Banking System in Pakistan

Banking System in Pakistan
At the time of independence there were only few banks in Pakistan and there was also not its own central bank. So, there were financial crisis in Pakistan. Under these circumstances, Quaid-e-Azam inaugurated State Bank of Pakistan in July 1948, and thus the Banking System in Pakistan started to grow.

State Bank of Pakistan took many steps to develop banking system. Today we have a better and sound banking system in Pakistan, which is meeting the requirements of modern time quite successfully.
Role of Banks is Economic Development of Pakistan
The commercial banks are playing very effective role in the economic development of Pakistan since 1947. After the creation, the banks paid more attention to following areas:
  • Increase in Savings.
  • Allocation of funds to demanding sectors
  • Formation of new industrial base
  • Financing for the promotion of trade and commerce

The performance or role of commercial banks on stimulation economic growth can be judged through following points:

Mobilization of Deposits:
Increase in savings or deposit is very much necessary for economic prosperity and advancement. Because, more savings or deposit means more investments for productive process, In this regard, the role of commercial banks is prominent in both the pre and post nationalization ear. The commercial banks created awareness and importance of saving among the people which can be checked from following date:
Total deposits of Schedule Bank
        Dec 1997
        Dec 1980
        Dec 1982
        Dec 2002
        Dec 2005
        Dec 2011
        Dec 2014
42,495          (in million Rupees)
69,975          (in million Rupees)
97,810           (in million Rupees)
2,161,098     (in million Rupees)
2,661,697     (in million Rupees)
5,489,300     (in million Rupees)
8,051,600     (in million Rupees)

In order to increase the rate of economic growth or to make rapid economic development, the commercial banks made investments in variety of sectors of economy and to various economic groups. Before nationalization, revolutionary development in industrial sector was took place due to the valuable contribution of commercial banks which can be proved by following statistics:


Total Advances of Schedule Banks
     Dec  1977
     Dec  1980
     Dec  1982
     Dec   2002
     Dec   2005
     June 2011
     June 2014
31,760,7    (in million Rupees)
47,627,7    (in million Rupees)
67,610,3    (in million Rupees)
1,000,331  (in million Rupees)
2,043,982  (in million Rupees)
3,310,800  (in million Rupees)
4,068,000  (in million Rupees)

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