Principles of Money &

Banking
Introduction
to
Banking

By. Prof Riaz Ahmed Mian

 Defining Bank
British Parliament says:
“Any firm or institution doing a bonafide
banking business.”
The word bonafide here means “safeguard.
”

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 1

 Defining Bank
Kent says:
“An organisation whose principal
operations are concerned with the
accumulation of the temporarily idle money
of the general public for the purpose of
advancing to others for expenditure.”

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 2

 Defining Bank
According to Cairncross:
“Bank is a financial intermediary dealer in
loans and debts.”

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 3

 Banking Companies Ordinance
1962:
 “Banking means the accepting for
the purpose of lending or
investing of deposits of money
from the public repayable in
demand or otherwise and
withdrawable by cheque, draft
order or otherwise.”

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 4

Origin and Evolution of
Commercial Banking

5
 The Process:

 Goldsmiths developed the

practice of accepting people’s
gold for its safe custody.

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 6

 The Process – cont’d

 The first bank was formed in

Geneu in 1578 and then the chain
started that has not found its end
yet.

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 7

 The Word “Bank”
 There are different view points
about the origin of the word “Bank”.
Some say that it is an evolution of an
Italian word ‘banque’ which means
bench. The view has the basis. that
early bankers were used to conduct
their business while sitting on benches
in Italy.
(cont’d..)

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 8

 The Word “Bank” - cont’d

 Some others say that ‘banc’ is the

origin of word ‘Bank’. ‘Banc’ is a
German word which means a joint
stock firm.

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 9

 Types of Banks

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 10

 Types of Banks

1. Central Bank
2. Commercial Bank
3. Industrial Bank
4. Co-operative Bank
5. Agricultural Bank
6. Savings Bank
7. Investment Bank
(cont’d..)

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 11

 Types of Banks – cont’d
8. Exchange Bank
9. Mortgage Bank
10. Islamic Bank
11. Scheduled / Non-Scheduled
banks

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 12

 Classification on the Ownership
Basis
 Public Sector Banks
 Private Sector Banks

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 13

 Classification on the Domicile
Basis
 Domestic Banks
 Foreign Banks

Prof. Riaz Ahmed Mian, HCBF, University of the Punjab 14

thank U

Best of Luck