This was the first

phase of
developments of
Pakistan’s
commercial banki
ng system. In
subcontinent,
Reserve bank of
India
was central bank.
The bank of India
closed down most
of its offices in
Pakistan,
which had been
working as the
agent of Reserve
Bank of India was
not willing to
purchase even
token amounts of
the governmentof
Pakistan.
Securities and
Indian reserve
bank’s issued
notes were not
marketabledeclare
d by India
government. The
Reserve Bank of
India was hardly
of any help.
Itrefused to help
the govt. of
Pakistan so
salaries and other
obligations did
not fulfill.After
independence of
Pakistan 1947,On
December 1948
British
government
decide todivide
the reserves of
India central
bank
30 percent
reserves

for Pakistan
and 70
percentreserves
for India. After
taking this reserve
In May 1948
“Muhammad Ali
Jinnah”
immediately
establish
“state bank
of Pakistan”.
After one year in
November 1949,
national bank of
Pakistan
was established
inDacca (East
Pakistan). The
main purpose was
to act as an agent
of state bank
of Pakistan. Num
bers of more
banks were
established
according to the
need of a country
with passageof
time.
3.2 Phase-2
1974-79
Nationalization
of banks
In Bhutto
government
nationalized the
banking system.
Thus throughthe
Nationalization
Bank Act
1974, SBP and all
commercial banks
in Pakistan
andcarrying on
business in or
outside the
country were
brought under the
governmentowner
ship with effect
from January
1974.
The ownership
and management
of all
Pakistan banks
stood transferred
and rested in
the federal
government. The
chairman, director
andchief
executive of
various banks
were removed
from their offices
other than
thoseappointed by
the federal
government and
the state bank.At
the time of
Nationalization,
there were
following
14 Pakistani
commercial banks
with3323 offices
allover Pakistan
and 74 offices in
foreign countries:
1. National banks
of Pakistan 2. Hab
ib bank limited 3.
Habib bank (overs
eas) limited 4. Uni
ted bank limited 5.
Muslim commerc
ial bank limited 6.
Commerce bank li
mited 7. Standard
bank limited 8.Au
stralia bank limite
d
2
9. Bank of Bahaw
alpur limited 10. P
remium bank limit
ed 11. Pak Bank li
mited 12. Sarhad
bank limited 13. L
ahore commercial
limited 14.Punjab
provincial co-
operative bank lim
ited

A Pakistani
banking counsel
was established
for
nationalizedcomm
ercial banks to co-
ordinate their
activities. The
Pakistan banking
council prepared
ascheme for the
recognition of
banks. This
scheme was
notified in 1974,
according to
itsmall banks
combined with
big banks so these
five banks or
units
were established:
1.National bank
limited 2.Habib
bank
limited 3.United
bank limited 4.
Muslim
commercial bank
limited 5.Allied
bank of Pakistan
limited
 In 30th June,
1974. The bank
Bahawalpur was
merged with the
National Bank
of Pakistan. The
premier Bank
Limited merged
with Muslim
Commercial
Bank limited
and Sarhad Bank
Limited , Pak
bank limited merg
ed with Australia
bank limited (Alli
ed Bank of
Pakistan limited)
 In 31st Dec.1974,
the commerce
bank limited
merged with the
United
Bank limited.
In 30th June,
1975 when the
standard bank
limited was
merged with
Habib
Bank limited.
b)

Causes of
nationalization:
Distribute equal
amount of wealth
b/w peoples of
country
To remove
unhealthy
competition
among banks it
was thought they
createdfinancial
and economic
problems
c) Result of
nationalization:
Although there
are doubts
about the positive
results of the
nationalization
butwe can say
that
The banking
facilities
expanded in the
rural areas.
Bank deposits
rose very
substantially
during a period
Emphasized
lending policies,
national building
projects,
discouraged
non- productive
and unhealthy
activities like
hoarding.3

