STATE BANK OF PAKISTAN

Group membersAdeel ShahzadFarah GulMuhammad IrfanWagma anwar

INTRODUCTION

•Concept of central Bank

•State Bank of Pakistan

Historical Background Of SBP•Reserve bank of India

•Distribution of RBI’s reserve after independence

•Establishment of SBP

Facts and figures

Central Bank of: Pakistan

Established:1947

Headquarter s:Karachi & Islamabad

Governor: Mr. Yaseen Anwar

Structure of SBP

SBP Independence

•According to Act 1997 SBP is fully independent.

Objectives:Full employment Price stability

Core functions of SBP

Primary functions

•Issuance of notesoSbp has monoply according to act

1956oTwo departments:

Issue departmant banking dep

Cont;

oMin. amount of reserve for issue of notes is 1.2 bil (30%)

o Issue offices: located in Karachi, Peshawar, Lahore& a number of currncy chest all over the country

Primary functions

• Conduct of monitory and credit policy– Tools of formulating monitory and credit policy:

o3day repoo T-billsoOpen market operationsoCash reserve ratioo Statutory reserve ratio

Primary functions

• Regulation & Supervision of financial system:• Pakistani law has given power to SBP to monitor

financial system• SBP has issued prudential Regulation to insure

safety and soundness of banks/DFI• SBP can monitor banking activities through:

o off-site inspectionoOn-site inspection

Primary functions

• Bankers bank

• Bankers of Last resort– Provide loans and discount facility to bank– Prevent banks from liquidity– Mostly provide short term loans to meet

temporary requirements of funds.

Primary functions• Bankers to Government:

SBP provides following services to the government:– Accept cash deposits, checks and drafts by the government– Federal & provisional governments keeps their deposits

with SBP free of interest– Federal & provisional governments obtain advances from

SBP– SBP does not charge any commission– SBP purchase gold, silver, securities etc on behalf of

government.

Secondary functions

• Public debt management– SBP is responsible for public debt (act 1956)– Responsible for payment of interest to public debt– Sources– Need– objective– Securities department(1990)

Secondary functions

• Management of foreign exchange

– SBP is responsible for foreign exchange (act 1947)

– SBP prevent country currency from wide fluctuations

Secondary functions• Advisor to Government– Advise on financial and economic matters particularly on

monitory policy– Advise on loan operations– Participate in economic policy making– Monitory and fiscal policy coordination board (MFPCB)– MFPCB coordinate fiscal, monitory, trade policy &

exchange rate policy

Secondary functions

• Relationship with IFI’s

– SBP deals with IMF on behalf of Government of Pakistan

– Deals with other international financial organizations like world bank, bank of international settlement