Munich Personal RePEc Archive

Comparison of Products & Services Offered by Local and Foreign Banks in Pakistan

Arshad, Muhammad Nadeem (2006): Comparison of Products & Services Offered by Local and Foreign Banks in Pakistan.

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In the last decade, information technology has proven to be the major enabler that has helped foreign and local banks in Pakistan to integrate their domestic and worldwide operations. International banks operating in the region are rushing to put in place IT systems that will give them considerable advantages over their local competitors. Diversity in payment systems, customer demand for electronic services and Straight Through Processing (STP) combined with widespread industry consolidation is creating huge challenges for banks. My preferred methodology is to compare the products and services offered by foreign and local banks in Pakistan, by just analyzing the criteria of their offerings. I have performed a comparison between four type of products and services to compare the efficiency of foreign and local banks. And with these comparison the efficiency and productivity of foreign banks is high. Foreign banks were found to be more efficient than the local banks. Loan portfolio, higher productivity, high customer loyalty and market power have the largest impact on efficiency and productivity. With rapid change in technology there is more competition between foreign and local banks for their survival and to meet the expectations of the consumers. This study seeks to investigate the current scenario of banking sector in Pakistan.

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