The presentation is about the central banks of Pakistan which is the state bank. This ppt contains all the functions and important information that is required for a excellent presentation.

1. Central Bank
(state bank)
of Pakistan
Role and
Functions

2. Group Introduction:
Rahat
Muhammad Bilal
Zahida
Aqsa

3. Central Bank???

4.  A central bank or monetary authority is a monopolized and often nationalized institution
given privileged control over the production and distribution of money and CREDIT. In
modern economies, the central bank is usually responsible for the formulation
of MONETARY POLICY and the regulation of member banks.

5. State Bank of Pakistan

6. State Bank of Pakistan
The central Bank of Pakistan
under the State Bank of Pakistan Act, 1956, which gives the Bank the authority to
function as the central bank of the country.
The SBP Act mandates the Bank to regulate the monetary and credit system of
Pakistan and
It also allow to foster its growth in the best national interest with a view to
securing monetary stability and fuller utilization of the country’s productive
resources.

7. 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.

8. . The headquarters are located in the financial capital of Pakistan,
Karachi with its second headquarters in the capital, Islamabad.

9. Organizational Structure of SBP
Board of Directors
The Central Board consists of nine members.
The Governor (who is Chairman).
One is the Secretary Finance Division,
Seven Directors including one Director from each Province (nominated by
the Federal Government).
The Directors are appointed for terms of up to three years.
Deputy Governors of the Bank may also attend the meeting of the Board,
if required, but they do not have the right to vote.

10. Currently The principal officer of
the SBP is Tariq Bajwa since 7 July
2017.

11. Measuring the Money Supply by State Bank of Pakistan:
Narrow measure of Money: M-1
The broader measure of money: M-2

12. • Narrow measure of Money: M-1
• Demand deposits at scheduled banks = 75%
• Currency in circulation = 23%
• Other deposits = 2%

13. The broader measure of money: M-2
• M-1 = 86%
• Time deposits at scheduled banks = 9%
• Deposits at resident foreign banks = 5%

14. 1.Traditional Function
• Primary
• Secondary
2.Non-Traditional
Function of SBP

15. Primary Function
Issuance of Notes
Conduct of Monetary
policy
Regulation and
Supervision of the
financial system
Banker’s Bank
Lender of the
Last resort
Banker to
Government

16. Issuance of Notes
• Regulate currency accordance with business and
general public need.
• Issuing affairs conduct by two nationally separate
departments.
1. Issuing department: Deals with notes
2. Banking department: deals with general banking.
• Assets of issue department are in the form of gold
coins, gold bullion, silver bullion.
• Remainder in the form of rupee coins, rupee
securities, internal bills of exchange, and other
commercial papers eligible for purchase.

17. Conduct of Monetary and Credit Policies
• Regulate monetary and credit system.
• Central board of the bank formulate and monitor it by
taking into account Federal Government’s target.
• Ensure its flow to the priority sectors.

18. Regulation and supervision of financial system
According to Banking Companies ordinance:
• Regulate and supervise the activities of Bank.
• Autonomy to the SB in area of banking supervision.
• 40 scheduled banks are regulated and supervised by SBP.
• Off-site and on-site monitoring: (off-site conducted by SB through
various periodical returns received from banks and DFIs. where as
on-site is undertaken on the premises of the concerned banks)
• Prudential Regulation: requires financial firms to control risks and
hold adequate capital as defined by capital requirements.

19. Bankers to Government
 As FinancialAgent:
 Collects Taxes and other payments.
 Repaying external debts
 As banker to the Government:
 Keep government deposits
 Short-term advances to the Government
 Provides foreign exchange for purchasing foreign goods, repaying goods
etc.
 Repaying external debts

20. Secondary Function
Public Debt Management
Management of Foreign Exchange
Advisor to Government

21. Public Debt Management:
o Also called Government debt or nationaldebts
o Thismay be own by either Federal or provincial government
o To manage the public debt, SBP set securities Department in December
1990
o Method for debtsare:
 Issuing bonds
 Issuing securities
 Byoffering bills
 Low economy countries, get the loan fromsuper-nation

22. Management of Foreign exchange:
 State bank is responsible for external value of currency.
 Reserve and manage the exchange control
 Fixing value of currency
 Check currencies flight in and out
 Agent of government, Pakistan's representative with IMF and world
bank

23. Advisor to theGovernment:
SBP actasadvisortothegovernment.
Provideadviseon:
• loanoperation
• agriculturecredit
• industrialfinance
• exchangeregulation
• bankingandcreditcontrol
• Debtmanagementissue.
• For receiving funds
• Making payment
• Clearingcheques issued by government

24. Non-Traditional Function
1. Development of the banking system
2. Training Facilities to Bankers
3. Development of specialized financial Institution
4. Credit to Priority Sector

25. Development of Banking System
• Significant Contribution to facilitating and fostering economic
development.
• Collapse with Non-Muslim banks.
• No monetary independence authority.
• It includes:
1. Commercial Banking
2. Microfinance
3. Promotion to Islamic Banking

26. Commercial Banking
• Reserve internal banking for Pakistani banks
• Allow foreign banks to open new offices.
• Remarkable growth.

27. Micro Finance
• SBP promote microfinance.
• Facilitated two micro finance banks
1. Khushali bank: set up in public sector
2. First Micro Finance Bank (FMFB) limited: Set up in
private sector.
• Paid up capital required for commercial bank

28. Promotion of Islamic Banking
1. SBP create public awareness through:
• Conferences
• Seminars
• Presentation
• Workshop
2. Develop better co-ordination.

29. Training facilities to Bankers
It includes:
• Institute of Bankers Pakistan
• Training Department
• NIBAF
• Training on Islamic Banking
• Training on Rural Finance
• Scholarship for PhD

30. Institute of Bankers Pakistan
• IBP start functioning from September 17, 1951.
• Governor elected as president.
• SBP have local offices of the institute which
organize seminars, short courses

31. Training department and NIBAF
• Provide training courses.
• During 1981-82 two training units were established.
• Secure training placement for bank officials
• Such as: IMF and World Bank.
• NIBAF is an independent subsidiary.
• Excellent training facility available on commercial and
central bank.
• NIBAF operates two compasses

32. Training for Rural and Islamic banking
• NIBAF design a module on Islamic banking
• IB revised topics on Islamic economics, banking and
finance.
• Launched a training program for bankers.
• Objective is to create awareness among the
farming community and sharing of knowledge with
stakeholders.

33. Scholarship for PhD
• To meet professionally qualified personnel,
scholarships are available.
• Scholarships available for domestic candidates from
PIDE.

34. Development of specialized financial Institution
To meet financing need various specialized credit institution are
designed.
Example:
• PICIC (Pakistan industrial credit and investment corporation)
• ADBP (agricultural development bank of Pakistan)
• HBFC (federal bank for corporation)
• FBC ( House building finance corporation)

35. Credit to priority sector
• Introduce various credit schemes.
• Mandatory and concessionary credit is about 50% of total
private sector credit.
• Objective is to increase efficiency in all sectors of economy.
• Let the market forces decides the proper allocation of the
resources.

36. Thank you