Presented by: Irfan HameedPhD ProgramPresented to: Dr. Muzzafar Issani

What is Money?

Any object that is portable, divisible, durable and stable and that serves as a medium of exchange, a store of value and a unit of account

What is Money (Cont)Characteristics of MoneyPortabilityDivisibilityDurabilityStability

Functions of MoneyMedium of ExchangeStore of ValueUnit of Account

BARTERThe first people didn't buy goods from other people with money. They used barter. Barter is the exchange of personal possessions of value for other goods that you want. From 9,000-6,000 B.C., For example, I could ask another farmer to trade a pound of apples for a pound of bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The cowry has served as money throughout history even to the middle of this century.

First Metal Money

China, in 1,000 B.C.,They can be thought of as the original development of metal currency. In addition, tools made of metal, like knives and spades, were alsoused in China as money.

SilverAt about 500 B.C., Pieces of silver were the earliest coins.Not like Chinese coins, which relied on base metals, these new coins were composed from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather CurrencyIn 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the beginning of a kind of paper money.

Paper CurrencyFrom the ninth century to the fifteenth century A.D., in China, the first actual paper currency was used as money. Through this period the amount of currency skyrocketed causing severe inflation.

Gold Standard In 1816, England made gold a benchmark of value. This meant that the value of currency was pegged to a certain number of ounces of gold. This would help to prevent inflation of currency. The U.S. went on the gold standard in 1900.

> Representative Money> Fiat Money

Evolution Origin of BankingMoney lendersMerchantsGold smithsThe bank of Venice in 1157 followed by these banks as under:Bank of Barcelona 1401Bank of Genoa (Italy) in 1407Bank of Amsterdam in 1609

Banking

Banking History of England

During the era of King Charles James II (1660-1685), in 1694 to financially help bail out King Charles III (1689-1702).Later it became the Central bank of England, and in 1946 it was nationalized.

Banking History of the USA

In the U.S in 1791 Alexander Hamilton founded Bank of United States that was wound up in 1811. The bank was revived in 1816 only for 20 years.

Banking History of IndiaThe first Bank in the indo-Pak subcontinent came into existence in 1809.In 1935 Reserve Bank of India was established as a Central bank. Habib Bank in Bombay in 1941 and Muslims Commercial Bank in Calcutta in 1947 were founded.

Banking History of Pakistan

Pakistan, banking sectorHabib Bank in 1947 (Karachi) Muslim Commercial Bank in 1948 (Chittagong)State Bank of PakistanIn July, 1974 all commercial bank were nationalized, and in August, 1991 their privatization started. In the late 80s private sector banking was allowed. in July 1948.

Currency in Circulation

DenominationNo. in MillionsAmount in Billion (Rs.)Rs 5 261.851.309Rs 10 261.8322.618Rs 20 73.2061.464Rs 50 56.5332.827Rs 100 51.2025.12Rs 500 13.256.625Rs1000 17.23117.231Rs50002.56412.822TOTAL737.66850.016

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