International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue XII, December 2019 | ISSN 2454–6186

Modern Challenges faced by banking sector of Pakistan Evidence from: the First Micro Finance Bank, JS Bank and BankIslami Pakistan

Saad Bashir¹, Zain Saeed Qureshi², Hamza Saeed Qureshi³, Batool Fatima Qureshi⁴

^1,2MS Scholar, Bahauddin Zakariya University, Multan, Pakistan
³Bahauddin Zakariya University, Multan, Pakistan
⁴Nust Business School, Islamabad, Pakistan

Abstract: The purpose of this study is to identify the problems and issues related to banking industry of Pakistan. We have focused on three banks that are specialize in their own field. We adopted the qualitative approach and developed a questionnaire to measure the responses of respondents on a likert scale. The banking history goes way back to Babylonian era. But in Pakistan the very first Pakistani bank is State bank of Pakistan. Pakistan’s banking history is quite diversified. From privatization to nationalization and then again privatization. In Pakistan banking industry is one most growing and innovative industry. Banks plays an important role in an economy. Bank are the financial institution that are regulated and monitored by State bank of Pakistan and channelize the depositor money. This report has focused on issues faced by commercial banks, microfinance institutions and Islamic banks.

Keywords: Current Issues, Problems, microfinance, Islamic banks

Paper type: Research

I. INTRODUCTION

Pakistan’s experience with financial liberalization in the banking sector is vastly limited as compared to the developed world. Our financial sector evolved very differently from banks in the developed world. For nearly a year after partition, Pakistan had no central bank. Habib Bank – established in 1941 – filled this gap initially, until the State Bank of Pakistan (SBP) was set up in 1948 under quasi-government ownership
Subsequently, Habib Bank, Allied Bank and National Bank were amongst the first to start operations with strong support from the central bank. The central bank’s regulatory powers were restored via amendments to the Banking Companies Ordinance (1962) and the State Bank of Pakistan Act (1956). Subsequently, corporate governance, internal controls and bank supervision was strengthened substantially.