Banks primarily provide financial services to customers while enriching investors.
BANKING SECTOR OF PAKISTAN: The Banking sector is an integral part of the country’s financial services industry. The sector witnessed a phenomenal growth in 2001-03 where deposits rose by almost 100%. There are 39 scheduled banks (including 11 foreign banks) operating in Pakistan. Competition is relatively high, especially after the challenging capital adequacy benchmarks set by the State Bank of Pakistan to nourish a stable banking system. Attracting foreign investment and winning profitable customers are the only options left to banks for survival.
Opportunities for foreign banks, especially in consumer and retail banking, are greater than ever before. In the financial year of 2004-05, the banking sector experienced growth rates of 21% and 36% in its deposit and advances portfolio respectively, which in turn, has increased the banks’ stability as compared to the preceding year.
A significant shift of focus from industrial lending to consumer products has allowed the banks to enjoy enormous spreads. However, the manufacturing sector is still enjoying the highest share in credit facilities extended by the banking industry.
The industry is passing through a transitional period from long established patterns and norms to the unknown land of threats and opportunities. And what will demarcate the banking organizations that will turn every change into an opportunity, taking the bull by the horns using the art of change management successfully from the losers.
PAKISTAN’S BANKING SECTOR CAN BE CLASSIFIED UNDER THE FOLLOWING BROAD CATEGORIES
FOREIGN BANKS IN PAKISTAN
The current era has indeed witnessed phenomenal growth in the financial institutions of the country. By March 1995, there were as many as 43 scheduled banks, 13 DFIs,... [continues]
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