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Financial System of Pakistan

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Dawood Fazal

on 11 May 2015

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Transcript of Financial System of Pakistan

Financial System of Pakistan
BBA 6th Semester (Morning)
Presented To Our Worthy Lecturer
Ms. Maria Faisal
Thanks A Lot!
For Listening & Paying kind attention!
Any Question?
State Bank of Pakistan
Banking System
Financial Structure of Pakistan
Money Market
Functions of SBP
Regulation of Liquidity
Monetary & Credit Policy
Deal with the changes in economic climate
Policy matters
Banking in Pakistan
Designing the procedures
Initiating the schemes
State Bank Of Pakistan
Avg Interest Rate
Karachi Interbank Offered Rate
Issued by Specialized Institution (SBP)
Issued on Daily & Quarterly Basis
Inter Bank Borrowing / Lending Rates (Without Collateral
Presented By :
Zafeer Shahid 08
Muhammad Daud 26
Rizwan Ghafoor 51
Uzair Zahid 56
Majid Hussain 57
Formed in 1948
Existing Governor : Ashraf Mehmood Wathra
Reserve Bank of India
Distribution of Reserves & Establishment of SBP
Significance of KIBOR
Encourages Transparency
Promote Consistency
Improve Management
Maintaining Liquidity Level
Enhance Credit Quality
Financial Markets Association of Pakistan
Formed in 1997
Non-Commercial, Self Financed , Non Profit Organization
Selects the members of KIBOR Club
Updates the KIBOR
Banks who fail to submit KIBOR Rates are immediately suspended

Banking in Pakistan
Government Owned Banks
Commercial Banks & Big Fours
Specialized Banks
Islamic Banks
Micro Finance Banks
Foreign Banks
Government Owned Banks
Owned & Managed by Government (Federal / Provincial)
Mainly formed to regulate & store Government Reserves
National Bank of Pakistan
Bank of Punjab
Bank of Khyber
Sindh Bank Limited

Commercial Banks & The Big 4's
Privatization of Banks

Started in 1990's with a series of phases

Habib Bank Limited
MCB Bank Limited
National Bank of Pakistan
United Bank Limited
Specialized Banks
Foreign Banks
Foreign Investment Banks
Foreign Partnerships
Ruled under SBP
SCB, HSBC, Citi Bank, RBS
Specialized in a particular sector
Involved in Sector Financing mainly

Islamic Banks
Islamic Subsidiary of all convention banks
SBP regulates each bank to invest in Islamic Divisions
Min. 2 Islamic Banking Branches all over Pakistan for each bank till Dec,2015.
Upcoming & Growing Industry
Many Exemptions & Relaxations for investors
Bank Islami Pakistan Ltd.
Meezan Bank Limited
Financial Structure of Pakistan
Consumer Financing

Corporate Financing
Consumer Financing
Launched in 2001
High inflow of Remittances
High Liquidity
Highest Markup / Profit Rates for Banks upto 19%
In 2007, Reached 354.7 Billion PKR


Personal Loans
Auto Loans
House Financing
Credit Cards

Commercial Financing
Commercial Sector Financing
SME Financing plans
Accepting Term Deposits
Lower Rates (3MK + 4%)
Issuing / Lending Money by Installment Loan

Categories / Types:
Secured Loans
Mortgage Loans
Sector Financing
Corporate Financing
Corporate Sector Financing Modes
Dynamic & High Value Products
Lowest Interest / Markup / Index Rates
e.g. 3MK + 1% (Approx)
High Exposures
Long Term Financing

Demand Finances
Cash Finances
Bank Guarantees
Letter of Credits
Project Financing

Money Market
Market of Short Term Assets
Life cycle of Max. 1 Year
Regulation of Liquidity / Money

Players :
State Bank / Central Bank
Commercial Banks
Financial Institutions
Individual Firms / Companies / Corporate Firms
Products & Process
Treasury Bills
Certificate of Deposit
Commercial Paper
Local Authority Bills
Bills of Exchange
Call Deposit
Term Deposit
Floating Rate Notes
Full transcript