. An electric generator is an electrical machine which converts mechanical energy into electrical energy. A generator works on the principle of electromagnetic induction. It states that whenever a conductor moves in a magnetic field, an emf gets induced within the conductor. This phenomenon is called as generator action.
A generator basically consists of a stator and a rotor. Mechanical energy is provided to the rotor of a generator by means of a prime mover (i.e. a turbine). Turbines are of different types like steam turbine, water turbine, wind turbine etc. Mechanical energy can also be provided by IC engines or similar other sources.
Technology is evolving faster than ever, and as banking and money management becomes increasingly electronic, it’s important to understand new capabilities – not only for convenience, but also for security. Electronic banking, which is also known as electronic fund transfer (EFT), refers to the transfer of funds from one account to another through electronic methods. A 2015 study by the Federal Reserve found that 22 percent of mobile phone owners use mobile payments. As electronic banking becomes increasingly widespread, you’ll likely encounter instances where it’s preferable to make payments or transfer money electronically.
Most people are familiar with ATMs as a method for withdrawing and depositing money quickly and easily. ATMs give you the flexibility to withdraw cash at almost any time. What you might not know is that many ATMs will also let you transfer funds between your accounts and make deposits, providing the quick and easy convenience of 24/7 banking.
One of the most useful features of electronic banking is direct depositing, which allows you to authorize deposits as well as withdrawals from your accounts. If you are paid regularly, your employer may deposit your paychecks directly into your bank account. Similarly, for recurring bills like mortgages or insurance payments, electronic banking enables you to pay the necessary expenses on a regular basis with ease, and without missing payments.
Debit Card Purchases
In many ways, debit card purchases are similar to credit card transactions. With electronic banking, you can make debit card purchases in person, online or over the phone. It provides the convenience of a credit card, but the money is taken directly out of your linked account and you can’t spend more than you have.
Q5. How many types of banks exist in Pakistan? Give a very brief resume of each type.
According to code of exchange Bills of England “In a bank we include every person, firm or company having a place of business where credits are opened by deposits or collection of money or currency, subject to be paid or remitted on drafts or cheques or orders or money as advanced or loaned on stocks etc.
Ordinary banking business consists of changing cash or bank deposits and bank deposits for cash, transferring bank deposits from one person or corporation (one depositor) to another, giving bank deposits in exchange for bills of exchange, government bonds, the secured or unsecured promises of businessmen to repay etc.
Although primary business of bank is to receive deposits and give loans, yet some banks are specialized in one task. While others are in other tasks on the basis of this specialization the banks are classified under the following heads.
- CENTRAL BANK
The Central Bank is the principal bank in a country. It is the head of the banking system in a country. It is the banker’s bank. It is the banker of the government. The deposits of the government are maintained with it, it lends money to the government and has the responsibility of adjusting all the responsibilities in monetary and financial matters which the government bestows upon it. In addition to this Central Bank has the role authority of controlling the credit and money supply of the country. It controls the value of currency by its role right of issuing notes. It controls commercial banks through the various techniques such as discount rate, manipulations, open market operations, changes in the reserve ratio and the selective credit control.
2. COMMERCIAL BANKS
The main function of commercial banks are accepting deposits, lending money through over draft, loans, discounting of bills etc., working as an agent of its customers in the tasks assigned by their customers and financing of trade and industry. But it must be noted that these banks lend money on short term basis. Besides doing the function of commercial banking they also deal in foreign exchange and may do some other banking functions also.
- INDUSTRIAL BANKS
Industrial banks arrange long term loans for industry. These banks accept long term fixed deposits. These banks mainly deal in the financing of industry for long periods. Such loans are also given for specific purposes which are productive and expected to yield return after the allowed time.
4. AGRICULTURAL BANKS
Agriculture has its own problems and hence there are separate banks to finance it. They advance long term and short term loans to agriculturists. Long term credit is needed for making permanent improvements in land, buying more lands and introducing better methods and costlier implements. Short term credit is meant to supply funds for day-to-day operation of the agriculturists. These include buying of seeds and manures, personal and Labour expenses and payment of water rates and taxes etc. the nature of securities offered by the agriculturists and the length of time for which capital is required, make it impossible for commercial banks, exchange banks and industrial banks to make up this finance.
