State Bank of Pakistan


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State Bank of Pakistan

  1. 1. STATE BANK OF PAKISTAN Group members Adeel Shahzad Farah Gul Muhammad Irfan Wagma anwar
  2. 2. INTRODUCTION•Concept of central Bank•State Bank of Pakistan
  3. 3. Historical Background Of SBP•Reserve bank of India•Distribution of RBI’s reserve afterindependence•Establishment of SBP
  4. 4. Facts and figures Central Bank of: Pakistan Established:1947 Headquarter s:Karachi & Islamabad Governor: Mr. Yaseen Anwar
  5. 5. Structure of SBP
  6. 6. SBP Independence•According to Act 1997 SBP is fully independent.
  7. 7. Objectives: Full employment Price stability
  8. 8. Core functions of SBP
  9. 9. Primary functions•Issuance of notes oSbp has monoply according to act 1956 oTwo departments: Issue departmant  banking dep
  10. 10. Cont;o Min. 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
  11. 11. Primary functions• Conduct of monitory and credit policy – Tools of formulating monitory and credit policy: o 3day repo o T-bills o Open market operations o Cash reserve ratio o Statutory reserve ratio
  12. 12. 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 inspection o On-site inspection
  13. 13. 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.
  14. 14. 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.
  15. 15. 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)
  16. 16. Secondary functions• Management of foreign exchange – SBP is responsible for foreign exchange (act 1947) – SBP prevent country currency from wide fluctuations
  17. 17. 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
  18. 18. 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