MGT604 Management of Financial Institutions Assignment No.2 Fall Semester 2013

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MGT604 Management of Financial Institutions Assignment No.2 Fall Semester 2013



Question No. 1: (15 marks)
Pakistan is a developing economy and financial institutions particularly banks play a major role in the development of such economy. The financial growth of these financial institutions is linked with the growth of the private sector in general and SME sector in particular. Commercial Banks in Pakistan are observing high growth in terms of spreads and profits but that growth is not linked to the private sector due to which private sector is not growing at the same pace. State Bank of Pakistan has taken certain steps to create a harmony between growth of these sectors (Financial, Agriculture and SME) but these efforts are not being proven fruitful. In this context, a link to an article “Convoluted Expectations” published in Dawn dated 8th January 2013 has been provided hereunder. In the article, writer Mr. Shahid Kardar has elaborated different aspects of neglected role of commercial banks as well as failure of the measures introduced by State Bank of Pakistan. You are required to read the article carefully and discuss in your own words whether you agree or disagree with the views of the writer? Provide detailed logical rationale in either case.

Question No. 2 ( 5 + 5 = 10 Marks)

Mr. Anees is an importer and wants to import some machinery from Germany for which he visits ABC Bank. Suppose you are working as Foreign Exchange Officer in the bank and Mr. Anees comes to you for opening Letter of Credit. You are required to guide Mr. Anees not only about the documents required but also about the procedure for opening letter of credit.