Core Functions of State Bank of Pakistan

State Bank of Pakistan is the Central Bank of the country. While its constitution, as originally laid down in the State Bank
of Pakistan Order 1948, remained basically unchanged until 1st January 1974 when the Bank was nationalised, the scope
of its functions was considerably enlarged. The State Bank of Pakistan Act 1956, with subsequent amendments, forms the
basis of its operations today.

Under the State Bank of Pakistan Order 1948, the Bank was charged with the duty to "regulate the issue of Bank notes
and keeping of reserves with a view to securing monetary stability in Pakistan and generally to operate the currency and
credit system of the country to its advantage". The scope of the Bank’s operations was considerably widened in the State
Bank of Pakistan Act 1956, which required the Bank to "regulate the monetary and credit system of Pakistan and to foster
its growth in the best national interest with a view to securing monetary stability and fuller utilisation of the country’s
productive resources". Under financial sector reforms, the State Bank of Pakistan was granted autonomy in February 1994.
On 21st January, 1997, this autonomy was further strengthened by issuing three Amendment Ordinances (which were
approved by the Parliament in May, 1997) namely, State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962
and Banks Nationalisation Act, 1974. The changes in the State Bank Act gave full and exclusive authority to the State Bank
to regulate the banking sector, to conduct an independent monetary policy and to set limit on government borrowings from
the State Bank of Pakistan. The amendments in Banks Nationalisation Act abolished the Pakistan Banking Council (an
institution established to look after the affairs of NCBs) and institutionalised the process of appointment of the Chief
Executives and Boards of the nationalised commercial banks (NCBs) and development finance institutions (DFIs), with the
Sate Bank having a role in their appointment and removal. The amendments also increased the autonomy and
accountability of the Chief Executives and the Boards of Directors of banks and DFIs.

Like a Central Bank in any developing country, State Bank of Pakistan performs both the traditional and developmental
functions to achieve macro-economic goals. The traditional functions, which are generally performed by central banks
almost all over the world, may be classified into two groups: (a) the primary functions including issue of notes, regulation
and supervision of the financial system, bankers’ bank, lender of the last resort, banker to Government, and conduct of
monetary policy, and (b) the secondary functions including the agency functions like management of public debt,
management of foreign exchange, etc., and other functions like advising the government on policy matters and
maintaining close relationships with international financial institutions. The non-traditional or promotional functions,
performed by the State Bank include development of financial framework, institutionalisation of savings and investment,
provision of training facilities to bankers, and provision of credit to priority sectors. The State Bank also has been playing
an active part in the process of islamization of the banking system. The main functions and responsibilities of the State
Bank can be broadly categorised as under.

REGULATION OF LIQUIDITY

Being the Central Bank of the country, State Bank of Pakistan has been entrusted with the responsibility to formulate and
conduct monetary and credit policy in a manner consistent with the Government’s targets for growth and inflation and the
recommendations of the Monetary and Fiscal Policies Co-ordination Board with respect to macro-economic policy
objectives. The basic objective underlying its functions is two-fold i.e. the maintenance of monetary stability, thereby
leading towards the stability in the domestic prices, as well as the promotion of economic growth.

To regulate the volume and the direction of flow of credit to different uses and sectors, the Bank makes use of both direct
and indirect instruments of monetary management. Until recently, the monetary and credit scenario was characterised by
acute segmentation of credit markets with all the attendant distortions. Pakistan embarked upon a program of financial
sector reforms in the late 1980s. A number of fundamental changes have since been made in the conduct of monetary
management which essentially marked a departure from administrative controls and quantitative restrictions to market-
based monetary management. A reserve money management programme has been developed. In terms of the
programme, the intermediate target of M2 would be achieved by observing the desired path of reserve money - the
operating target. While use in now being made of such indirect instruments of control as cash reserve ratio and liquidity
ratio, the program’s reliance is mainly on open market operations.

