Types of Banks

Nesar Ahmad “Yosufzai”

2015
 Types of Banks

 The banks are divided on the basis of domicile into

two categories.
1. Domestic Banks
2. Foreign Banks

 The banks are classified on the basis of ownership

into two categories.
1. Public Sector Banks
2. Private Sector Banks
 Types of Banks

 Classification of Banks on the basis of Function;

1. Commercial Banks
2. Central Bank
 Types of Banks

 1. Domestic Banks.
The banks registered and incorporated within the
country are called domestic banks. e.g Maiwand Bank,
Afghan United Bank, New Kabul Bank, Azizi Bank etc

 2. Foreign Banks
The banks which have their origin and head offices in
the foreign countries and country-branches in
Afghanistan are called foreign banks. e.g Alfalah Bank,
National Bank of Pakistan, Standard Charted Bank etc
 Types of Banks

 1. Public Sector Banks:

The banks owned and controlled by the Government
are called Public Sector Banks. e.g Milli Bank and
Pashtany Bank.

 2. Private Sector Banks:

The banks owned by corporations are called private
sector banks. e.g Maiwand Bank, Afghan United
Bank, Kabul Bank, Azizi Bank etc
 Types of Banks

 Classification of Banks on the basis of services;

– Exchange Banks
– Saving Banks
– Agricultural Banks
– Industrial Banks
– Settlement Banks
– Correspondent Banks
– Subsidiary Banks
– Custodian Banks
– Islamic Banks
– Investment Banks
 Commercial Banks

 Commercial banks are those banks which are

engaged in performing the routine duties of banking
business.

 They collect surplus money and make loans and advances

in the form of overdrafts, cash credit and mortgage loans.
 They also provide special financial services and agency
services.
 Commercial banks in short are considered the life blood of
the economic society.
 In Afghanistan Kabul Bank, Azizi bank, Habib Bank etc are
commercial Banks.
 List of Banks in Afghanistan

 Afghanistan International Bank

 Afghan United Bank
 Azizi Bank
 Afghanistan Commercial Bank
 Bakhtar Bank Private Sector Banks
 The First Micro Finance Bank
Domestic Banks
 Maiwand Bank
 Ghazanfar Bank

 Bank-E-Mili Afghan
 Pashtany Bank Public Sector Banks
 New Kabul Bank

 Arian Bank
 Habib Bank of Pakistan
 National Bank of Pakistan Foreign Banks
 Bank Alfalah Ltd
 Central Bank

 Every civilized country now has its own central bank.

 The primary function of the central bank is to regulate the flow

of money and credit in order to promote efficiency, stability and
growth in the country.

 “Da Afghanistan Bank” is the central bank of Afghanistan.

 In Pakistan “State Bank of Pakistan” is the central bank (in

England it is “Bank of England” and in America it is “The
Federal Reserve System”).
 Functions of Central Bank

1. Implementing monetary policy

2. Determining Interest rates

3. Controlling the nation's entire

money supply / Money
Issuance

4. The Government's banker and

the bankers' bank
 Functions of Central Bank

5. Managing the country's foreign

exchange and gold reserves

6. Regulating and supervising the

banking industry

7. Setting the official interest rate –

used to manage both inflation
and the country's exchange rate
 Main Functions of Da Afghanistan Bank
(Central Bank of Afghanistan 1939/1318)

 Formulate, adopt and execute the monetary policy of

Afghanistan.
 Hold and manage the official foreign exchange reserves of
Afghanistan.
 Print and issue Afghani banknotes and coins.
 Act as banker and adviser to, and as fiscal agent of the State.
 License, regulate and supervise banks, foreign exchange
dealers, money service providers, payment system operators,
securities service providers, securities transfer system operators.
 Establish, maintain and promote sound and efficient systems for
payments, for transfers of securities issued by the State or DAB,
and for the clearing and settlement of payment transactions and
transactions in such securities.
 Banking Channels

 Banks offer many different channels to access their

banking and other services:
– Branches
– ATM
– Online Banking
– Mail
– Telephone Banking
– Mobile Banking
– Video/Audio Banking
 Islamic Banking

 Islamic banks adhere to the concepts of Islamic law.

This form of banking revolves around several well-
established principles based on Islamic canons. All
banking activities must avoid interest, a concept that
is forbidden in Islam. Instead, the bank earns profit
(markup) and fees on the financing facilities that it
extends to customers.
 Brokers

 One source of deposits for banks is brokers who

deposit large sums of money on the behalf of
investors. This money will generally go to the banks
which offer the most favorable terms, often better
than those offered local depositors.

 Brokers are also working to as mediators in the

financial markets.
Q&A