Types of Banks: Commercial Bank

TYPES OF BANKS
COMMERCIAL BANK
These banks play the most important role in the modern economic organization. Their business
mainly consists of receiving deposits, giving loans and financing the trade of a country. They
provide short-term credit, i.e., lend money for short periods. This is their special feature.
Example: Allied Bank, Askari Bank, Bank Alfalah, Bank Al Habib, Faysal Bank.
Exchange Banks
Exchange banks, finance mostly the foreign trade of a country. Their main function is to
discount, accept and collect foreign bills of exchange. They also buy and sell foreign currencies,
and help businessmen to convert their money into any foreign money they need. Their share in
the internal trade of a country is usually small. In addition, they carry on ordinary banking
business too.
Example: Bank Islami Pakistan Limited, Wallstreet Exchange North Nazimabad Branch, Summit Bank
Ltd, Habib Metro Bank, HBL Currency Exchange, Nursery Branch.
Industrial Banks
There are a few industrial banks in India. But in some other countries, notably Germany and
Japan, these banks perform the function of advancing loans to industrial undertakings. Industries
require capital for a long period for buying machinery and equipment. Industrial banks provide
this type of Mock capital. Industrial banks have a large capital of their own. They also receive
deposits for longer periods. They are thus in a position to advance long-term loans.
Example: BankIslami Pakistan, Al Baraka Bank Pakistan, Dubai Islamic Bank Pakistan, MCB
Islamic Bank, Meezan Bank.
Agricultural or Co-operative Banks
The main business of agricultural banks is to provide funds to farmers. They are working on the
cooperative principle. Long-term capital is provided by land mortgage banks, nowadays called
land-development banks, while short-term loans are given by co-operative societies and co-
operative banks. Long-term loans are needed by the farmers for purchasing land or for
permanent improvements on land, while short-period loans help them in purchasing implements,
fertilizers and seeds. Example: Zarai Taraqiati Bank.
Savings Banks
Every country has its own Central Bank. The Central bank aims at non-profit functioning. It
regulates the monetary and credit system of the country. The central bank acts as controller,
supervisor, and regulator of the activities of commercial banks and other financial institutions in
the country. The Central bank is considered as the apex institution of the country’s money
market.
Example: Faysal Bank Limited,S.M.E. Bank Limited,Samba Bank Limited, Sindh Bank Limited
Soneri Bank Limited, Standard Chartered Bank Pakistan Limited
Microfinance Bank
Microfinance, also called microcredit, is a type of banking service provided to unemployed or
low-income individuals or groups who otherwise would have no other access to financial
services.
Example: Microfinance Khushhali Bank Limited,Mobilink Microfinance Bank Limited
U Microfinance Bank Limited, Pak-Oman Microfinance Bank Ltd. (POMFB),The Punjab
Provincial Cooperative Bank Ltd, Tameer Microfinance Bank Limited (TMFB)
Foreign Exchange Bank:
Foreign Exchange Banks are the banks which provide finance for foreign trade. These banks
accept deposits from the public. Foreign Exchange Banks are specialized banks in providing
credit for the foreign trade. These banks usually have their branches in foreign countries for
uninterrupted functioning of their services. But in recent times commercial banks are also
financing foreign trade.
Example:AlBaraka Bank Pakistan Limited, HBL Currency
Islamic Bank
Islamic banking, also known as non-interest banking, is a banking system that is based on the
principles of Islamic or Sharia law and guided by Islamic economics. Two fundamental
principles of Islamic banking are the sharing of profit and loss, and the prohibition of the
collection and payment of interest by lenders and investors. Islamic law prohibits collecting
interest or "riba."
Example: Meezan Bank Limited, MIB,Bank Islami Pakistan Limited

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TYPES OF BANKS

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