ENSURING THE SOUNDNESS OF FINANCIAL SYSTEM: REGULATION AND SUPERVISION

One of the fundamental responsibilities of the State Bank is regulation and supervision of the financial system to ensure its
soundness and stability as well as to protect the interests of depositors. The rapid advancement in information technology,
together with growing complexities of modern banking operations, has made the supervisory role more difficult and
challenging. The institutional complexity is increasing, technical sophistication is improving and technical base of banking
activities is expanding. All this requires the State Bank for endeavoring hard to keep pace with the fast-changing financial
landscape of the country. Accordingly, the out dated inspection techniques have been replaced with the new ones to have
better inspection and supervision of the financial institutions. The banking activities are now being monitored through a
system of ‘off-site’ surveillance and ‘on-site’ inspection and supervision. Off-site surveillance is conducted by the State
Bank through regular checking of various returns regularly received from the different banks. On other hand, on-site
inspection is undertaken by the State Bank in the premises of the concerned banks when required.
To deepen and broaden financial markets as also to diversify the sources of credit, a number of non-bank financial
institutions (NBFIs) were allowed to increase substantially. The State Bank has also been charged with the responsibilities
of regulating and supervising of such institutions. To regulate and supervise the activities of these institutions, a new
Department namely, NBFIs Regulation and Supervision Department was set up. Moreover, in order to safeguard the
interest of ultimate users of the financial services, and to ensure the viability of institutions providing these services, the
State Bank has issued a comprehensive set of Prudential Regulations (for commercial banks) and Rules of Business (for
NBFIs).

The "Prudential Regulations" for banks, besides providing for credit and risk exposure limits, prescribe guide lines relating
to classification of short-term and long-term loan facilities, set criteria for management, prohibit criminal use of banking
channels for the purpose of money laundering and other unlawful activities, lay down rules for the payment of dividends,
direct banks to refrain from window dressing and prohibit them to extend fresh laon to defaulters of old loans. The existing
format of balance sheet and profit-and-loss account has been changed to conform to international standards, ensuring
adequate transparency of operations. Revised capital requirements, envisaging minimum paid up capital of Rs.500 million
have been enforced. Effective December,1997, every bank was required to maintain capital and unencumbered general
reserves equivalent to 8 per cent of its risk weighted assets.

The "Rules of Business" for NBFIs became effective since the day NBFIs came under State Bank’s jurisdiction. As from
January, 1997, modarbas and leasing companies, which are also specialized type of NBFIs, are being regulated/supervised
by the Securities and Exchange Commission (SECP), rather than the State Bank of Pakistan.

EXCHANGE RATE MANAGEMENT AND BALANCE OF PAYMENTS

One of the major responsibilities of the State Bank is the maintenance of external value of the currency. In this regard, the
Bank is required, among other measures taken by it, to regulate foreign exchange reserves of the country in line with the
stipulations of the Foreign Exchange Act 1947. As an agent to the Government, the Bank has been authorised to purchase
and sale gold, silver or approved foreign exchange and transactions of Special Drawing Rights with the International
Monetary Fund under sub-sections 13(a) and 13(f) of Section 17 of the State Bank of Pakistan Act, 1956.

The Bank is responsible to keep the exchange rate of the rupee at an appropriate level and prevent it from wide
fluctuations in order to maintain competitiveness of our exports and maintain stability in the foreign exchange market. To
achieve the objective, various exchange policies have been adopted from time to time keeping in view the prevailing
circumstances. Pak-rupee remained linked to Pound Sterling till September, 1971 and subsequently to U.S. Dollar.
However, it was decided to adopt the managed floating exchange rate system w.e.f. January 8, 1982 under which the
value of the rupee was determined on daily basis, with reference to a basket of currencies of Pakistan’s major trading
partners and competitors. Adjustments were made in its value as and when the circumstances so warranted. During the
course of time, an important development took place when Pakistan accepted obligations of Article-VIII, Section 2, 3 and 4
of the IMF Articles of Agreement, thereby making the Pak-rupee convertible for current international transactions with
effect from July 1, 1994.

After nuclear detonation by Pakistan in 1998, a two-tier exchange rate system was introduced w.e.f. 22nd July 1998, with
a view to reduce the pressure on official reserves and prevent the economy to some extent from adverse implications of
sanctions imposed on Pakistan. However, effective 19th May 1999, the exchange rate has been unified, with the
introduction of market-based floating exchange rate system, under which the exchange rate is determined by the demand
and supply positions in the foreign exchange market. The surrender requirement of foreign exchange receipts on account
of exports and services, previously required to be made to State Bank through authorized dealers, has now been done
away with and the commercial banks and other authorised dealers have been made free to hold and undertake transaction
in foreign currencies.

