Download classification of banks according to place of

Banks can be classified into various
types on the basis of their functions,
ownership, domicile, status, etc. The
main types of banks in Pakistan are as
under
•Classification On The
Basis Of Functions:


Central Bank:
The most important bank in a country is
the central bank. It stands at the top of
all other banks. The main aim of a
central bank is to maintain monetary and
economic stability of a country. It enjoys
the monopoly of note issue. Every country
has a central bank of its own with
different names.
* 2. Commercial Bank:
* Commercial banks are the most common type of
banks.They conduct their business purely on profit motive.
The main function of a commercial bank is to accept
deposits from those who have surplus funds and lend on
interest to those who require funds. The National Bank of
Pakistan, the Habib Bank Limited, the Muslim Commercial
Bank Limited, the United Bank Limited, are some of the
examples of commercial banks in Pakistan.
*
Commercial banks are the most common type of
banks.They conduct their business purely on profit
motive. The main function of a commercial bank is to
accept deposits from those who have surplus funds
and lend on interest to those who require funds. The
National Bank of Pakistan, the Habib Bank Limited,
the Muslim Commercial Bank Limited, the United
Bank Limited, are some of the examples of
commercial banks in Pakistan.



Government Ownership of Banks
. government ownership of banks. We assemble data
which establish four findings. First, government
ownership of banks is large and pervasive around the
world. Second, such ownership is particularly significant in
countries with low levels of per capita income,
underdeveloped financial systems, interventionist and
inefficient governments, and poor protection of property
rights. Third, government ownership of banks is
associated with slower subsequent financial development.
Finally, government ownership of banks is associated
with lower subsequent growth of per capita income, and
in particular with lower growth of productivity rather
than slower factor accumulation. This evidence is
inconsistent with the optimistic development' theories of
government ownership of banks common in the 1960s,
but supports the more recent political' theories of the
effects of government ownership of firms
INDUSTRIAL BANKS
• are those which meet the long-term credit needs of
industries. The leading countries of the world have
separate industrial banks to provide industrial
finance. Industrial Development Bank of Pakistan
was established in 1961 to provide long-term
finance for the promotion of industries. The Industrial
Bank of Japan, the Industrial Mortgage Bank in
Finland the Industrial Development Bank of Pakistan
are the examples of industrial banks.
Agricultural banks

provide long-term, medium-term and
short-term finance to agriculture sector.
Zarai Taraqiati Bank of Pakistan, the
Federal Land Bank of America, the
Agricultural Mortgage Corporation in
England are some of the examples cf
agricultural banks.
exchange banks
 are those specialized banks which carry on foreign
exchange business. Foreign trade transactions are
settled through these banks. Exchange banks
purchase, sell and collect foreign bills, issue letter of
credit, facilitate foreign remittances through bank
draft, telegraphic transfer, etc.

The principal aim of saving banks is to collect
and pool together the scattered savings of
the community. Saving banks are usually
departments of commercial banks. There may
be separate saving-banks in some countries
of the world. In Pakistan, there is-no saving
bank. Commercial banks and post offices
carry on saving banks functions. The saving
banks invest funds in the safest government
securities.
Investment banks

 purchase and sell shares, bonds and securities. They
assist joint stock companies and government bodies
to raise money through the sale of shares and bonds.
Investment banks also perform the usual banking
functions of receiving deposits and advancing loans.
Investment Corporation of Pakistan and National
Investment Trust Ltd. (N.I.T) are serving as
investment banks in Pakistan.



Mortgage banks provide long-term loan against the
mortgage of agricultural lands, houses and other
such immovable property. House Building Finance
Corporation is working as mortgage bank in Pakistan
to provide funds for house building.
3.9. Micro-finance bank:
The main objectives of micro-finance banks is to
provide small loans to small traders, the loans are
granted for short-term and medium terms. In
Pakistan micro-finance banks and Khush-hali bank
are the examples of this type of bank.
Classification On The Basis
Of Ownership
 The
banks which are Owned and
controlled by the government of a country
are called public sector banks. For
example. National Bank of Pakistan Ltd.
and.First Women Bank Ltd
*The
banks which are owned and
operated by the private sector are
called private sector banks. For
example, Al-Habib Bank Ltd.Askari Bank
Ltd.KASB Bank Ltd., etc.
*
• The banks which are established and controlled under
Co-operative Societies Act are called co-operative
banks. In Pakistan these banks are set up under the Cooperative Society Act 1925. These banks are very
essential for improving the conditions of rural
agriculturists and small producers.
• They are not profit making institutions. The Federal cooperative bank, Punjab provincial cooperative bank Ltd.,
Sind Provincial Co-operative Bank Ltd., KPK Provincial
Co-operative Ltd.and Baluchistan Provincial Cooperative Bank Ltd. are the examples of co-operative
banks in Pakistan.
Co-operative bank
Classification On The Basis Of
Domicile
 On the basis of domicile, the banks can
be divided into two types as follows:
*The
banks which are registered and
incorporated within the country are called
domestic banks. These banks provide
financial assistance domestically. In Pakistan
the
banks
registered
under
Pakistan
Companies Ordinance 1984 and regulated
under Pakistan Banking Companies Ordinance 1962 are called domestic banks. National Bank
of Pakistan Ltd, Habib Bank Ltd, Askari Bank
Ltd, etc, are the domestic banks in Pakistan.
*

The banks which have their origin and
head offices in the foreign country are
called foreign banks. Foreign banks are
the branches of the banks incorporated
abroad. The Standard Chartered Bank
Ltd, National and Grindlays Bank Ltd,
Al-Falah Bank Ltd, are some examples
of foreign banks.
Foreign banks:
CLASSIFICATION ON
THE BASIS OF STATUS
On the basis of status, the
banks can be classified as
follows:
SCHEDULED BANK:
• A bank which is included in the list of banks
maintained by the central bank of the country is
called scheduled bank. A bank, in order to be
scheduled, has to fulfill certain conditions. It
should co-operate with the central bank in
making its monetary policy successful. A
scheduled bank may be commercial bank,
industrial bank, agricultural bank or an exchange
bank.
NON-SCHEDULED BANK:
A
non-scheduled bank is one which is not
included in the list of banks maintained by
the central bank. It does not require to
maintain any balance with the central
bank or satisfy other requirements.