WHAT IS BANKING?
'Bank' means to trust, to have faith. The word 'Bank' also means an institution, which accepts deposits from the people and grants loans to traders, against some security and earns a certain percentage of profit. Banking means to have complete knowledge about the written rules and regulations ad well as unwritten and written I complicated system of accounts and audit. This subject has been prescribed with economics accountancy is the highest qualification which is pretty difficult and quite a lengthy course. As banking is linked with banks, therefore we should know that there are seven types of banks in Pakistan. First the central Bank (State Bank), which was, establish on July 1, 1945 at Karachi. State Bank issues currency, ensures sound banking system in the country, controls foreign currency and fixed the ratio of exchange and as the chief financial adviser to the Government, on all matters relating the credit, currency, floating of loans, exchange control and all other monetary problems. Number two is National Bank (it is semi-Govt Bank); number three is commercial Bank (To supply capital) to businessman. Number four is Industrial Bank (Granting long term loans to industries). Number five : Agricultural Bank (To supply loan to farmers). Number six : exchange Bank (To facilitate the foreign trade by buying & selling the bills of exchange) and number seven Co-operative banks (They advance loans for cottage/domestic industries. In general commercial banks cater for the common people as they receive deposits and pay some profit. There are various types of deposits as (1). Current deposits (no interest no profit) (2) Fixed deposits (the amount can be drawn after a fixed period and the interest is more than the saving deposits. (3). Saving deposits (the interest rate is generally 8 to 10%) Commercial Banks have other duties to perform, such as to grant loans,invest in industries (by purchasing shares). They discount bills and earn profit. They send money from one place to another, keep ornaments and bonds in their safe custody; they also collect rent, electricity, sui-gas charges, T.V. licence fees etc. All Banks help in controlling the inflationary trend.
'Bank' means to trust, to have faith. The word 'Bank' also means an institution, which accepts deposits from the people and grants loans to traders, against some security and earns a certain percentage of profit. Banking means to have complete knowledge about the written rules and regulations ad well as unwritten and written I complicated system of accounts and audit. This subject has been prescribed with economics accountancy is the highest qualification which is pretty difficult and quite a lengthy course. As banking is linked with banks, therefore we should know that there are seven types of banks in Pakistan. First the central Bank (State Bank), which was, establish on July 1, 1945 at Karachi. State Bank issues currency, ensures sound banking system in the country, controls foreign currency and fixed the ratio of exchange and as the chief financial adviser to the Government, on all matters relating the credit, currency, floating of loans, exchange control and all other monetary problems. Number two is National Bank (it is semi-Govt Bank); number three is commercial Bank (To supply capital) to businessman. Number four is Industrial Bank (Granting long term loans to industries). Number five : Agricultural Bank (To supply loan to farmers). Number six : exchange Bank (To facilitate the foreign trade by buying & selling the bills of exchange) and number seven Co-operative banks (They advance loans for cottage/domestic industries. In general commercial banks cater for the common people as they receive deposits and pay some profit. There are various types of deposits as (1). Current deposits (no interest no profit) (2) Fixed deposits (the amount can be drawn after a fixed period and the interest is more than the saving deposits. (3). Saving deposits (the interest rate is generally 8 to 10%) Commercial Banks have other duties to perform, such as to grant loans,invest in industries (by purchasing shares). They discount bills and earn profit. They send money from one place to another, keep ornaments and bonds in their safe custody; they also collect rent, electricity, sui-gas charges, T.V. licence fees etc. All Banks help in controlling the inflationary trend.
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