state bank of Pakistan

2. Group Members
 M Fahad Abid 2015-ag-1182
 Faiz Rasool 2015-ag-2194
 Ameer Hamza 2015-ag-1183
 Faizan Ali Nadir 2015-ag-1339
 Zohaib Azam 2015-ag-1627

3. STATE BANK OF PAKISTAN

4. Contents
 Introduction of SBP
 Mission statement of SBP
 Vision Statement of SBP
 History of SBP
 Purpose of Establishment of SBP
 Constitution of SBP
 Central Board of Directors of SBP
 Functions of SBP
 The Role of State Bank of Pakistan In Economic Development of Pakistan

5. Introduction
 “State Bank of Pakistan is the Central Bank of the country. Central Bank is a national
bank that provides financial and banking services for it’s country’s government and
commercial banking system, ass well as implementing the government’s monetary
policy and issuing currency.”

6. Mission Statement
 “To provide reliable banking services to Government, financial institutions, public
and to act as operational arm of State Bank of Pakistan”

7. Vision Statement
 Our vision is to develop the SBP (Bank) into a strong and dynamic institution,
equipped with an efficient and professional human resource base, having the
requisite technology and fully capable of providing quality service to stakeholders,
while complementing the State Bank of Pakistan in achieving its objectives.

8. History
 Reserve bank of India was the central bank of both Pakistan and India.
 On 30 Dec 1948 British Government commission distributed the reserve bank of
India’s reserve between Pakistan and India with ratio of 30:70.
 The losses incurred in the transition to independence were taken from Pakistan’s
share a total of 230 million.
 In May, 19948 M. Ali Jinnah took step to established SBP.
 That idea were implemented in June 1948.
 SBP commenced operation on July 1st 1948.

9. SBP was Established with the Purpose:
 To take over the entire working of Reserve Bank of India which was then working in
Pakistan as a Central Bank,
 To withdraw Indian notes and issue Pak notes,
 To create sound banking system in Pakistan,
 To formulate & monitor Monetary & Credit policy,
 It is engaged to regulate the monetary and credit system of Pakistan,
 To foster Pakistan’s economic growth to secure monetary stability and full
utilization of country’s productive resources

10. Constitution Of SBP
 Ownership lies with Government of Pak under Section 4 of SBP Act 1956,
 The working lies with BOD, which comprises of Governor, 02 Deputy Governor &
07 Directors. BOD meets at least 06 times a year, and at least 01 time a quarter,
 Under section 9 to 16 of SBP Act 1956, management of SBP comprises of Governor
as Chief Executive who is appointed for 03 years term, and he is assisted by Deputy
Governors who are appointed for 05 years,
 It has complete independence, and no Agency can issue or give instructions or
direction to any banking companies.

11. Central Board of Directors
 The central Board of Director consists of nine members:
 The governor (who is chairman)
 The secretary, finance division, Government of Pakistan and eight Directors,
including one Director from each province, to be nominated by the Federal
Government. The Directors are appointed for term of up to three years.
 Chairman (Governor SBP Ashraf Mahmood Wathra)
 Dr. Waqar Masood Khan (Secretary Finance)

12. Functions of SBP
 The State Bank of Pakistan also performs both the traditional and development
functions to achieve macroeconomic goals.
 There are three main types of functions of SBP
 Core Functions
 Traditional Functions
1. Primary Functions
2. Secondary Functions

14. Primary Function
 Issuance of Notes
 Conduct of Monetary & Credit Policy
 Regulation & Supervision of Financial System
 Banker’s Bank
 Lender of Last Resort
 Banker to Government

15. Issuance of Notes
SBP has monopoly according to Act 1956
Two Departments:
 Issue Department
 Banking Department

16. Issuance of Notes
 Min. amount of reserve for issue of notes is 1.2 billion (30%)
 Issue offices: Located in Karachi, Peshawar, Lahore & a number of currency chest all
over the Country

17. Banker’s Bank
 Services to Schedule Banks
 Deposits of Schedule Banks
 Remittance Facilities
 Clearing House

18. Banker to Government
 It maintains the accounts of Federal & Provincial Governments,
 It fulfils the banking functions on behalf of Federal & Provincial Governments,
 It accepts deposits of cash, cheques and drafts on behalf of Government drawn on
other banks,

19. Lender to the Government
 It extends credit (Lending) to the Government without any collaterals,

20. Secondary Functions
 Public Debt Management
 Management of Foreign Exchange
 Advisor to Government
 Relation with IFI’S

21. Advisor & Agent to Government
 It acts as Government’s Agent to buy or sell approved foreign exchange from
authorized dealers in Pakistan,
 It receives subscription of Government loans and payment of interest or return on
national or provincial debt and issue, and discounting of Treasury Bills

22. Sub-Groups of State Bank of Pakistan
 There are only two Sub-Groups of SBP
Banking Service Corporation (BSC)
National Institution of Banking & Finance (NIBF)

23. Non-Traditional Functions
 Development of Financial Institutions
 Training Facilities to Banker
 Development of Specialized Financial Institutions
 Credit to Priority Sector

24. Development of Banking System
 Commercial Banking
 Micro Finance
 Islamic Banking

25. Controller of Credit
 To formulate and execute policies to promote the expansion of banking and credit
policies,
 For effective Credit control, SBP uses other measures such as reduction / raising of
Marginal requirements & Cash reserve.

26. Exchange Control
 SBP exercises control on foreign exchange payments to and from country,
 It issues licenses to authorized dealer in foreign exchange,
 It exercises control on movement of capital from and to country,
 It maintains “Export Price Check” on cotton, Rice Etc.

27. Other Functions
 Safeguards interest of the depositors,
 Custodian of National interest,
 Ensures smooth working & growth of banks,
 Provides special training for banks personnel.

28. The Role of State Bank of Pakistan In Economic
Development of Pakistan
 Issue of Notes
 Bankers to Government
 Banker’s Bank
 Clearing House
 Advisor to Government
 Lender of Last Resort
 Controller of Cerdit
 Economic Growth
 Growth of Credit Institution

29. The Role of State Bank of Pakistan In Economic
Development of Pakistan
 Growth of Money Market
 Value of Rupee
 Special Funds for Development
 Debts Management
 Foreign Exchange Reserves
 Exchange Centre
 International Relation
 Economic Information