BANKING IN PAKISTAN

Banking in Pakistan

Banking in Pakistan

Banking is one of the most influential factors on the economies of today s society. As with everything these days, technology is changing where, when and most of all, how we do things, specifically banking and other related financial transactions and arrangements such as mortgages, etc.

Objective

Recently, in Islamabad, the capital city of Pakistan, citizens were in the midst of two possible bank mergers, which would have changed banking and on a larger scale the entire economy, in many ways.

Main aim: In comparison to the larger banks of the world, Pakistan s most major banks are not even close to the size and caliber of international banks like ING Direct, for example. This would not typically be a problem for Pakistani banks, however when these international banks move into Pakistan, which has happened already, and is bound to happen even more as time passes and Pakistan becomes a more prosperous country, it quickly becomes a very large problem. Banks are an extremely affluent business. Regardless of where you are in the world banks are right at the top of the list when it comes to capital, equity and earnings. Pakistan fits right in, in comparison to the rest of Pakistan. But when we compare Pakistan s banks to those of other countries, or even better, international banks, they are simply insignificant.

wider understanding of the topic: Hypothetically speaking, if the entire world were opting whether or not to adopt a single currency, most deciding factors would be made by the banks of each individual country. Pakistan, although it is a major world leader in many other categories, would not be looked upon as a country that knew much about international stature, in terms of banking. In this essay I will try to prove how banking is one of the most influential factors on the economy by using factual cases from recent times.

Background

What do better customer relations mean? Increasingly, customers are demanding more convenient ways to do their banking. An Ernst and Young study (Technology in Banking Report) concluded, "Nothing changes in the banking world if customers cannot get financial services when and where they wish...this means anywhere, at any time. Statistics show that ATM s telephone banking, and home banking account for over fifty percent of all banking transactions today, and total non-branch activity is growing at fifteen percent a year. In one survey (Web-Tech, Inc., 2005), eighty-two percent of 18- to 34-year olds polled preferred banks with 24-hour service.

Literature Review

Customers are also demanding a more sophisticated mix of products tailored specifically to their financial needs, and non-bank competitors are better fulfilling these needs. Banks today hold only 20% of household financial assets, versus 34% twenty years ago; they have 30% of business deposits, versus 42% only seven years ago. Non-bank credit card providers have gained inroads against banks, holding a 25% market share versus 5% in 1986 (WebTech, Inc., 2005).

Methodology

Internet banking offers an attractive solution to this redesigned products and ...