Monday, 24 September 2012

Discuss the role of commercial banks in economic development of Pakistan

The banking system in Pakistan is very well organized and commercial banks are playing very important role in the economic development of the country. All the banks are operating their business under the supervision of the State Bank of Pakistan. We can discuss the role of commercial banks under the following heads :

1. Mobilization Of Savings :-
It is a very big task for the banks. Savings of the people in urban and rural are mobilized by the commercial banks and these are used for investment.

2. Increase In Investment :-
The banks and financial institutions advances loans for various development projects to public and private sector. By increasing the rate of investment it has increased the rate of economic growth in the country.

3. Helpful For The Govt. :-
Government of Pakistan is introducing the various types of monetary and fiscal measures to stable the economy, time to time. The commercial banks under the guidance of the SBP help to achieve the objectives of the monetary policy.

4. PLS Scheme :-
The bank have also introduced the profit and loss sharing accounts. At the end of the financial year they announce the profit. The depositors receive profit instead of interest.

5. Agency Services :-
The banks perform various types of services for the customers. They keep the valuable goods in their safe custody. They collect the utility bills of Gas and phone and electricity etc. They receive and pay the deposits.

6. Promote Exports :-

The commercial banks are providing finance to promote the exports. In this regard letters of credit are issued. For the guidance of exporters export promotion cell is established by the banks.

7. Capital Formation :-
It is the basic requirement for the economic development. The banks are very helpful in increasing the real assets of the nation. The banks are very helpful in financing the new development in the country.

8. Qarze Hasna :-

This scheme is introduced by the commercial banks to provide  loan to the poor students. This facility is provided to Pakistani students in side and out side the country.

9. Trade Promotion :-
The banks are providing finance for domestic and international trade. This facility has increased the volume of trade and encouraged the exports.

10. Loans For Consumable Items :-
Now banks are also providing loans for consumable items like car, house etc. The people are paying the debt in small investments and enjoying all the facilities.

11. Entry Of New Banks :-
Now in the banking sector Government has allowed the private banks to play their role in mobilizing the savings and advancing the loans. Due to competition their services for the customers are improving.

12. Demand Oriented Banking :-
Now the banks will have to play their role according to the demand of the market. A bank may earn a high reward if he meets the demand of the customers and solves their problems. Now in Pakistan commercial banks have accepted this challenge and they are trying their best to meet the demand of the customers.


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