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Monetary Evaluation CRUCIAL STEPS Targeting main sector of Pakistan i.e. Agriculture sector by offering “Kissan schemes” Making financial management easy through differentiated products Operations through strong network of branches, backed by advanced computerized and control system Strengthening of capital base to meet requirements of State Bank BOP is an “equal opportunity provider” so no hiring on gender basis Hiring of educated people & compensating them accordingly Promotion from within the company Decentralized decision making LEHMAN BROTHERS The bankruptcy of Lehman Brothers remains the largest bankruptcy filing in U.S. history with Lehman holding over $600 billion in assets. It was occurred in September 2008. Effect of Lehman Brother Insolvency on Bank of Punjab Lehman Brother insolvency was occurred in 2008 at that time the bank of Punjab really suffering form the Hamesh Khan Fraud. Due to all these crisis the interest percentage increases by 2%.(13% to 15% ). DUBAI CRISIS The Dubai Debt Crisis 2009 has been called by economists a consequence of real estate bubble burst when on November 26, 2009 vaDubai proposed to delay repayment of its debt which includes delay in the payment of $ 59 Billion debt on Dubai World, the investment vehicle for the emirates for 6 months. Dubai's Economy: Dubai has one of the most unique and unusual economies in the world. Dubai has numerous free zones including Jebel Ali free zone, Dubai Maritime City, Dubai Internet City, and Dubai Media City. Contrary to the general assumption that Dubai's economy is totally driven by oil and gas,It is a fact that oil sector only comprises less than 6% of the economy of Dubai. In fact, Dubai's portion of natural gas revenues in the United Arab Emirates is only about 2%. Dubai's oil production is estimated to be about 240,000 barrels per day. It is true that Dubai's economy was built on the back of Oil Money but Dubai's oil reserves have diminished significantly and are expected to be exhausted in 20 years. The other largest contributing sectors of Dubai economy areReal estate and construction (22.6%), trade (16%), (15%) and financial services (11%) (all are 2007 figures). The Burst of the Bubble: 1. Dubai, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, had borrowed $80 billion in a four-year construction boom to transform the economy into a regional tourism and financial hub. 2. This emirate in the due course of time suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak. 3. Dubai world with $59 billion of liabilities, sought a “standstill” agreement from creditors. Its debt includes $3.52 billion of bonds due Dec. 14 from property unit Nakheel PJSC. 4. Some analysts say that : The core reason for the Dubai Financial mess up is that Sheikh Mohammed's decision to invest all his wealth as well as Dubai govt fortunes in Real estate markets in United states through a foreign investment arm of Emaar,which claimed to be the second largest property developer in US ,which ultimately went bankrupt due to recession. 5. Subsequently, Dubai shifted into crisis mode with its dangerous building boom stalled, its lending bonanza vanished and government pondered wider steps to rescue banks. Effect of Political Instability Political instability effect the Bank of Punjab badly. In 2002 President Gen. Mushraff elected the Hemesh Khan as the president of Bank of Punjab. He committed the fraud of Rs 10 billion given as a loan for personal gain to Sheikh Muhammad Afzal without fulfilling the legal requirements. He also committed the crim of opening 23 fake accounts and given the loans of Rs 4.5 billions. Currency devaluation Devaluation is a reduction in the value of a currency with respect to other monetary units. In common modern usage, it specifically implies an official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. In contrast, (currency) depreciation is most often used for the unofficial decrease in the exchange rate in a floating exchange rate system. The opposite of devaluation is called revaluation. Effect of Currency devaluation Due to the devaluation of the currency the infalation increases in the country due to which the investment and the saving in the Bank of Punjab decreases which effect a lot the BOP.
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