Banks History Pakistan

Topics: Bank, Fractional-reserve banking, Cheque Pages: 3 (831 words) Published: January 16, 2012
At the time of partition, the total number of commercial banks was 38, out of these: the Pakistan banks were 2; Indian banks 29 while the exchange & the total deposits of Pakistan banks stood at Rs.880 million whereas the advances were Rs.198 million. Before the partition of sub-continent, the entire banking business was almost controlled and managed by non-Muslims. The Muslims were deliberately kept cut of banking profession by the healthy Hindu community. When Hindu capitalists became sure of the division of sub-continent: they secretly began transferring their capital to the safe place in India, this act of Hindus had a when Pakistan declared an independent state in august 1947. The fund and other valuables were transferred at an accelerated pace to India. There was mass scale migration of non-Muslims from West Pakistan to India, which also caused the drain on the bank deposits. The Hindus in order to rain the economy of the newly established state closed down most of head offices and the branches of the scheduled and non-scheduled banks in Pakistan. The number of scheduled banks branches were reduced from 619 to 213 only both wings of the country after independence. The non-schedules banks also suffered a severe jolt and their number was reduced from 411 to 106 over the same period. West Pakistan where there was greater exodus of non-Muslims to India suffered a great deal as a number of branches fall down from 487 to 69. In the East Pakistan though the number of branches were not closed in such a great number as in West Pakistan, a large number of portion of the deposit were withdrawn from the banks and transferred to India by the non-Muslims. The mass scale closure of branches and with drawl of the deposits caused a dead lock in the banking business in Pakistan. The government of Pakistan was quite aware of the serious banking situation caused by the withdrawal of deposits and whole scale migration of banking staffs to India. It took up the challenge...
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