Classification of Banks by 85VHPRT

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									CLASSIFICATION
OF BANKS
Types of Banks
• On the basis of ownership
• On the basis of domicile
• On the basis of Function
Types of Bank on the basis of Ownership
• The banks are classified on the basis of ownership into
  two categories.
• 1. Public sector banks
• 2. Private sector banks
Types of Bank on the basis of Ownership
• 1. Public sector banks:
• The banks owned and controlled by the Government are
 called Public sector bank. e.g Pashtany Bank,

• 2. Private sector banks:
• The banks owned by corporations are called private
 sector banks. e.g Habib Bank, Bank Alfalah etc
Classification of banks on the basis of
domicile
• The banks are divided on the basis of domicile into two
  categories.
• 1. Domestic banks
• 2. Foreign banks
Classification of banks on the basis of
domicile
• 1. Domestic banks.
• The banks registered and incorporated within the country
 are called domestic banks. e.g. Kabul Bank, Azizi Bank
 etc
• 2. Foreign Banks
• The banks which have their origin and head
 offices in the foreign countries are called foreign
 banks. e.g. National Bank, Standard Charted
 Bank etc
 Classification of Banks on the basis of Function
1.    Central Bank:
2.    Commercial Banks:
3.    Exchange Banks:
4.    Saving Banks:
5.     Agriculture Banks:
6.    Industrial Banks:
7.    Co-operative Bank
8.    Mortgage Bank
9.    Investment Bank
10.   Merchant Bank
11.   Consortium Bank
12.   Export-Import Bank
13.   School Bank
14.   Labour Bank
 Classification of Banks on the basis of
 Function
1. Central Bank:
• Central Bank is the bank of banks. Every civilized country now has its
  own central bank.
• The primary function of the central bank is to regulate the flow of money
  and credit in order to promote efficiency, stability and growth in the
  country.
• “Da Afghanistan Bank” is the central bank of Afghanistan. In Pakistan
  “State Bank of Pakistan” is the central bank (in England it is “Bank of
  England” and in America it is “The Federal Reserve System”).
• Functions of central bank are;
  •   Sole right of note issue
  •   Banker, agent and advisor to the government
  •   Banker to commercial banks
  •   Controller of credit
  •   Clearing agent
  •   Lender of last resort
  •   Custodian of foreign exchange reserves
  •   Development Role
  •   Other Functions
    Classification of Banks on the basis of
    Function
2.Commercial Banks:
• Commercial banks are those banks which are engaged in
    performing the routine duties of banking business.
•   They collect surplus money and make loans and advances in the
    form of overdrafts, cash credit and discounting bills of exchange.
•   They also provide special financial services and agency services.
•   Commercial banks in short are considered the life blood of the
    economic society.
•   In Afghanistan Kabul Bank, Azizi bank, Habib Bank etc are
    commercial Banks.
•   Functions of commercial banks are;
    • Basic Functions
    • Secondary Functions
List of Commercial Banks in Afghanistan
• The Afghanistan Bank has licensed 15
  commercial Banks which are members of
  Afghanistan banks association, the following is
  the list,
• Afghanistan International bank (AIB)
• Azizi Bank
• Arian Bank
• Alfalah Bank Limited
• Bank-E-Millie Afghan
• BRAC Afghanistan Bank
• Development Bank of Afghanistan
List of Commercial Banks in Afghanistan
• Export Promotion Bank
• Habib Bank of Pakistan
• Kabul Bank
• National Bank of Pakistan
• Pashtany Bank
• Punjab National Bank of India
• Standard Chartered Bank
• The First Micro Finance Bank
  Classification of Banks on the basis of
3.Function Banks:
  Exchange
• Exchange banks are mainly deal with international trade. These
  banks takes the responsibility of settlement of foreign exchange
  and arrange the foreign businesses.
• In Afghanistan commercial banks have been allowed to do the
  business of Exchange Bank.
• American Express bank, Rupali bank, bank of oman are some
  examples of exchange banks.
• There functions are;
  • Currency exchange
  • Providing information for international business
  • Providing finance for international business
  • Bank drafts and Bill of exchange
  • Letter of credit
 Classification of Banks on the basis of
 Function
4. Saving Banks:
• Saving banks are those banks which collect and keep the small
    savings of the public. They are called thrift promoting institutions.
•   The Saving banks invest the funds in the safest government
    securities and offer reasonable rate of profit on saving accounts.
•   Students, government employees and household women are usually
    opening such accounts.
•   A prior notice to bank is necessary for withdrawal of huge amount
    (More than Afs 15000)
•   National Saving bank in England and Post office saving bank in
    Pakistan are examples of saving banks.
•   There Functions are;
     • Accepting deposits of people for saving
     • Investing the money of people in safe means of investment
 Classification of Banks on the basis of
 Function
5. Agriculture Banks:
• The bank is responsible for the development of agriculture sector
  of the country.
• Agriculture banks are set up to provide financial assistance to the
  agriculturists and agro-based industries.
• Agricultural Development bank of Pakistan, Agricultural Mortgage
  Corporation in England and Federal Land Bank of USA
• There functions are;
  • Providing long term advances for buying tractors etc
  • Short term loan for purchasing seeds and fertilizers
  • Introducing modern techniques in farming
  • Making awareness in farmers by seminars
  • Medium term loans for construction of tube wells
 Classification of Banks on the basis of
 Function Banks:
6. Industrial
• The Industrial banks provide medium and long term credit to the
  industries. The growth of industries depends on these banks.
• Industrial development bank of Pakistan and Industrial bank of
  Japan are working as industrial banks.
• In Afghanistan mostly commercial banks provide financial
  assistance to the industries.
• There functions are;
  • Granting loans to set up new companies
  • Long term loans for machinery and construction of building
  • Loans for modernization and replacement of business units
  • Short term loan for purchase of raw material and payment of daily
   expenses.

								
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