Banking

Banking Human left the need of bank when they used the money as a medium of exchange.

Definition of bank; A financial institution which deals with money and credit it accepts deposits from individuals, firms, and companies, give them low interest rate on it while it charges high interest rate that needs the credit. In fact, banks pay no interest on some types of accounts, such as checking accounts or current accounts. Sometimes they even charge a fee to look after customers

History of banking in Pakistan; Most of banking business was in the hands of Hindus of British people and only two banks were in the hands of Muslims and one bank was already in Pakistan. There were 19 nonIndian foreign banks in Pakistan before independence whose policies and operations were controlled by their head offices abroad. These banks were engaged in export of crops from Pakistan. Bank is an institution transacting the business of accepting, for purpose of lending, of deposits of money from the public, repayable on demand otherwise, and withdraw able by cheque, draft order or otherwise and includes any post office saving bank. Banks are financial intermediaries. The role of a financial intermediary is to sell its own obligations with attractive features, at higher prices than paid to buy. Bank acquires some interest on selling its obligations and bears the same on buying. In 1974, all the existing banks were nationalized by the Government. The performance of nationalized banks deteriorated due to government protection to employees, resulting into the provision of inferior products and poor services. It also discouraged the private investors and foreign financial institutions. The poor performance of nationalized banks caused the reforms/privatization of banking sector in early 1990s. This study reflects an updated picture of Pakistani banking sector since its creation. It enables the readers, academician and bankers to have a look about banking developments in Pakistan as the journey from conventional banking to Islamic banking to enhance their understanding Pakistan’s banking sector consists of commercial banks, foreign banks, Islamic banks, development finance institutions (DFI’s), and micro-finance banks. Presently there are 26 commercial banks, 6 DFI’s, and 11 micro-finance banks operating in the country.

List of banks in Pakistan Public Sector Banks 

National Bank of Pakistan

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The Bank of Punjab

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Sindh Bank

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Bank of Khyber

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First Women Bank

Specialized banks 

Industrial Development Bank

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SME Bank

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The Punjab Provincial Cooperative Bank

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Zarai Taraqiati Bank Limited

Private Banks 

Askari Bank

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Allied Bank Limited

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MCB Bank Limited

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Bank Alfalah

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Bank AL Habib

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Faysal Bank

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HBL

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Habib Metropolitan Bank

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JS Bank

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NIB Bank

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Samba Bank Limited

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Silk bank Limited

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Soneri Bank

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Summit Bank

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United Bank Limited

Islamic banks 

BankIslami Pakistan Limited

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Meezan Bank

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MCB Islamic Bank

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Al Baraka Bank Pakistan Limited

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Dubai Islamic Bank

Foreign Banks 

Deutsche Bank AG

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Industrial and Commercial Bank of China Limited



Citi Bank

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Standard Chartered Pakistan

Microfinance Banks 

Khushhali Bank Limited

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NRSP Microfinance Bank

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Apna Microfinance Bank Ltd. (formerly NMFB)

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FINCA Microfinance Bank Limited (Formerly Kashf Microfinance Bank Ltd.)

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Mobilink Microfinance Bank Limited

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Pak-Oman Microfinance Bank Ltd. (POMFB)

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Tameer Microfinance Bank Limited (TMFB)

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The First MicroFinanceBank Ltd. (FMFB)



The Punjab Provincial Cooperative Bank Ltd

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U Microfinance Bank Limited

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Waseela Microfinance Bank

Topics 1) PESTEL Analysis 2) Porter Five Forces Model 3) Scenario Analysis 4) SWOT analysis

(1) PESTEL ANALYSIS A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.

Political Factors These are all about how and to what degree a government intervenes in the economy. This can include – government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labor law, environmental law, trade restrictions and so on.

Economic Factors Economic factors have a significant impact on how an organization does business and also how profitable they are. Factors include – economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses and so on.

Social Factors Also known as socio-cultural factors, are the areas that involve the shared belief and attitudes of the population. These factors include – population growth, age distribution, health consciousness, career attitudes and so on. These factors are of particular interest as they have a direct effect on how marketers understand customers and what drives them.

Technological Factors We all know how fast the technological landscape changes and how this impacts the way we market our products. Technological factors affect marketing and the management thereof in three distinct ways: 

New ways of producing goods and services

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New ways of distributing goods and services

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New ways of communicating with target market

Environmental Factors These factors have only really come to the forefront in the last fifteen years or so. They have become important due to the increasing scarcity of raw materials, pollution targets, doing business as an ethical and sustainable company, carbon footprint targets set by governments (this is a good example were one factor could be classes as political and environmental at the same time).

