70 YEARS OF EXCELLENCE STATE BANK OF PAKISTAN (1948-2018) (2018-5)

At the time of partition of the sub-continent in 1947, it was agreed that the Reserve Bank of India would continue to function as the currency and banking authority in Pakistan till 30th September, 1948. This arrangement, embodied in the Pakistan Monetary System and Reserve Bank Order, 1947, was considered necessary. However, soon after the establishment of Pakistan it become evident that in the best interests of the country, it should have a central banking, institution of its own.

It was considered expedient to model the proposed institution on the line of the Reserve Bank of India and draft legislation for the purpose was issued in the form of the State Bank of Pakistan Order, 1948 on 12th May 1948 The functions, duties and powers of the State Bank were to be broadly similar to those of the Reserve Bank of India. The State Bank was charged with the responsibility of "regulating the issue of barnk 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 1956 Act which with subsequent amendments constitutes the current charter of the Bank requires it "to regulate the monetary and credit system of Pakistan and foster its growth in the best hational interests with a view to securing monetary stability and fuller utillization of the country's productive resources".

Simultaneously with the task of withdrawing the India notes and replacing them with Pakistan currency, the state bank had to revive and rehabilitate the banking system in the country which had virtually collapsed in the wake of partition of the Sub continent. Prior to independence (August, 1947) there were 46 scheduled bank offices in Pakistan dwindled from 631 to 195.

ใช้ 1949, the State bank initiated scheme for setting up a commercial bank which-would have a broader outlook and would be in a position to launch a bold branch expansion programe in the country.

One of the primary responsibilities assigned to the State Bank under its Charter is to regulate the monetary and credit system of Pakistan with a view to securing monetary stability in the country. Monetary stability signifies the avoidance of inflationary or deflationary pressures and maintenance of equilibrium in the balances of payments.

State Bank of Pakistan Role & Functions

Role:

State Bank of Pakistan (SBP), from the time of its establishment on 1st July 1948, in addition to the traditional Central Banking functions has also been entrusted with the additional task of instituting a sound Banking System in the newly established country.

Objectives

The princple objective of SBP as envisaged in the SBP Act 1956 is to promote monetary and financial stability and foster a sound and dynamic financialsystem so as to achieve sustained and equitable economic growth and prosperity in Pakistan.

Primary Functions

·         Sole Authority to Issue Notes

·         Monetary Management

·         Exchange Rate Management

·         Regulationton Supervision of the Financial System

·         Efficient Payment Systems

·         Lender of the Last Resort

Secondary Functions:

·         Public Debt Management

·         Advisor to Government

·         Liasioning with International Financial Institutions

·         Bankers. Bank

·         Banker to Government

Developmental Functions:

·         Development of financial framework

·         Providing credit to priority sectors/ specialized financial institutions ect'

·         Development of Islamic Banking System

·         Providing training to banking sector

On occasion of 70 years of excellence State Bank of Pakistan, a commemorative postage stamp of Rs. 8/- denomination is being issue by Pakistan Post on July 01, 2018.