UNIVERSITY OF SARGODHA

Noon Business School

Mid Term Paper (spring 2020)

Class:
B.Com(Hons) 4th S.S
Subject:
Financial and Regulatory Institution
Submitted To:
Khurram Amin
Submitted by:
MUHAMMAD FARHAN KHAN
ROLL NO.
(BCOF18E042)
 INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN

Definition:
IDBP stands for “Industrial Development Bank of Pakistan’’
This institution is the oldest development financing institution of Pakistan. This bank was
established for the small and medium size business in rural and under-developed regions of the
country.

History:
Industrial Development Bank of Pakistan was established in august 1 1961.
IDBP is government bank. 57% share of this bank owned by federal government and 36% share
by the state bank of Pakistan and 7% provisional government and others. This bank faced huge
amount of losses many times for e.g. in 2006 this bank suffers a loss of 27 Billion and become
insolvent. Due to its insolvency federal government merge many profitable corporations in 2006
to increase the financial performance of this bank. Total paid-up capital is 500 Million
Again in 2009 this bank faced a loss of 28 Billion in this regard Pakistan government take many
steps to improve its situation.

Mission:
As other banks this bank has many missions sum of them are here.

1. The first and basic mission of this bank is to provide loans for medium and long
terms investment in industrial sector.

2. It also gave financial advice to its clients in planning of industrial sector.

 3. It also gives a facility of transfer of technologies from developed countries to
Pakistan in industrial enterprises

4. Another important mission of Industrial Development Bank of Pakistan is that it

helps to develop the financial institutions.

5. It also works as scheduled bank and a dealer of foreign exchange.

6. This bank also provides a facility of merchant investment and commercial

banking services for its clients.

7. It extends term finance for investment in the manufacturing sector of economy.

Source of Funds Of IDBP:

Industrial Development Bank of Pakistan takes its source from following companies.

1. Borrows funds from federal government.

2. It Borrow funds from state bank of Pakistan.

3. It takes funds from Re-discounting of bills.

4. Its source on income is Time deposit.

5. It also issues and sales of bonds and debentures which is its main source of funds.

Functions:
The main functions of this bank are following.
 Development banking business.

1. It Provides guarantee and loans for industrial sectors of Pakistan.

2. It also Provides medium- and long-term finances.

 Commercial banking business

1. Also provides a facility of bills deposit.

2. Also provides a facility of foreign exchange.

3. Also provides the facility of remittances for our foreign community.

4. Also provides short time advance for their customer.

 Merchant Banking Business.

1. It gives its customers a facility of bridge financing.

2. Customers can also get the facility of leasing.

3. Its function is to understand the public issues of share.

 Collection of utility Bills:

Industrial Development Bank of Pakistan provides an opportunity to pay bills of

different utilities at all branches.
 World bank
s

Definition of world bank:

World bank is an international financial institution that provides loans to the developing country.

Sub Institutions of World bank:

 International Bank for reconstruction and development:

  International development Associations

History of World Bank:

The U.s secretory of the treasury address the delegates to the Bretton
woods monetary conference July 8,1944 New Hampshire the world bank initial.
First aim of world bank at the time of construction is to help European countries that destroyed
during world war 2.
World bank gave his first loan to France in 1947 for post war reconstruction

1n 1950 to 1960 world bank funding most for infrastructure project such as, irrigation system,
dams, Electrical grids, and roads was basic primary focus.

The world bank provides technical resources and training necessary to use the bank loan
effectively.

In 1970 the focus of world bank is to reduce poverty in the world.

In this regards such projects design through which poverty can be reduce like food production,
rural development, health and nutrition were design.

In 1980 world bank diverted his focus to issues of social development such as social life
education cultural heritage and good governance.

Forever the seventy years of history of world bank this bank plays a vital role as a financial
institution to reduce poverty and also help the poor countries to developed their economy.

How world bank funded

World bank are funded through several ways.
 Financial markets
  From their investment

 Fees paid by the members countries

 Interest paid by the borrows country.

