01. What is the meaning of commodity finance?
Ans. Commodity Finance means funding of the commodity trading. It is a type of trade finance where a company in the commodity market is funded by the investors to make maximum output and repay the loans to the investors when the exports of commodity begins. A commodity can include metals and mining (hard commodities), agriculture crops (soft commodities) and even energy.
02. Write the difference between Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR).
Ans. Cash Reserve Requirement or CRR is a regulation by the central bank (state bank) that sets the requirement for preserving a minimum amount of cash reserves in its account, whereas the Statutory Liquidity Requirement or
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A bank will provide a range of financial services to its customers according to per needs of its varying customers whereas an NBIF provides large loans to large enterprises.
4. A bank’s main interest is to handle business transactions and help its customers in providing services regarding savings or investing whereas an NBFI’s main interest is in maintaining and stabilizing the currency.
08. Based on the above analysis and reading provide at least ten suggestions for the improvement of monetary sector of Pakistan.
Ans. Suggestions for monetary policy of Pakistan:
01. Commodity financing should be safeguarded as Pakistan is a country rich in mineral and agriculture it should attract more investors willing to fund the commodity trade.
02. Allowing more interest on the commodity finance can boom the commodity market sector.
03. The CRR should be set higher as it will stabilize the banks and encourage the banking system.
04. SLR should be set higher too as it encourages growth.
05. The discount rate for banks should be set higher for smaller banks to interact easily with each other.
06. The discount rate for larger banks should be set lower as to squeeze enough profit amount to be added to the economy.
07. CAR of banks should be monitored
Seidman, L. W. (1986) Lessons of the Eighties: What does the evidence show? Retrieved July 25, 2010 from http://www.fdic.gov/bank/historical/history/vol2/panel3.pdf
-2. The background of the financial crisis.—what kind of monetary policy the federal reserve made?
6. Data Download Program, The Federal Reserve Board, 5 Aug 2009, web. 6Dec. 2009 www.federalreserve.gov/datadownload,
United States Federal Reserve. (February 11, 2014). Monetary Policy Report. Retrieved June 18, 2014, from http://www.federalreserve.gov/monetarypolicy/mpr_20140211_summary.htm
Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress
...ence of Capital Measurement and Capital Standards’, Basle Committee on Banking Supervision, vol.1, no.1, p1-28.
The industry is composed by a continuum of banks which produce a homogenous product — banking service. Domestic as well as foreign competition is violent. Not to forget the fact that ICBC has not been the first bank to embrace internet banking. So, it is all the more reason which places the bank in the most precarious position to continuously shield it self from the volleying competition.
Money supply is the availability of money in the hands of the public (economy) that can be used to purchase goods, services and securities. In macroeconomics, the price of money is equivalent to the rate of interest. There's an inverse relationship between money supply and interest rates. As money supply increases, interest will decrease. On the other hand, interest will increases as money supply decreases. It is very important to understand that the economy works at market equilibrium. There are several factors affecting money supply; and these contributing factors will be the main focus of this paper. Understanding the basic principle on money supply is imperative to have a good grasp on the macroeconomic impact of money supply on business operations.
NBB can expand and reach other countries in the GCC market not only operate in Bahrain, Riyadh and Abu Dhabi, and this expansion can increase the profits of the banks; and later they can expand globally. While SCB has the opportunity of expend globally in countries across the world, and even within one country such as Bahrain it can increase the branches to be easy to reach. In Africa, it can Agri wallet penetration as it is small and currently under cultivated and the opportunity for growth is good. Also has the opportunity to Merger with other firms and acquisite smaller institution and makes them operate under the name of
Priddy S, 2008, “Climbing out of the credit crunch”, Association of Chartered Certified Accountants, Policy Paper, India
A commodity can be broadly defined as “a physical product, natural resource, or chemical that an individual can touch, taste, smell, mine, grow, consume, or deliver” (Lind Waldock, 2011). Commodities are fungible, meaning they are considered equivalent even though they may come from different producers. Because there is little product differentiation, commodity prices are fundamentally driven by global supply and demand (S&P, 2011).
Pakistan ranks 41 in the world in factory output. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labor force. Cotton-based products account for around 61% of export earnings of Pakistan. Other major industries include fertilizer, cement, edible oil, sugar, steel, tobacco, chemicals, machinery and food processing. In 1947 at the time of partition Pakistan had a negligible industry. Pakistan got only 35 industries out of the 955 industries while the remaining where held by india. Such a small number of industries were not enough for a recently conceived nation to face the industrialized world. With the progression of time Pakistan used its all accessible assets domestic and outer for fast improvement of manufacturing sector. Pakistan has now maintained...
The study is primarily designed to find out the continuous issue of the banking system in
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.