INSTITUTE OF BUSINEES ADMINSTRATION

UNIVERSITY OF SINDH JAMSHORO

MONEY AND
BANKING
TOPIC: FINANCIAL INSTITUTIONS AND BANKING STRUCTURES
OF PAKISTAN

SUBMITTED TO: MA’AM SANOBER SALMAN SHEIKH

SUBMITTED BY: NAME ROLL NO
TANIYA SAHITO 2K18/BBAE/154
SHAH JAHAN BALOCH 2K18/BBAE/135
SHAFEEQUE MAZARI 2K18/BBAE/134
ABDUL JABBAR 2K18/BBAE/04
WHAT ARE FIANCIAL INSTITUTIONS?
 A financial institution is an institute that provides financial services for its diets or
members. Probability the most important financial service provided by financial
institutions is acting as financial intermediaries.
 Financial intermediaries are firm that collect the funds from lenders and channels those
funds to borrowers.

TYPES OF FINANCIAL INSTITUTIONS IN PAKISTAN

 The banking sectors and non-banking sectors are regulated by the central bank, state
bank of Pakistan. While rest of the market (lease, stock exchange, modarba, mutual
funds and insurance) is regulated by securities and Exchange Commission of Pakistan.

FINANCIAL MARKETS IN PAKISTAN

STATE BANK OF PAKISTAN EXCHANGE COMMISSION OF PAKISTAN
BANKING SECTOR INSURANCE COMPANIES

PUBLIC SECTOR BANKS STOCK EXCHANGES

PRIVATE BANKS LEASING

FOREIGN BANKS MODARBA

NON-BANKING SECTOR MUTUAL FUNDS

INVESTMENT BANKS

DEVELOPMENTS BANKS

MICRO FINANCE BANKS

ISLAMIC BANKS

DISCOUNTS HOUSES
 COMMERCIAL BANKS
 A type bank providing checking and saving accounts, credit cards and business loans,
Such as bank include general public to deposit their savings in the banks and offers a
wide of services such as:
 Deposits mobilizations
 Money transfer
 Financial working capital
 Investing in government securities
 Call money operations
 These banks are of three categories
 (i) Public sector Banks
 (ii) Private Banks
 (iii) Foreign Banks

INVESTMENT BANKS
 Investment banks perform a veriety of functions. Primarily, they assist corporations to
raise equity-capital by underwriting the public issues. They also assist companies
desiring of mergers and acquisition and derivatives. In additions, they provides sevices
like trading of derivative, foreign exchange, fixed income instruments and shares listed
on the stock exchanges.
 Such banks cannot take deposits. They mange their attairs by charging fees such as
 (i) retainers fee
 (ii) advisory fees based on the transactions,
 (iii) commission on underwriting
 BMA Capital Management Limited
 Invest Capital Investment Bank Limited
 IGI Investment Banks Limited
 DEVELOPMENT BANKS
 These banks provide guidance in section of industrial units and extend direct financial
assistance to party cover their financial requirments, such banks are responsible for
speeding up to party cover their financial requirement, such banks are responsible for
speeding up the pace of economic growth in the country in conformity in conformity
with the national objectives, plans and priorities.
 Their core functions are:
 Direct financial assistance
 Mobilization of domestic savings
 Expending entrepreneurial base by encourage new comers
 Pak china investment Company Limited, Islamabad
 Pak Kuwait Investment Company Limited
 Pak Libya Holding Company Limited , Karachi
 Pak Iran Investment Company limited , Karachi

MICROFINANCE BANK
 A microfinance bank would cater to the credit needs of poor households and their small
enterprises. Thus microfinance bank provide credit to those poor who are not
considered creditworthy by the commercial banks and other financial institutions. They
provide basic training in star of small business, simple book-keeping and accounting.
 The main aim of microfinance bank Limited
 Khushali Bank Limited
 Network Micro Finance Bank

ISLAMIC BANKS
 In Islam, it is prohibited to charge interest in any loan. However, it is aceeptable to pass
on funds to a needy person or corporation for trade purpose in which case profit could
be shared on an agreed basis whereas loss should be shared according to the funds
invested.
 AL Baraka Islamic Bank (merged into Baraka Bank ( Pakistan) Limited
 Bank Islamic Bank Pakistan Limited
 Dubai Islamic Bank Pakistan Limited Meezan Bank Limited-premier Islamic Bank In
Pakistan
 DISCOUT HOUSES
 These are firms which buys and discount bills of exchanged, bankers’ acceptance, commercial
paper, etc. Discount houses also tender for treasure bills, deal in short-dated government
bonds, and are an important part of the short-money markets.
 First Credit and Discount Crops Limited
 National Discounting Services Limited
 Speedway Fordmetal (Pakistan) Limited

INSURANCE COMPANIES
 Insurance is a hedge against the risk of a contingent and uncertain loss. In other words, it is the
Equatable transfer of the riskof the loss, from one entity to another, In exchange for payment.
For this service, the insurer charges a fee called premium depending upon the risk involved.
 IGI Insurance Limited
 East West Life Insurance Company
 New Jubilee Insurance company Limited
 Data Bank International Company

STOCK EXCHANGE
 Stock exchange is a place where securities are bought and sold. Such securities include
share, derivate, units trusts and bonds. It also provides facilities for the issue and
redemption of securities. Prices of shares and bonds are influenced by their demand and
supply like in other commodities
 Karachi Stock Exchange
 Islamabad Stock Exchange

LEASING
 It is a Contract where owner of an asset agrees to allow someone to use it for a fixed rental. It
can be fixed or in define period of time. It is a binding contract which sets out terms of lease
agreement between the owner and the user.
 Asian leasing Corporation Ltd
 ASKARI LEASING LIMITED.
 MUTUAL FUNDS
 It is a professionally managed type of pooled investment for acquiring securities securities like
stocks, bonds, marketable securities and commodities. The profit is distributed by the way of
dividend to all investors.

MODARBA
 It is a form of internship which has two distinct parties:
 (i) the financer
 (ii) the manager
 The financer takes no part of management of the business. The profits are distributed among
the subscriber while the mananger is paid the usual salary.
 Modarba is one the modes of Islamic finance. It is like mutual funds minus its un-islamic
features.