As the custodian of country’s external reserves, the State Bank is also responsible for the management of the foreign
exchange reserves. The task is being performed by an Investment Committee which, after taking into consideration the
overall level of reserves, maturities and payment obligations, takes decision to make investment of surplus funds in such a
manner that ensures liquidity of funds as well as maximises the earnings. These reserves are also being used for
intervention in the foreign exchange market. For this purpose, a Foreign Exchange Dealing Room has been set up at the
Central Directorate of State Bank of Pakistan and services of a ‘Forex Expert’ have been acquired.

DEVELOPMENTAL ROLE OF STATE BANK

The responsibility of a Central Bank in a developing country goes well beyond the regulatory duties of managing the
monetary policy in order to achieve the macro-economic goals. This role covers not only the development of important
components of monetary and capital markets but also to assist the process of economic growth and promote the fuller
utilisation of a country’s resources.
Ever since its establishment, the State Bank of Pakistan, besides discharging its traditional functions of regulating money
and credit, has played an active developmental role to promote the realisation of macro-economic goals. The explicit
recognition of the promotional role of the Central Bank evidently stems from a desire to re-orientate all policies towards
the goal of rapid economic growth. Accordingly, the orthodox central banking functions have been combined by the State
Bank with a well-recognised developmental role.

The scope of Bank’s operations has been widened considerably by including the economic growth objective in its statute
under the State Bank of Pakistan Act 1956. The Bank’s participation in the development process has been in the form of
rehabilitation of banking system in Pakistan, development of new financial institutions and debt instruments in order to
promote financial intermediation, establishment of Development Financial Institutions (DFIs), directing the use of credit
according to selected development priorities, providing subsidised credit, and development of the capital market.

SBP role vital for country's economic

development
KARACHI - The State Bank of Pakistan, since its inception, has been making relentless efforts
with sincerity and honesty for the development of the country’s economy. The banking
industry has made significant progress in recent years and the State Bank has taken a number of
measures ensuring that people at large reap the benefits of economic growth, sustainability of
growth momentum and competitive environment.
This was stated by SBP Governor Dr Shamshad Akhtar while speaking at the flag hoisting
ceremony held at the State bank of Pakistan to mark the 61st independence day. She said that the
Independence Day provides the nation with an opportunity to reiterate our commitment with our
homeland.
Dr Akhtar said that despite several problems, Pakistan as a country has come a long way since
achieving Independence in 1947. She highlighted various unique features and achievements of
the country and said that “we all are proud to be Pakistani”.
SBP governor said being a leader of a national institution; she must admit that there are several
impediments in our way to progress. “Partly we are also responsible for that as we have not
aligned ourselves with the requirements of the21 century,” she added. We have yet to achieve
self-reliance in all sectors, which is a hallmark of sovereign and vibrant nation,” she
emphasized.
Paying rich tribute to the forefathers of the nation, Dr. Akhtar said that this day reminds us of our
elders, who under the dynamic leadership of Quaid-e- Azam Muhammad Ali Jinnah, sacrificed
their lives and as a result of their unparalleled efforts, Pakistan was created. She paid glowing
tribute to the national heroes and tens of thousands of unsung martyrs, who played a key role in
the independence of the country.
The ceremony was attended, among others, by Mr.Mansur-ur-Rehman Khan and Mr. Yaseen
Anwar, Deputy Governors, senior executives, directors, officers and staff of the Bank besides
families of the Bank employees.
State Bank of Pakistan
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State Bank of Pakistan

‫بینک دولت پاکستان‬

State Bank of Pakistan

Headquarters Karachi, Pakistan

Established 1948

Central bank of Pakistan

Currency Pakistani rupee

ISO 4217 Code PKR

Website www.sbp.org.pk

The State Bank of Pakistan (SBP) (Urdu: ‫ )بینک دولت پاکستان‬is the central bank of Pakistan.
While its constitution, as originally laid down in the State Bank of Pakistan Order 1948,
remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope
of its functions was considerably enlarged. The State Bank of Pakistan Act 1956, with
subsequent amendments, forms the basis of its operations today. The headquarters are located in
the financial capital of Pakistan, Karachi with its second headquarters in the capital, Islamabad.


[edit] History

Before independence on 14 August 1947, during British colonial regime the Reserve Bank of
India was the central bank for both India and Pakistan. On 30 December 1948 the British
Government's commission distributed the Reserve Bank of India's reserves between Pakistan and
India -30 percent (750 M gold) for Pakistan and 70 percent for India.

