Lecture # 20
Branch Banking in Pakistan
• A branch, banking centre or
financial centre is a retail location
where a bank or financial institution
offers a wide array of face to face
service to its customers.
Remittances
Credit
Card
Utility
Bills
Deposits
Branch
ATM
Advances
Internet
Banking
National
providing
services.
financial
institution
personal and business
Bank Structure
President
Group Heads
Divisions & Field
Circle Offices
Regional Offices
Branch Offices
Remittances
Remittances Department
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Demand Draft
Pay Order
Telegraphic Transfer
Mail Transfer
• Travelers Cheque
• Fund Transfer through Internet
• Home Remittances
Demand Draft
Demand Draft
Its a written order, drawn by one
branch of a bank upon another
branch of the same bank, upon
other
bank
under
special
arrangement to pay a certain sum
of money to or to the order of a
specified person”
Parties Involved
•
•
•
•
Purchaser
Issuing Branch
Drawee Branch
Payee/ Beneficiary
Pay Order
A Pay Order is a written
authorization for Pmt , Made in a
receipt from issued & Payable by
the bank, to the person named &
addressed therein on his giving a
proper discharge thereon “
Parties Involved
Purchaser
Issuing / Paying Branch
Payee
Telegraphic
Transfer
“T.T instructions regarding PMT
are sent to Drawee branch in a
coded
language
and
under
confidential number known as
TEST Number”
Parties Involved
Applicant
Remitting or Drawing Branch
Drawee Branch
Beneficiary /Payee
Mail Transfer
Like T.T funds can be remitted by
MT for the Cr of the payee a/c or
the Beneficiary can be advised to
receive the PMT from Drawee
branch either in cash on proper
identification or through his
banker”
Parties Mail Transfer
Applicant
Drawing Branch
Drawee Branch
Beneficiary
Online Fund Transfer
Its also a fund transfer but only by
Online within the Branches.
Parties Involved
Applicant (a/c in Bank)
Beneficiary (a/c in Bank)
2 Branches of Bank (online)
Account Opening Department
Types of Account
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Individual
Joint Account
Sole Proprietorship
Club & Societies
Joint Stock Companies
Agents
Operations & Status Of
Accounts
Nature Of Accounts
Current Account
Profit & Loss Sharing
Current foreign currency
Saving Foreign Currency
Term Deposits
BBA “Basic Banking Account”
Deposit
• Commercial Bank deposit products
offer you an array of privileges and
services. Designed with your banking
needs and comfort in mind, these
convenient accounts prove that, at
Commercial Banks, banking is about a
shared long-term relationship between
bank and you.
• Current Account
The Current Account allows you the
facility of unlimited withdrawals up
to the extent of the balance in your
account. Sometimes There will be
no tax deducted on the funds that
you choose to keep in these
accounts.
• Savings or PLS Account
The Savings Account allows you
the facility of unlimited withdrawals
(up to the extent of the balance in
your account), while accruing profit
on your deposit everyday. You can
have the profit paid to you monthly,
quarterly, annually or as per your
requirement.
• The passbook is the traditional
document to keep track of earnings
in a savings account .
• Term Deposit
The Term Deposit offers you the
dual benefit of attractive returns
with high liquidity, with options to
take your profit monthly, quarterly,
annually or at maturity.
• A time deposit (also known as a
term deposit, particularly in
Canada, Australia and New
Zealand) is a money deposit at a
banking institution that cannot be
withdrawn for a certain "term" or
period of time.
• When the term is over it can be
withdrawn or it can be held for
another
term.
Generally
speaking, the longer the term the
better the yield on the money. A
certificate of deposit is a timedeposit product.
A deposit of funds in a savings
institution under an agreement
stipulating that
(a) the funds must be kept on deposit
for a stated period of time,
b) the institution may require a
minimum period of notification
before a withdrawal is made
• Foreign Currency
You have the option of opening
Current, Savings and Term Deposit
accounts
in
different
foreign
currencies – Like US Dollar, Pound
Sterling, Japanese Yen, and Euros.
This entitles you to avail all the
convenience of local currency
accounts including:
• Unlimited cash withdrawals up to
the balance in your account
• Deposits facility
• Profit accrued on a daily basis
• Automatic rollover of deposits
As per State Bank of Pakistan
circulars/regulations
Demand account
• The cheque is the traditional mode of
payment for a demand account.
• A demand account or demand
deposit (North America: checking
account, UK and Commonwealth:
current account) is a deposit
account held at a bank or other
financial institution,
• For the purpose of securely and
quickly providing frequent access to
funds on demand, through a variety
of different channels.
Commercial
Banks:
Loan Facilities
Loan
• A loan is a type of debt. All material
things can be lent but this article
focuses exclusively on monetary
loans. Like all debt instruments, a
loan entails the redistribution of
financial assets over time, between
the lender and the borrower.
• The borrower initially receives an
amount of money from the lender,
which they pay back, usually but
not always in regular installments,
to the lender. This service is
generally provided at a cost,
referred to as interest on the debt.
• A borrower may be subject to
certain restrictions known as loan
covenants under the terms of the
loan.
• Legally, a loan is a contractual
promise of a debtor to repay a sum
of money in exchange for the
promise of a creditor to give
another sum of money.
• Secured Loan
A mortgage loan is a very common
type of debt instrument, used by
many individuals to purchase
housing. In this arrangement, the
money is used to purchase the
property. The financial institution,
• however, is given security - a lien
on the title to the house - until the
mortgage is paid off in full. If the
borrower defaults on the loan, the
bank would have the legal right to
repossess the house and sell it, to
recover sums owing to it.
• In some instances, a loan taken
out to purchase a new or used car
may be secured by the car, in
much the same way as a mortgage
is secured by housing. The
duration of the loan period is
considerably
shorter
often
corresponding to the useful life of
the car.
• There are two types of auto loans,
direct and indirect.
• A direct auto loan is where a bank
gives the loan directly to a
consumer.
• An indirect auto loan is where a car
dealership acts as an intermediary
between the bank or financial
institution and the consumer
Other Types of Loans
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Credit card debt
Personal loans
Bank overdrafts
Corporate bonds
Personal finance
• Personal finance is the application of
the principles of finance to the monetary
decisions of an individual or family unit.
It addresses the ways in which
individuals or families obtain, budget,
save and spend monetary resources
over time, taking into account various
financial risks and future life events.
• Components of personal finance
might include checking and
savings accounts, credit cards and
consumer loans, investments in
the stock market, retirement plans,
social security benefits, insurance
policies,
and
income
tax
management.
• Personal Finance is a parameter
driven product for catering to the
needs of the general public
belonging to different segments.
One
can
avail
unlimited
opportunities
through
Bank's
Personal Finance.
• With unmatched finance features in
terms of loan amount, payback
period and most affordable monthly
installments,
Bank's
Personal
Finance makes sure that one gets
the most out of his/her loan. Once a
good credit history is established,
the door to opportunity opens much
wider.
Mortgage Finance
• Offers the convenience of owning a
house of choice, while living in it at
its rental value. The installment plan
has carefully designed to suit both
the budget & accommodation
requirements.
• It has been designed for enhancing
financing
facility
initially
for
employees of corporate companies
for
purchase/
construction/
renovation of house.
Business Finance
• In pursuance of the National
objectives to revive the economy of
the country, Bank is providing loans
to small and medium size business
enterprises under Bank's Business
Finance Scheme.
• Goal is to offer a loan, which
enables business community to
receive the financing required by
them based on their cash flows.
Valued customers can enjoy the
convenience of getting financing
on attractive terms with the
minimum processing turnaround
time.