5. LAND-MORTGAGE BANKS
These banks provide loans to the cultivators by mortgaging their land whenever the cultivator has to do some permanent reforms in his land viz making boundary around the field, purchase of machine, digging of well on for any other work. He can borrow money from land mortgage bank by mortgaging his land such banks arrange short, medium and long term loans.
- EXCHANGE BANKS
These banks mainly deal in foreign exchange. They purchase foreign currencies and sell then to those people who have to make payments abroad. Though commercial banks deal in foreign exchange as their specific function, yet these banks are specific in the task. Exchange banks besides financing foreign trade, also finance the internal trade.
- CO-OPERATIVE BANKS
These types of banks are nothing else then commercial banks, but their organization is carried on co-operative lines. The principles of co-operation are different from all other forms of the Joint Stock Organizations. They are treated on different stand due to some peculiarities in regard to their fund and character.
8. SAVING BANKS
Though all commercial banks have saving accounts with them, there may be some specialised banks which deal in the small amounts of the savings of the people.
9. PRIVATE BANKS
While different kinds of banks described above are banks run on modern lines, there are some private bankers who combine trading and carry on their business in the most antiquated form. Such bankers are present in England, their number is sufficiently large even in the country. Almost the whole of the agriculture industry and a considerable portion of the internal trade is financed by them.
10. MISCELLANEOUS BANKS
There are certain other kinds of banks which have arisen in due course to meet the specialised needs of people. In England and America, we have got investment banks whose object is to control the distribution of capital into several uses. American trade unions have also got labour banks where the savings of the labourers are pooled together. Some of the colleges in this country have started student banks to receive the deposits of the student community. The merchant bankers or Accepting Houses of London perhaps represent another highly specialised development of the financial structure.
11. INDIGENOUS BANKERS
In the Indo-Pak sub-continent, these bankers are known by different names in different places. These are known as Shahukar, Khatri, Multani, Shareef, Mahajer Bhal wana etc. These indigenous bankers serve a substantial part of financial need of the country particularly in the rural area.
List of Top 6 Banks in Pakistan
- Habib Bank Limited (HBL)
- National Bank of Pakistan
- Meezan Bank
- Bank Alfalah
- MCB Bank
- United Bank Limited
- Habib Bank Limited (HBL):
In 1941, Habib Bank Limited was the largest Bank by assets in Pakistan. It operates through its wide network of 1751 branches and 2007 ATMs and provides services in the areas of Branch Banking, Corporate Banking, Retail Financing, SME, and Investment Banking services. It is headquartered in the capital of Pakistan, i.e., Karachi. The Bank has branches in various countries, including Europe, Australia, the Middle East, America, Asia, and Africa. The shares of the Bank are listed on the Karachi Stock Exchange.
National Bank of Pakistan:
Founded in 1949 and is the largest state-owned bank operating in Pakistan. It has an extensive branch network of over 1509 branches in Pakistan, a global presence in 11 countries, and representative offices in China and Canada. The Bank acts as a trustee of public funds and agents to the SBP. It is headquartered in Karachi. It provides commercial and public sector banking services and is a leading player in the debt-equity market, investment banking, agriculture financing, retail financing, and treasury services. The Bank is majorly owned by the State Bank of Pakistan, which holds 75.20 percent voting rights as per the shareholding pattern as of Dec 2017 and
Meezan Bank is Pakistan’s first and largest Islamic Bank which commenced its operations in 2002 after being issued the first-ever Islamic Commercial Banking license by the State Bank of Pakistan. It operates under the principle of Islamic Shariah and is recognized for its product development capability, Islamic Banking research, and advisory services. It provides a wide range of Islamic banking products and services through its wide retail branch network of more than 815 branches across Pakistan.