The losses incurred in the transition to independence were taken from Pakistan's share (a total of
230 million). In May, 1948 Muhammad Ali Jinnah (Founder of Pakistan) took steps to establish
the State Bank of Pakistan immediately. These were implemented in June 1948, and the State
Bank of Pakistan commenced operation on July 1, 1948

Under the State Bank of Pakistan Order 1948, the state bank of Pakistan was charged with the
duty to "regulate the issue of bank notes and keeping of reserves with a view to securing
monetary stability in Pakistan and generally to operate the currency and credit system of the
country to its advantage".

A large section of the state bank's duties were widened when the State Bank of Pakistan Act
1956 was introduced. It required the state bank to "regulate the monetary and credit system of
Pakistan and to foster its growth in the best national interest with a view to securing monetary
stability and fuller utilisation of the country’s productive resources". In February 1994, the State
Bank was given full autonomy, during the financial sector reforms.

On January 21, 1997, this autonomy was further strengthened when the government issued three
Amendment Ordinances (which were approved by the Parliament in May 1997). Those included
were the State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962 and Banks
Nationalisation Act, 1974. These changes gave full and exclusive authority to the State Bank to
regulate the banking sector, to conduct an independent monetary policy and to set limit on
government borrowings from the State Bank of Pakistan. The amendments to the Banks
Nationalisation Act brought the end of the Pakistan Banking Council (an institution established
to look after the affairs of NCBs) and allowed the jobs of the council to be appointed to the Chief
Executives, Boards of the Nationalised Commercial Banks (NCBs) and Development Finance
Institutions (DFIs). The State Bank having a role in their appointment and removal. The
amendments also increased the autonomy and accountability of the chief executives, the Boards
of Directors of banks and DFIs.

The State Bank of Pakistan also performs both the traditional and developmental functions to
achieve macroeconomic goals. The traditional functions, may be classified into two groups:

1. The primary functions including issue of notes, regulation and supervision of the financial
system, bankers’ bank, lender of the last resort, banker to Government, and conduct of
monetary policy.
 2. The secondary functions including the agency functions like management of public debt,
management of foreign exchange, etc., and other functions like advising the government on
policy matters and maintaining close relationships with international financial institutions.

The non-traditional or promotional functions, performed by the State Bank include development
of financial framework, institutionalisation of savings and investment, provision of training
facilities to bankers, and provision of credit to priority sectors. The State Bank also has been
playing an active part in the process of islamisation of the banking system.

[edit] Regulation of liquidity

The State Bank of Pakistan has also been entrusted with the responsibility to carry out monetary
and credit policy in accordance with Government targets for growth and inflation with the
recommendations of the Monetary and Fiscal Policies Co-ordination Board without trying to
effect the macroeconomic policy objectives.

The state bank also regulates the volume and the direction of flow of credit to different uses and
sectors, the state bank makes use of both direct and indirect instruments of monetary
management. During the 1980s, Pakistan embarked upon a program of financial sector reforms,
which lead to a number of fundamental changes. Due to these changed the conduct of monetary
management which brought about changes to the administrative controls and quantitative
restrictions to market based monetary management. A reserve money management programme
has been developed, for intermediate target of M2, that would be achieved by observing the
desired path of reserve money - the operating target.

State Bank of Pakistan has changed the format and designs of many bank notes which are
currently in circulation in Pakistan. These steps were taken to overcome the problems of
fraudulent activities.

[edit] Banking

The State Bank of Pakistan looks into a lot of different ranges of banking to deal with the
changes in economic climate and different purchasing and buying powers. Here are some of the
banking areas that the state bank looks into;

 State Bank’s Shariah Board Approves Essentials and Model Agreements for Islamic Modes of
Financing
 Procedure For Submitting Claims With Sbp In Respect of Unclaimed Deposits Surrendered By
Banks/Dfis.

 Banking Sector Supervision in Pakistan

 Micro Finance

 Small Medium Enterprises (SMEs)

 Minimum Capital Requirements for Banks

  Remittance Facilities in Pakistan

 Opening of Foreign Currency Accounts with Banks in Pakistan under new scheme.

