Jan 23 - 29, 20

PAGE approached the two youngsters for their views on banking sector. Following are the excerpts.

SYEDA KINZA TAHERA said banking sector plays a significant role in the economic development of a country and thus every country requires an efficient, competent and well brought-up banking system. Industrial, agricultural and commercial progress of a country is not possible without it.

The importance of banking may be stated in the form of:

Capital Formation: division of economic resources from consumption to capital formation, thus capital growth is enhanced.

Inexpensive Media of Exchange: Issuing of currency notes and cheques.

Development of Trade and Industry: It advances loan to commercial and industrial undertakings

Reservoirs of Funds: Banks act as the reservoir of money in the country and come forward in times of crisis to purchase securities and advance loans.

Transfer of Funds: Facilities of transferring economically and securely.

Dealing in Foreign Exchange: Foreign remittances of funds are possible only through banks.

Money Market Operations: Under the guidance of the central bank, all the banks in the country perform sound management of money market.

Service to Customers: Banks perform various agency services on behalf of their customers.

Nowadays, trend of e-banking has enormously captured the market, which includes automated teller machines, debit and credit cards, net and phone banking.

The banking industry has shown a remarkable performance in the last few years. It turned leveraging on a spectacular growth in deposits, aggressive marketing and investments, and increased efficiency to counteract the impact of a sharp decline in interest rates.

As a result, not only did the profitability of the sector increase, but selected industry indicators also depicted major improvement. This increasing trend is also enlightening privatization and Islamic banking in Pakistan, but unfortunately, the economy is drifted and adversely affected. The pressure on bank's management to maintain profitability under the twin impact of falling return on assets and increasing liquidity has led to concerns over the quality of banks' asset portfolio and earnings.

HUMAM MALIK said in our lifetime, we have been using plenty of banking products that were previously not available to the ordinary person. Most of us have credit cards, loans, investment, and insurance products. This has made banking a much more competitive industry than before, and we have the right to expect great service. Globally, banking sector has increased not only in number but also has now become the integral part of every industry and no part of the world can engage in any of the activities either business related or social without going through banking channels.

It is a not a long time ago that banking system was a very poor one and the procedure for making a transaction was a hard nut to crack but as the world has now changed rapidly or we can say has been revolutionized by computerized systems, now banking is not farther than a click. During the last decade, banking has evolved from industrial and agricultural banking to consumer banking.

If we talk about Pakistani banking and interlink it globally, the growth in banking sector has shot up especially in last 20 years. After the nationalization of banks in 70s, the private banking system was destroyed and the reach of banks limited to cities. In 1990s, after a long time a bank was privatized namely MCB. If we have a glance over the banking sector where, in past it was made to assist the industry has now changed itself into industry of its own and number of private banks is launched which has increased the healthy competition which will ultimately result in benefit of the country. Because of the recession all over the world, Pakistan was also brutally affected by.

Despite recession, some parts of banking system have progressed in few years especially the online and consumer banking as mentioned above and have shown growth. Pakistan is a developing country and needs substantial efforts to come up to the standards of the world in banking sector and for that government has to come forward and introduce the policies which will help the banking sector.