Legal Factors Legal factors include - health and safety, equal opportunities, advertising standards, consumer rights and laws, product labeling and product safety. It is clear that companies need to know what is and what is not legal in order to trade successfully. If an organization trades globally this becomes a very tricky area to get right as each country has its own set of rules and regulations.

(2) Porter Five Forces Model Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment. He identified five forces that make up the competitive environment, and which can erode your profitability. These are: 1. Competitive Rivalry; This looks at the number and strength of your competitors. How many rivals do you have? Who are they, and how does the quality of their products and services compare with yours? Where rivalry is intense, companies can attract customers with aggressive price cuts and high-impact marketing campaigns. Also, in markets with lots of rivals, your suppliers and buyers can go elsewhere if they feel that they're not getting a good deal from you. On the other hand, where competitive rivalry is minimal, and no one else is doing what you do, then you'll likely have tremendous strength and healthy profits. 2. Supplier Power; This is determined by how easy it is for your suppliers to increase their prices. How many potential suppliers do you have? How unique is the product or service that they provide, and how expensive would it be to switch from one supplier to another? The more you have to choose from, the easier it will be to switch to a cheaper alternative. But the fewer suppliers there are, and the more you need their help, the stronger their position and their ability to charge you more. That can impact your profit.

3. Buyer Power.; Here, you ask yourself how easy it is for buyers to drive your prices down. How many buyers are there, and how big are their orders? How much would it cost them to switch from your products and services to those of a rival? Are your buyers strong enough to dictate terms to you? When you deal with only a few savvy customers, they have more power, but your power increases if you have many customers. 4. Threat of Substitution; This refers to the likelihood of your customers finding a different way of doing what you do. For example, if you supply a unique software product that automates an important process, people may substitute it by doing the process manually or by outsourcing it. A substitution that is easy and cheap to make can weaken your position and threaten your profitability. 5. Threat of New Entry.; Your position can be affected by people's ability to enter your market. So, think about how easily this could be done. How easy is it to get a foothold in your industry or market? How much would it cost, and how tightly is your sector regulated?

(3) Scenario Analysis A technique that develops plausible alternative views of how the environment might develop in the future. Scenario planners usually avoid presenting alternatives in terms of finely calculated probabilities. Scenarios tend to extend too far into the future to allow probability calculations and besides, assigning probabilities directs attention to the most likely scenario rather than to the whole range.

DEFINE OBJECTIVE AND SCOPE •Define the issues, decisions or key variables to be evaluated • Set the scope of study, including the time horizon to be considered • Agree on approach, select team members and secure senior management commitment DEFINE KEY DRIVERS • Identify key external drivers that are likely to influence scenarios • Define the major internal variables that need to be addressed • Establish critical relationships between drivers COLLECT AND ANALYZE DATA • Collect quantitative, qualitative and expert opinion data

• Assess the predictability and impact of the key drivers • Define appropriate measures for the key drivers DEVELOP SCENARIOS • Construct scenarios and develop a narrative description for each • Test the scenarios using the data collected • Update scenarios and set criteria for evaluating strategies and plans APPLY SCENARIOS • Test sensitivity of strategies and plans under each scenario • Formulate contingency plans and risk mitigation strategies • Communicate to all constituencies MAINTAIN AND UPDATE • Integrate leading indicators and key performance metrics • Refresh the data and update scenarios as appropriate over time • Repeat as needed

(4) SWOT Analysis Strengths Strengths describe the positive attributes 

What makes you unique in your competitors?

 What advantages do you have over your competition? 

What do you do better than anyone else?

Weaknesses Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage.

 Does your business have limited resources? 

What could you improve?

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What should you avoid?

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What factors lose you sales?

Opportunities Opportunities are external attractive factors that represent reasons your business is likely to prosper. 

What good opportunities can you spot?

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What interesting trends are you aware of?

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Changes in technology and markets on both a broad and narrow scale.

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Changes in government policy related to your field.

Threats Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur. 

What obstacles do you face?

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What are your competitors doing?

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Are quality standards or specifications for your job, products or services changing?

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Is changing technology threatening your position?

Preliminary Report Subject; Strategic Management

Submitted To; Mam Nosheen Sarwat

Submitted By; Muhammad Shakeel

Roll NO# 49

INSTITUTE OF MANAGEMENT SCIENCES BAHAUDDIN ZAKARIYA UNIVERSITY M ULTAN