 Handbok of Corporate Governance

 Guidelines on Risk Management

 Guidelines on Commercial Paper

 Guidelines on Securitization

 SBP.Scheme for Agricultural Financing

[edit] Bank assets and liabilities

This is a chart of trend of major assets and liabilities reported by scheduled commercial banks to
the State Bank of Pakistan with figures in millions of Pakistani Rupees.[1][2][3]

Year Deposits Advances Investments

2002 1,466,019 932,059 559,542

2006 2,806,645 2,189,368 799,285

[edit] Departments
 Agriculture credit
 Audit

 Banking Inspection

 Banking Policy & Regulations

 Banking Supervision

 Corporate Services

 Economic Analysis

 Financial Monitoring Unit

 Monetary Policy

 Research

 Statistics and Data Warehouse

 Exchange Policy

 Human Resource
  Information Systems & Technology

 Islamic Banking

 Legal Services

 Library

 Payment System

 Real Time Gross Settlement System (RTGS System)

 Small and Medium Enterprises

 Training and Development Department (TDD)

 Treasury Operations

 Strategic & Corporate Planning

 Microfinance

 Pakistan Remittance Initiative

[edit] Governor

The principal officer of the SBP is the Governor. The current Governor of State Bank of
Pakistan is Mr. Shahid Hafiz Kardar.

[edit] Central Board of Directors

1. kamran laghari Kardar, Chairman
2. The Secretary Finance Member (Presently Mr. Salman Siddique)

3. Mr. Kamrani Y. Mirza Member

4. Mr. Zaffar A. Khan Member

5. Mr. Tariq Sayeed Saigol Member (retired, position presently vacant)

6. Mirza Qamar Beg Member

7. Mr. Asad Umar Member

8. Mr. Waqar A. Malik Member

9. Mr. nwab srajudolla

The State Bank of Pakistan and Its Functions

The State Bank of Pakistan (SBP) is the central bank of Pakistan. While its constitution, as originally laid
down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974,
when the bank was nationalized, the scope of its functions was considerably enlarged. The State Bank of
Pakistan Act 1956, with subsequent amendments, forms the basis of its operations today. The
headquarters are located in the financial capital of Pakistan, Karachi with its second headquarters in the
capital, Islamabad.

Organizational Structure

Governor is the head of the State Bank of Pakistan (SBP) and has two Deputy Governors, one each for
Banking and Corporate Services. There is one Chief Economist in charge of Banking Regulations.

Central Board of Directors

Consists of 9 directors. One of them acts as the Corporate Secretary. The Governor of the State Bank
presides as its Chairman.

Measuring the Money Supply by State Bank of Pakistan

M-2, the broader measure, is expected to increase by 20 percent in the year 2007 - 2008

Narrow measure of Money:

Narrow measure of Money: M-!

Demand deposits at scheduled banks = 75 percent

Currency in circulation = 23 percent

Other deposits = 2 percent

The broader measure of money: M-2

M-1 = 86 percent

Time deposits at scheduled banks = 9 percent

Deposits at resident foreign banks = 5 percent

Functions of the State Bank of Pakistan

1. Banker to the Government: As banker to the government, SBP:

a. Receives deposits (taxes, fees, fines, etc.) on behalf of the federal government.

b. Disburses payments (tax refunds, interest, etc.) on behalf of the federal government.
 c. Manages the national debt—buys, sells, and cashes government securities and pay interest/profit
on them.

d. Lends money to the federal government as needed.

2. Banker to Banks: As banker to the scheduled banks, SBP:

a. Holds deposits made by them as a part of their required reserves—5% at this time.

b. Lends them funds as a “lender of the last resort” to meet their pressing needs by discounting their
bills of exchange and other

3. Acts as a Clearing House:

Provides facilities, physical and/or electronic, to scheduled banks to clear cheques and other claims
drawn against each other—deposited by their customers for collection--by adding up what they owe or
owed them and transfer funds from their accounts at SBP.

4.Supervisor of Banks and other Financial Institutions:

One of the fundamental responsibilities of the State Bank is regulation and supervision of the financial
system to ensure its soundness and stability as well as to protect the interests of depositors. The
banking activities are now being monitored through a system of ‘off-site’ surveillance and ‘on-site’
inspection and supervision. Off-site surveillance is conducted through regular checking of various
returns regularly received from the different banks. On other hand, on-site inspection is undertaken by
the State Bank in the premises of the concerned banks when required.