Organizations of world bank

There are five organization of world bank.

 International bank for reconstruction and development (IBRD)

 International development association (IDA)

 The international development finance corporation (IFC)

 Multilateral investment guarantee agency (MIGA)

 International center for settlement of investment disputes (ICSID)

Function of world bank

The are several function of world banks same of them are as follow.

1. Poverty Reduction
From now the basic function of world bank is to reduce poverty from all over the
world.
In this regard world bank moves many project like food production, rural
development
 2. Economic advice
Other function of world bank is giving advice to developing countries how they

improve their economic condition. In this regard world bank at the time of

giving economic package also advice to the countries to decrease the budget

deficit and trade deficit.

3. Provide loan.
Other important function of world bank is to provide loan to the poor countries to

improve their economic condition in this respect world bank gave loan and help the por

countries

Operations of world bank

1. Fund generation

2. Loans

3. Grants

4. Analytical and advisory services

5. Capacity building

Fund generation
1. IBRD lending to developing countries is financed by selling AAA-rated bonds
2.
 3. IDA is the world largest source of interest free loans and grant assistance to the poorest
countries

Loans
1. Investment loans

2. Development policy loans

3. World bank treasury

Grants
1. Relive the debt burden of heavily indebted poor countries

2. Improve sanitation and water supplies

3. Support vaccination and immunization programs to reduce the incidence of

communicable disease

Analytical and advisory services

1. Poverty assessments

2. Public expenditure reviews

3. Country economic memoranda

4. Social and structural reviews

5. Sector reports

6. Topic in development
 Capacity building

1. Advisory services and ask us

2. Global development learning network

Need of world bank

1. Build capacity

2. Create infrastructure

3. Development

4. Combat corruption

World bank top borrowers

1. Mexico

2. Brazil

3. Turkey

4. Pakistan

5. China

6. India
 INTERNATIONAL MONETARY FUND

International Monetary Fund is an international organization. Its Headquarter is in

Washington, D.C. USA. IMF consisting of 189 countries working to encourage the
development of global monetary cooperation, secure financial stability, facilitate
international trade, promote high number employment in the members countries and
stable economic growth of developing nations, and reduce poverty in the world.

History Of IMF:
The establishment of International Monetary Fund was an amazing success in the history of
international monetary cooperation.

After First World War, commercial rivalry was rising among the powerful countries of the
world. Representatives of 44 countries participated in a conference. As a result, the International
Monetary Fund created in December 1945 with the sole purpose of promoting the international
economic stability by encouraging the stable growth in the economy of the member countries.

International Monetary Fund started its working from First March 1947. The motto with which
IMF was established is to increase international debt paying ability of the member countries to
make the balance of payment. Thus, the Fund is a part of central bank resources and national
currencies which were made available to funding member nations under certain conditions and
rules.

IMF was established to reduce all trade restrictions and obstruction and further to promote
multilateral trade. Thus, the Fund is the most careful attempt to organize the conduct of
international monetary affairs.

Functions of IMF:

International Monetary Fund, main functions of the IMF are described below:

 International Monetary Co-operation:

The main objective of this Fund is to organize a monetary co-operation amongst

the various member countries of the world. IMF will provide the machinery for
consultation and collaboration on international monetary problems. During the
Second World War, IMF had played a very important role to encourage the
monetary co-operation amongst the different countries of the World.

  Growth of International Trade:

IMF is useful to encourage the international trade by removing all obstacles and
difficulties which had created unnecessarily restrictions between the countries. In
this way, an important role has been assigned to IMF to increase the growth of
international trade by maintaining equilibrium in the balance of payment.

 Balanced Economic Growth:

 IMF helps its member countries to achieve the balance in economic growth. It
facilitates the increase of balanced growth by the promotion and maintenance of
high level of employment as the basic purpose of economic policy. For this
purpose, the IMF helps the member countries to make full use of their natural
resources and to put them into a productive channel.

