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&a n k i n g S y s t e mt r u c t u r e i n P a k i s t a n

:re p a r e d b y&Syed Ali Abbas Zaidi Mo

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What is a Bank ? What is a Bank ?

1) Bank is an institution

Chartered by a State or Federal AgencyAccepts demand deposits

Offers commercial loans.

2) Bank is a financial intermediary which

Collects credit from lenders in the form of depositsLends in the form of loans

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)1 epositsA commercial bank holds deposits for individuals and businesses in the

form of

Current Accounts Savings Accounts ( )Certificates of deposits varying maturities

) LoansA commercial bank issues loans in the form of

Personal loans Business loans .Mortgages

rimary Activityrimary Activity

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1) Central Bank State Bank of Pakistan

Operate as Regulator of the EconomyDevise Monitory and Fiscal PoliciesRegulator for other banks in Country

2) Commercial Bank - Commercial banks handle banking needs for

Large and Small businessesIndividuals

) -3 Investment Bank Work in the investment markets and do not take customerdeposits

ypes of banksypes of banks

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Organisationrganisation andnd Structuretructure off Commercialommercial Banksanksq Structure of Banks

Banks can be classified into three groups in terms of sizeand asset concentration Small Medium and .Large

Size and asset concentration often determines theorganisational structure of a bank

q Other factors Affecting Organisational Structure Services offered Branch Networking Specialize products Technology

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Board of Directors

(Chief Administrative Officer Board/ / /Chairman President CEO Managing Director

&AccountingOperations Division

&Accounting AuditDepartment

Operations( ,check clearing

,postingAccount, &verification

)Customer complaint

- &Fund RaisingMarketing Division

Tellers orCustomer Service

officers

New Accounts

&AdvertisingPlanning

Lending DivisionOr Loans

Department

CommercialLoan

Consumer Loan

TrustDivision

PersonalTrusts

BusinessTrusts

rganizational Structurerganizational Structuref Banksf Banks

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&nit &nit Branchranch Bankinganking Organisationsrganisations q Unit banking

banking organisation whereby all services of.banks are offered from one office

,Such office may have offer facilities such as- , ( ),drive in windows automated teller machines ATM- -retail store point of sale terminals that are ,linked to the banks computers system and Online

( ).Banking internet website

q Branch banking This system offered where full range of banking,services are offered from several locations

which includes a head office and their operated.branch offices

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/dvantages Disadvantages of/dvantages Disadvantages ofranch Bankingranch Banking Advantages

Branch Banking enhances REACH of banks tocustomers

,It provides easy improved and convenience in

services to the customers It reduces transaction costs for customers

Disadvantages Full branching may lead to increase in

/operational service cost It may lead to edging out of small competitors It may lead to variation in type and quality of

.services from branch to branch of the same bank

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ommercial Banksommercial Banks The commercial banks in addition to provide

working capital and long-term financing tothe investors, offers a range of vital services,

such as remittances of profits / dividends

currency accounts, etc.

The specialized development institutionsprovide credit for investment in varioussectors.

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inancial Statements of Banksinancial Statements of Banks( ) Financial statements FSs is also known as road map of a

,banks which indicates the past present and futurepositions in turn to provide actual facts and figure and

also helpful to making decisionsFSs also reflect the type of services banks are offering

.and the size of banks

FSs can be grouped into two main forms (Balance sheet Report of Condition) and (Income statement Report of Income).

The balance sheet comprises in to two parts (Financial Outputs uses of funds or Assets) (Financial Inputs sources of funds or liabilities plus

equity capital).

The income statement also comprises of two components (Financial Output revenues and incomes) (Financial Inputs the cost of acquiring funds orexpenses).

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Sale and buy-back agreement

Musharakah (Joint Venture)

Mudarabah

MurabahaHibah (Gift)

Ijarah

Takaful (Islamic Insurance)

slamic Financial Transactionslamic Financial TransactionTerminologyerminology

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!hank You!hank You