To broaden financial markets as also to diversify the sources of credit, a number of non-bank financial
institutions were allowed to increase substantially. The State Bank has also been charged with the
responsibilities of regulating and supervising of such institutions.
5. Issuer of Paper Currency:

State Bank has the sole authority to issue paper notes. It has the prime responsibility to control its
supply in order to ensure a stable price of money, i.e., its value or purchasing power. Its notes,
however, are not convertible into gold or silver.

6. Exchange Rate Management and Balance of Payment:

The Bank is responsible to keep the exchange rate of the rupee at an appropriate level and prevent it
from wide fluctuations in order to maintain competitiveness of our exports and maintain stability in the
foreign exchange market. As the custodian of country’s external reserves, it is responsible for
management of the foreign exchange reserves.

7. Developmental Role of SBP:

The Bank’s participation in the development process has been widened in the form of rehabilitation
of banking system, development of new financial institutions and debt instruments in order to promote
financial intermediation, establishment of Development Financial Institutions, directing the use of credit
according to selected development priorities, providing subsidized credit, and development of the
capital market.

8. Non-traditional Role: The non-traditional or promotional functions, performed by the State Bank
include development of financial framework, institutionalization of savings and investment, provision of
training facilities to bankers, and provision of credit to priority sectors. The State Bank also has been
playing an active part in the process of Islamization of the banking system.

9. To Formulate and Implement the Monetary Policy: The Bank is also in charge of conducting monetary
policy which means changing the supply of money in the economy. The tools of the monetary policy
are:
a. Changing the monetary base: This directly changes the total amount of money circulating in the
economy. The State Bank can use open market operations to change the monetary base. The Bank
would buy/sell bonds in exchange for hard currency. When the central bank sells government bonds it
receives hard currency in payment, thus reducing the money supply. It buys government bonds and pays
hard cash to the sellers, thus, increasing the money supply.

b. Changing the reserve requirements: Monetary policy can be implemented by changing the
proportion of total assets that banks must hold in reserve with SBP. Banks only maintain a small portion
of their assets as cash available for immediate withdrawal; the rest is invested in illiquid assets like
mortgages and loans. By changing the proportion of total assets to be held as liquid cash, the SBP
changes the availability of loanable funds. This acts as a change in the money supply.

c. Changing the discount rate: Banks borrow money from the State Bank by cashing or discounting
credit instruments, such as bills of exchange. By raising the discount rate SBP discourages banks to
borrow money. If and when the goal is to increase the money supply, the Bank lowers its discount rate
to encourage borrowing by the banks and, thus, helps increasing the money supply.

Also by calling in existing loans or extending new loans, the monetary authority can directly change the
size of the money supply.

Affecting a change in nominal interest rates: The contraction of the monetary supply can be achieved
indirectly by increasing or decreasing the nominal interest rates. By changing the Discount Rate and by
conducting Open Market Operations a change in money supply would affect the nominal interest rates.
A tight money supply tends to increase nominal interest rates while an increase in money supply can
help bring down the interest rates. A change in the nominal interest rates influences the overall
economic activity, rate of inflation, GDP, and economic growth.

What Is The Role Of State Bank OF Pakistan In Economic Development?

Answer: The State dune was established on July 1, 1948. Since its establishment besides performing its
traditional functions, it is undertaking a number of developmental and promotional functions in the best
interest of the country. These functions contained by the past were regarded outside the purview of the
centralized bank. The main developmental and promotional functions in brief are as
underneath:Traditional functions: The state bank of Pakistan was originally established to perform the
traditional functions of main bank of a country, monopoly of note issue, acting as a banker to the
elected representatives, controller of credit, functioning lender of the last resorts.

Building up a sound banking system: For nippy economic development of a country the building up a
sound financial system is prerequisite. The State Bank of Pakistan immediately after its establishment in
1948 took up this task. The start be made with establishment of national bank of Pakistan. Since then
the total number of domestic planned banks has increased to eight thousand. These banks are playing a
prominent role surrounded by the mobilization of savings in rural and urban areas of the country.

Credit targets: The State Bank of Pakistan give targets to commercial banks for providing loans in the
grazing land of agriculture, industry, housing every year. The prescribing of credit targets for these
priority sectors has greatly help in raising productions.

State Bank of Pakistan is central bank of Pakistan. Its boss quarters are located in Karachi and Islamabad.