increase in the
number of foreign
branches of
Pakistani banks
3.3 Phase-3
1979-91
Islamisation
process:
Interest was an
important target
in this phase.
The Islamic bank
was madeand it
receives deposit
without guarantee
ing any
return. The
Islamic bank
cannot financethe
project of an
investor; the bank
will have to be
a partner in the
project.
3.4 Phase-4
1991-2000
Privatization
and Deregulati
on process:
In 1991, the
government of
Prime Minister
Mr. Nawaz Sharif
wasnot fully
satisfied with the
performance of
nationalized. He
took step
towards privatizat
ion of banks,
industries. So
Pakistani banking
sector is
categories as State
Bank of Pakistan,
Nationalized
Scheduled Banks,
Private
Scheduled Banks,
Foreign
Banks,investment
banks, specialized
banks.
a) The
government
owned banks till
2009:
1. First Women B
ank Limited 2.Ind
ustrial Developme
nt Bank of Pakista
n3. Khushhali Ba
nk Limited 4.Nati
onal Bank of Paki
stan5. SME Bank
Limited 6.The Ba
nk of Khyber 7. T
he Bank of Punja
b 8. Zarai Taraqi
ati Bank Limited
9. The Punjab
Provincial
Cooperative Bank
Limited
b) The banks
which are
privatized by the
government:
1. Allied Bank Li
mited (privatized i
n1993) 2. Habib
Bank Limited (20
03)3. MCB Bank
Limited (1991) 4.
United Bank Limit
ed (2002)
c) Banks which
are already
private:
1. Al Baraka Bank
(Pakistan)
Limited
(established in
1991) 2. Askari
Bank
Limited(1992)3. B
ank Alfalah Limit
ed (1997) 4. Bank
AL Habib Limite
d (1991)5. BankIs
lami Pakistan Lim
ited (2005) 6. Da
wood Islamic Ban
k Limited (2007)7
. Dubai Islamic B
ank Pakistan Limi
ted 8. Faysal Ban
k Limited (1995)9
. Habib Metropoli
tan Bank Limited(
1992) 10. JS Bank
Limited (2006)11
. KASB Bank Limi
ted (1994) 12. Me
ezan Bank Limite
d (1997)13. Myba
nk Limited (2005)
14. NIB Bank Li
mited (2003)15.
Samba Bank
Limited
(Formerly
Crescent
Commercial Bank
Limited)16.
Silkbank Limited
(Formerly Saudi
Pak Commercial
Bank Limited)
4
17. Soneri Bank L
imited (1992) 18.
Standard Charter
ed
Bank (Pakistan) L
imited (2006)19.
Summit Bank
Limited
(Formerly Arif
Habib Bank
Limited)
d) Foreign banks
in Pakistan:
1. ABN Amro Ban
k 2. N.V Albaraka
Islamic Bank BS
C (EC)3. America
n Expresss
Bank Limited 4. B
ank of Tokyo
Mitsubishi Limite
d 5. Citibank N.A
6. Deutsche Bank
A.G.7. Hongkong
& Shanghai
Banking Corp
Limited 8. Oman
International
Bank
S.O.A.G9. Rupali
Bank Limited 10.
Standard Charter
ed Bank Limited 1
1. Habib Bank
A.G. Zurich…. etc
e) Investment
Banks:
1. Crescent Invest
ment Bank Limite
d 2. First Internat
ional Investment
Bank Limited 3. A
tlas Investment Ba
nk Limited 4. Secu
rity Investment Ba
nk Limited 5. Fide
lity Investment Ba
nk Limited 6. Pru
dential Investment
Bank Limited 7. I
slamic Investment
Bank Limited 8.A
sset Investment B
ank Limited 9. Al-
Towfeek Investme
nt
Bank Limited 10.J
ahangir
Siddiqui Investme
nt
Bank Limited 11.
Franklin Investme
nt Bank Limited 1
2.Orix Investment
Bank (Pak) Limit
ed….etc
f) Causes of
privatization:

The falling
standard of
banking
services delay in
home remittances,
bad debts of the
banks etc.
Discourage
entrepreneurial
activities within
the country , did
not provide
smallloans to
small savers so
living standard of
people were
decline….etc
g) Result of
privatization:

The number of
bank branches
were 3397 on
Dec31, 1973,
reached on 7661
by endJune.
Small loans for
buy house, cars,
land are provided
to nation
Every one can
start business
easily after
showing their
business plans,
banks provide
loan to them
and every
financial help to
businessman/
woman.
Quality products
are marketed at
reasonable price
so living
standards are
improving.5
More competition
b/w banks they
are trying to
provide more
bank services
that’swhy nation
become much
satisfied…….etc