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Write kinds of banks by functions or by ownership?

Write kinds of banks by functions or by ownership?

KINDS OF BANKS (BY FUNCTIONS) Different banks on the basis of the different function can be renowned with the different names. In other words, the bank can also be classified on their functional ground which detailed given below.

CENTRAL BANKS: Every country must have its Central bank which is responsible for the financial and economic stability of a country, controller of credit, custodian of foreign exchange, etc. It has monopoly over issuance of currency notes, regulates and formulates policies for the scheduled banks in a country. It offers services to the state and banking industry only. “STATE BANK OF PAKISTAN” doing the job as Central bank of Pakistan

COMMERCIAL BANKS: Commercial banks generally provide credit to the businessman to promote trade and business. It receives the deposit and provides loan service to the public against interest. Their important functions are payment against cheques, issuance of letter of credit, discounting bills of exchange, transferring of money. They play an important role in the creation of credit money. Habib Bank, Muslim Commercial bank and Allied bank are the leading commercial bank in Pakistan.

AGRICULTURAL BANKS: The agricultural banks play a vital role in the development of agricultural field. It provides loan to farmers, landlords, and feudal, to enable them to buy fertilizers, seeds, tractors etc. the loans are offered for short term basis against mortgage of land and its harvest or crop of a season. “AGRICULTURAL DEVELOPMENT BANK” doing job as agricultural bank of Pakistan

INDUSTRIAL BANK: Industrial bank, as obvious by its name, provide services to industrial sector. The industrial bank plays a vital role in the development of industries in a country. They provide long term and short term loans to the industrialists. They prepare feasibility reports on new projects, provide consultations service on the establishing of factories. Industrial bank play crucial role in the development of developing countries like Pakistan because such Countries have unlimited opportunities, “INDUSTRIAL DEVELOPMENT BANK” doing job as industrial bank of Pakistan

EXCHANGE BANK: Exchange banks provide bank funds for the import and export business of country. They established for promoting of foreign trade. They deal in foreign exchange. They provide foreign exchange to importers. They buy and sell foreign exchange at open market rates that are different from central bank rates. These banks also provide finance to international trade. Now foreign exchange dealings are made by commercial banks and money changers.

SAVING BANK: Saving banks established to promote saving in a country and they gather small savings and turn into large capital that is utilized in the development of commerce and trade. Saving banks promote saving habits in the people through offering interest or profit on a very small investment. “NATIONAL SAVING AND INVESTMENT BANK” doing job as saving bank of Pakistan

MORTGAGE BANK: Mortgage banks lend for purchasing and reclaiming land, discharging old debts. They mortgage 50% of the land. The period of loan ranges between 15 to 30 years. These loans are provided to their members.


PRIVATE BANK: this is the bank which is formed as a private company that’s run by a group of persons, relatives of friends not exceeding fifty in numbers.

PUBLIC BANK: These types of banks are established under the company’s ordinance 1984 and enjoy public investment. Most of the commercial banks are founded as public banks which minimum members is seven

PARTNERSHIP BANK: these types of banks are established under partnership Act 1932. The capital is brought in by partners whose minimum number is two and maximum is ten

STATUTORY BANK: these types of banks are established under the statute of a legislative assembly (parliament). In Pakistan, its examples included state bank of Pakistan, agriculture development of Pakistan, etc.

these types of banks are established under the order of king or queen of a country, Bank of England is its example.

COOPERATIVE BANK: these types of banks are established under cooperative societies act are called cooperative bank

NATIONALIZED BANK: these types of banks are initially established under company’s ordinance 1984 and later were taken up by the government in 1974 in Pakistan


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