State Bank of Pakistan plays a very significant role in the economic development of Pakistan. It is
responsible for carrying out the monetary and credit policy of the governing body. It regulates the
volume and direction of credit flow to different users and sectors. Apart from these activities it is also
involved in

* Banking Sector Supervision surrounded by Pakistan

* Micro Finance

* Remittance Facilities in Pakistan

* Opening of Foreign Currency Accounts with Banks in Pakistan underneath new

scheme.

* Handbook of Corporate Governance

* Guidelines on Risk Management

 * Guidelines on Commercial Paper

* Guidelines on Securitization

* SBP.Scheme for Agricultural Financing

* State Bank’s Shariah Board Approves Essentials and Model Agreements for

Islamic Modes of Financing

* Procedure For Submitting Claims With Sbp In Respect of Unclaimed Deposits

Surrendered By Banks/Dfis.

* Banking Sector Supervision in Pakistan

State bank can play a very important role contained by the economic development of Pakistan because
it is responsible for conducting monetary policy in Pakistan. Monetary policy controls money supply and
also determines price smooth. This inflation control can impact employment in Pakistan and hence it
impacts the economic growth surrounded by the country. Economic development of Pakistan is also
possible because state bank also maintains the stability of the national currency and improve trade
balance by impacting positively on exports.

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What Is The Role Of State Bank OF Pakistan In Economic

Development?
Send checks in any currency to payees around the world.

State bank can play a very important role in the economic development of Pakistan because it is
responsible for conducting monetary policy in Pakistan. Monetary policy controls money supply
and also determines price level. This inflation control can impact employment in Pakistan and
hence it impacts the economic growth in the country. Economic development of Pakistan is also
possible because state bank also maintains the stability of the national currency and improves
trade balance by impacting positively on exports.

Independent Evaluation Group (IEG) Download World Bank reports

State Bank of Pakistan is central bank of Pakistan. Its head quarters are located in Karachi and
Islamabad.

State Bank of Pakistan plays a very important role in the economic development of Pakistan. It is
responsible for carrying out the monetary and credit policy of the government. It regulates the
volume and direction of credit flow to different users and sectors. Apart from these activities it is
also involved in
 Banking Sector Supervision in Pakistan
 Micro Finance

 Remittance Facilities in Pakistan

 Opening of Foreign Currency Accounts with Banks in Pakistan under new
scheme.
 Handbook of Corporate Governance
 Guidelines on Risk Management
  Guidelines on Commercial Paper
 Guidelines on Securitization
 SBP.Scheme for Agricultural Financing
 State Bank’s Shariah Board Approves Essentials and Model Agreements for
Islamic Modes of Financing
 Procedure For Submitting Claims With Sbp In Respect of Unclaimed Deposits
Surrendered By Banks/Dfis.
 Banking Sector Supervision in Pakistan

Lily_j
Great Answer Report
The State bank was established on July 1, 1948. Since its establishment besides performing its
traditional functions, it is undertaking a number of developmental and promotional functions in
the best interest of the country. These functions in the past were regarded outside the purview of
the central bank. The main developmental and promotional functions in brief are as
under:Traditional functions: The state bank of Pakistan was originally established to perform the
traditional functions of central bank of a country, monopoly of note issue, acting as a banker to
the government, controller of credit, functioning lender of the last resorts.

Building up a sound banking system: For rapid economic development of a country the building
up a sound financial system is necessary. The State Bank of Pakistan immediately after its
establishment in 1948 took up this task. The start was made with establishment of national bank
of Pakistan. Since then the total number of domestic scheduled banks has increased to eight
thousand. These banks are playing a prominent role in the mobilization of savings in rural and
urban areas of the country.

Credit targets: The State Bank of Pakistan gives targets to commercial banks for providing loans
in the field of agriculture, industry, housing every year. The prescribing of credit targets for these
priority sectors has greatly helped in raising productions. N0pk4
Great Answer Report
The state bank or central bank of pakistan can play very important role in economic
development, if they manage properly
1-monitoring and fiscal policies
2-monopoly on note issue
3-public debt management
4-financial advisor
5-bankers bank
6-remittances facilities
9-foreign exchange Mehdiamir
Great Answer Report
Central bank is like the life blood of any nation Anonymous
Great Answer Report
Sbp is the back bone of the economy. Anonymous
Great Answer Report
Comparison of role state bank of pakistan Anonymous
Great Answer Report
Role of state bank Anonymous
Grea