The document provides information about the history, functions, and structure of the State Bank of Pakistan (SBP). It discusses that SBP was established in 1948 after the partition of India to act as Pakistan's central bank. It oversees monetary policy, regulates financial institutions, acts as a lender of last resort, and manages foreign exchange reserves. The SBP is led by a governor and board of directors and has various departments that perform functions like payment systems, research, and risk management.

2. Presented By:
Hira Amna 1014
Shumaila Kanwal 1050
Nabila Hanan 1035
Maimoona Rameen 1026
Nadia Iqbal 1036
Presented To:
Miss Mehwish
Financial Instituites

4. History
At the time of partition, the new state was without central bank and a proper
banking system was almost non existent.
Most of the bank had their head offices in India.
Out of 3496 branches of the scheduled banks, only 631 were situated in
Pakistan.
Reserve Bank of India was the central bank of both Pakistan and India.
On 30 December 1948,British Govt commission distributed the Reserve Bank
of India’s reserve between Pakistan and India with the ratio of 30:70

5. History
 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 took steps to establish SBP.
 That idea were implemented in June 1948.
 SBP commenced operations on July 1,1948.
 Its head office is situated in Karachi.
 It has total 16 offices in the Pakistan.

6. Vision statement
To transform SBP into a modern and dynamic central bank, highly
professional and efficient, fully equipped to play a meaningful role, on
sustainable basis, in the economic and social development of Pakistan.

7. MISSION STATEMENT
To promote monetary and financial stability and foster a sound and dynamic
financial system, so as to achieve sustained and equitable economic growth
and prosperity in Pakistan.

8. Objectives
SBP has following objectives:
 Issuance of currency notes
 Advance objective of leading a country towards development and
prosperity.
 Maintaining Price Stability with Growth
 Broadening Access to Financial Sector
 Ensuring Soundness of Financial Sector
 Exchange Rate and Reserve Management
 Strengthening Payment Systems

9. Management
Governor of state bank of Pakistan
Ashraf Mahmood wathra

10. Cont.
DY governor of SBP.
Saeed Ahmad Riaz Riazuddin

11. CONT.
Board of directors
Dr. Waqar Masood Khan Mr. Mahmood Mandviwalla Mr. M. Nawaz Tiwa Mr. Iskandar Mohammad

12. Cont.
Khawaja Iqbal Hassan Mr. Muhammad Hidayatullah Muhammad Zafar Masood Sehar Z. Babar
Corporate Secretary

13. DEPARTMENTS OF SBP
The SBP has total 21 departments, some are given as following:
 Payment Systems Department
 Research Department
 Risk Management Department
 Statistics and Data Warehouse Department
 Strategic Planning Department
 Treasury Operations Department
 Finance Department , etc.

14. Method Of Note Issue Adopted In
Pakistan:
Pakistan has used proportional reserve system up to December 1965. Under this
method 30% was to be kept as reserve in the form of gold coin, gold, silver bullion and
approved foreign exchange. The balance was covered by rupee coin and government
security After 1965.

15. Share Capital:
 (1) The capital of the Bank shall be one hundred million
Rupees, which shall be fully subscribed , paid-up and held
exclusively by the Federal Government and shall not be
transferable.
 (2) The capital may be increased by a resolution of the
Board subject to the approval of the Federal Government and
no reduction of the capital shall be permitted at any time.

16. Interest rate:
 Deposit interest rate 2004 to 2016:
actual rate: 7.26%
previous rate: 7.17%
 Average interest rate 2016:
actual rate: 6%
previous rate: 6.5%

17. FUNCTIONS
 The three main functions of SBP are given as the following:
 Primary functions
 Secondary functions
 Non traditional functions

18. PRIMARY FUNCTIONS
Primary functions include the following sub functions:
 Issue of Notes
 Conduct of Monetary and Credit Policy
 Regulation and Supervision of Financial System
 Banker's Bank
 Lender of Last Resort
 Banker to Government

19. Primary functions of SBP
Issuance of notes:
SBP is the sole authority to issue currency notes in the country and coins are
issued directly by the federal Government of Pakistan. .5,10,50,100 are issued
by the SBP on 12 July 1976. Afterward 500 note was issued on April 1986 and
1000 note was issued on July 1987. 5000 Note was issued in 2006.
Note issue offices:
The SBP has 4 offices of issue situated at Karachi , Lahore, Peshawar and
Quetta.

20. CONT…….
 Conduct of Monetary and Credit Policies :
The State Bank of Pakistan is responsible to regulate the monetary and credit
system of the country. SBP uses the monetary policy to control the credit by
commercial banks.
SBP controls the credit in order to have a check on inflation.
 Regulation and Supervision of the Financial System :
State Bank systematically monitor the performance of every banking
company to ensure that the basic banking rules & regulations are strictly
followed.

21. CONT….
 Bankers' Bank
 The Bank also functions as the bankers’ bank State
Bank provides the following three important services to the scheduled
banks.
 It keeps the deposits of commercial banks
 The State Bank also lends loan to the intuitions and banks which are
working for the advancement of agriculture and industry.
 In order to streamline payments through the financial system, the Bank
also manages the operations of clearing houses

22. CONT….
 Lender of the Last Resort:
The State Bank provides loan and re-discount facilities to scheduled banks in
times of dire need when they find no other source of funds.
 Banker to Government:
 The State Bank conducts the banking business of Federal and Provincial
Government and some government agencies.
 Federal and Provincial governments keep their deposits with the Bank free
of interest. In turn, the Bank does not charge any commission to the
governments for the banking services rendered to them.

23. SECONDARY FUNCTIONS
Secondary functions include the following sub functions:
 Management of Foreign Exchange
 Advisor to Government
 Relations with IFIs
 Public Debt Management
These both functions primary and secondary are also called traditional
functions.

24. Secondary functions of SBP
 Advisor to Government :
The State Bank of Pakistan, also acts as an advisor to the Government on
financial and economic matters particularly with reference to their monetary
aspects.
• Advise on loan operations
 Participate in economic policy making
 Monitory and fiscal policy coordination board (MFPCB)
 MFPCB coordinate fiscal, trade policy and exchange rate policy

25. CONT…
 Relationships with International Financial Institutions
Pakistan is the member of International Monetary Fund. The State Bank of
Pakistan deals with the IMF, the World Bank, Central Banks of foreign
countries, etc on behalf of the Government of Pakistan.

26.  Cont…
 Public debt management:
 SBP is responsible for public debt (act 1956)
 Responsible for payment of interest to public debt
 Sources
 Management of Foreign Exchange
SBP is responsible for maintaining the external value of the currency, the State
Bank of Pakistan assumed the charge of management and administration of
the exchange system of the country in line with the Foreign Exchange
Regulation.

27. NON TRADITIONAL FUNCTIONS
Non traditional functions include the following sub functions:
 Development of Financial Institutions
 Training Facilities to Bankers
 Credit to Priority Sectors
 Islamization of Banking System

28. Non traditional functions of SBP
 Development of Financial institutions
The most significant contribution made by the State Bank of Pakistan towards
facilitating and fostering economic development in Pakistan was the rehabilitation of
the banking system in Pakistan.
 Training facilities to bankers:
Keeping in view an acute shortage of trained bankers the Central Board of Directors of the
State Bank introduced "Bank Officers Training Scheme" .

29. CONT….
 Credit to Priority Sectors
The Bank has also introduced various credit schemes to channel resources
towards priority sectors like export finance scheme, mandatory credit for
agriculture, small business and small industries, etc.

Islamisation of the Banking System
The State Bank has also been involved in the process of Islamisation of the
economy in the general and the banking system in particular.