 To Promote Exchange Stability:

Before the Second World War, huge instability was increasing in the foreign
exchange rates of various countries which had badly affected the international
trade on that time. Thus, IMF has the purpose to promote exchange stability and
to avoid the bad effects of war on the exchange rates in the world.

 Expansion of Capital Investment in Under-develop Countries:

IMF provides help to import goods from the rich countries having high economic
growth to the poor countries so that the poor or underdeveloped country get a
chance to increase their capital investment on productive activities. Which in turn
helps them to improve standard of living and to achieve prosperity and increase
the living resources among member countries.

 Generating of Higher Employment and Income:

IMF helps its member countries to increase the trade with the significant measures
of multilateral trade and balanced economic growth and having good resources.
This in turn generate employment and income in poor and under developing
countries.
  Help during Emergency:

The fund will provide short-term monetary help to its member countries during
any type of emergency such as now Covid-19 and like floods and pandemics and
having badly effected by the corruption.

Membership:

The IMF has two types of members as shown below:

 Original Members and

 Ordinary Members

All those countries which took part in Bretton Woods Conference and who agreed to be the
member of the Fund prior to 31 December 1945, are called the original members of the Fund. All
those who become its member subsequently are called ordinary members.

However, any other country can cease to be its member after giving a notice in writing to that
effect. IMF can also terminate the membership of such a country as does not accept its rules and
regulations. In 1947 the number of member-countries was 40 now, there are 180 countries as
members of IMF.

IMF has two bodies of management:

 The Board of Governors.
 The Board of Directors.
Each member country appoints one Governor to participate in the meeting of the Board of
Governors. The Board of Governors make the general policy to carry on day to day working of
IMF. The Board of Directors of the IMF holds the meeting at the office in Washington USA.
One of these Directors is designated on the Managing Director of IMF. He is the chief executive.

House Building and Finance Company

Definition
House building finance company limited, before known as house building
finance corporation is a Pakistan state housing compony that gives loans to make house on low
interest.

HISTORY
House Building Finance Company Limited previously known as House Building Finance
Corporation is a Pakistani  finance company which is alternative of state bank of Pakistan
House Building Finance Company Limited is the only housing finance institution in Pakistan
established in 1952 to provide housing finance to low and low-middle income citizens. HBFC
provides financing facilities for construction and purchase of house or apartment through its deep
rooted and national footprint of 51 branches, 3 regional offices, 7 area offices and the head office
based in Karachi. State Bank of Pakistan and Ministry of Finance jointly hold shares of HBFC

Commercial banks play a important role in fulfilling the short term and medium term financial
needs of industries. They do not provide long term credit so that liquidity of assets should be
maintained. The fund of these banks belongs to the general public and are retaken at a short
notice therefore commercial banks prefers to give credit for a some short period of time backed
by tangible and very easily marketable securities. Commercial banks while providing loans to
businesses consider various terms and factors, such as nature and size of business, financial
status and profitability of the business, and its ability to repay loans.

PURPOSE
1. It provides for purchase of flat / house or purchase of plot of land

2. For repair of an existing house

3. For extending an existing house

4. Short term bridge making finance while purchasing another house and plots.

Quantum

1. The quantum pf loans varies from bank to bank normally bank stipulate minimum of 1 lakh
 2. The maximum would depend on the bank and it could vary from Rs.10 lakhs to Rs.2 crores or
more

3. For repairs the amount is less i.e around Rs.10 lakhs

Scope
1. Basic information about Pakistan

2. Position of housing sector in Pakistan

3. Demand and market segmentation of housing sector

4. Problems in housing sector development

5. Evolution of housing finance

6. Requirements for low income housing

Functions
1. ISO certification

2. Management

3. Treasury management

4. Policy and planning

5. Risk management

6. Balance sheet management

 7. System and compliance

Major scheme
Ghar Asaan Flex is the major housing finance product for the masses. It offers financing up to
PKR 25 million in major cities and PKR 10 million in other cities for a period of up to 20 years.
It is based on Diminishing Musharka mode of financing at variable rates.it is the best scheme in
Pakistan many people avail benefit to this scheme. Its help the poor people