Brief History of Pakistani Banks in 2000s
At present there are 25 domestic scheduled commercial banks with 8,523 branches and 19 foreign banks with 83 branches in operation in the country. Total assets of domestic scheduled banks amounted to Rs. 1540.69 billion on 13 March 1997. Their assets increased by 11.3 percent during the last year. Total investment of the scheduled banks in government securities, treasury bills and other investments in shares and securities rose by Rs. 61.2 billion.
When banks were nationalized in January 1974, all weaker banks were merged with stronger ones and five major banking companies were formulated through the process of merger. These were:
- Habib bank Limited
- United Bank Limited
- National Bank of Pakistan
- Allied Bank of Pakistan
- Muslim Commercial Bank Limited
In 1991, the government of Nawaz Sharif adopted the policy of deregulation and privatization of the banking sector. As a result of it two of the above five banks (Allied Bank of Pakistan and Muslim Commercial Bank Limited) have been privatized.
Furthermore, in order to strengthen and broaden the financial network and promote efficiency, permission for opening the following 10 new commercial banks in the private sector was granted on August 1991:
- Bank Commerce Al-Habib Limited
- Soneri Bank Limited
- Union Bank Limited
- Mehran bank Limited
- Indus Bank Limited
- Prime Commercial Bank Limited
- Askari Commercial Bank Limited
- Bolan Bank Limited
- Capital Bank Limited
- Republic Bank Limited
All the banks except Capital Bank Limited and Republic Bank Limited have started functioning. During the year 1991-92, the total number of Pakistani scheduled banks rose to 18, during the same period 3 new Pakistani banks commenced their operations Pakistan.
Two new commercial banks namely, Metropolitan Bank Limited and Habib Credit and Exchange Bank Limited were established in the private sector during 1992-93 raising total number of Pakistani scheduled banks to 20. Following cancellation of one foreign bank, viz. Middle East Bank Limited and transfer of its three Pakistani branches to Emirates Bank Limited with al its assets and liabilities, the number of foreign banks declined from 22 at end-June 1992 to 21 at end-June 1993. During the year 1993-94, one new commercial bank namely, Schon Bank Limited in private sector commenced business, so the total number of Pakistani scheduled banks rose to 21.
Three new private commercial banks, viz. Faysal Bank Limited, Platinum Commercial Bank Limited and Prudential Commercial Bank Limited commenced their business during 1994-95. In addition, two provincial banks, viz. The Bank of Punjab and the Bank of Khyber were declared as scheduled banks effective from 19 September 1994. On the other hand, Mehran Bank Limited was amalgamated with the National Bank of Pakistan. So during 1994-95 the total number of Pakistani scheduled banks stood at 25. The number of foreign banks reduced from 20 to 19 because six branches of Mussraf Faisal Al-Islami of Bahrain were take over by Faysal Bank Limited with all its assets and liabilities during 1994-95.
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