The state bank of Pakistan work constitutional act 1956.which
allows the bank to work as central bank of country. The state of Pakistan
control the financial activities and institution of Pakistan. And also help to
utilized the resources of Pakistan.
of Pakistan – Bank Services corporation was establish under ordinance 2001.Through
this SBP can mange currency and credit management .SBP work as clearing house. SBP work as agent of Pakistan
Pakistan came to an existence country. A country without the central bank or
banking system was are almost non-existance. Out of 3496 branches of scheduled
bank 631 in Pakistan. Hindus withdraw all the money withdraw form which in
terroty Pakistan and the result many bank are bankrupt. Before 30 September
1948 the monetary policy controlled by reserve bank of india. After 30
september SBP realized that the country interest wloud be hurt. And then
decided SBP take our the control the all financial activities.
Functions and objective of state bank of Pakistan
of note issue:
In Pakistan country, SBP has sole right or monopoly of note issue ,this authority has been given to
central bank for:
in the note
check undue expansion of notes
make surethat notes issued are the liability of the bank and get full support
are fallowing three main method of notes.
to the government:
Keeping the deposite of the central and
provincial government .it make the payment on the behalf of govt.it does not
pay interest on the govt deposite
loan as fical agent ,SBP provide loan to govt and make investment in
T.Bill long-term govt security
Transfer the capital of central and
provincial govt from one place to another
also advises the govt on economic matter such as controlling inflation or deflation devalution and revaluetion of the currency and balance of payment etc.
keep the account of govt of different department.it does not charge any
is not only the custodian of govt security,but also work fort their sale and
Banker’s to bank
act as Clearing house for settlement of mutual claim of commerecial banks
act as lender of last resort for the commercial banks. The SBP lend the money
to scheduled bank .save the
bank stress financial structure.
new bank or a branch of an existing bank cannot be established without the
prior permission of state bank of bank of Pakistan
regulate the policies of Advancing loans for commerecial banks fixed the rate of interest to be charged.
duty of SBP to promote thr growth of the banking system on sound footing.
Leader of the capital market
bank as considered as leader or guardian of capital market because it works
its establishment, make policy and take
discussion to avoid undue expansion of contraction of credit and to stable the
credit or money system.
is responsible for the management of foreign exchange and maintenance or the
external value of home currency more over foreign exchange reserves also kept with the state bank of
Pakistan its prepare balance the payments accounts of country to keep the balance farovable
IS the supervisor or custodian of the metallic reserve.it keeps them eith great
care and safety metallic reserve of commerecial bank .
is fixed exchange of domestic currency in tream of foreign currencies .its hold
these rates within narrow limit in keeping with obligation member of
international monetary funds and tries to bring stability in foreign exchange
act as the respresentative of govt in international trade beside making
investment international market ,its also provide foreign exchange to
importerand exporter in pakistan
monetary system of the country is unorganized then the balance of demand ans
supply of credit disturbs. Due to which
the economic system of the country face many difficulties .if the amount of
credit increases in any country the country become inflation stricken, which
leads to the problem of dearness .On the other hand ,if the amount of
credit decreases then thecountry become deflation stricken
which leads to the lower investment.
main objective of monetary policy is not only to maintain the condition of
employment in the country but also to creat mre opportunities of employment in
less developed country
of price stability does not mean to keep the prices fixed but to avoid the inflation
and deflation monetary policy is direct to words controlling inflation by decreasing
the total amount of credit controlling expansion with designed limit and curing
deflation by increasing it.
maintaining relative stability in the exchange rate is known as exchange stability
for exampel external value of the country `s currency .its also mantainance of balance of payment in equilibriam or at
least improve its positon
foreign value of currency is monetary policy help in consolidating the, external
value of local currency let to growth in trade.
in investment with the help of monetary policy state bank of vital role in the
enhancement of investment, which result economic stability.
of the country come into because of decreases in the deposit of gold these effect
can be remove with the help of monetary policy.
development of any country depends upon stable capital market. the state bank
of Pakistan take help of monetary policy in order to create stability in
policy also play also important of wealth, which help to achieve full employment
bank of Pakistan generate economic stability by controlling inflation and
bank of Pakistan steady growth in the national product and per capital income
.it requires best utilization of productive resources. Thus with these
objective the credit control policy and aims at mobilization of monetary
resources and insuring their fuller an productive us.
The monetary policy various productive sector
are encouraged to get loan due to which comprehensive increases in production
can be expected.
house is a place at state of Pakistan or
any other lending bank of the located where the representatives of the member
banks come at the fixed time and exchange
cheques or draft drawn on each other an still the resulting balance to
entries in the books of bank acting as clearing houses.
Suppose there are to bank in the city (bank A and bank B) and
the following payment.
Bank A payable to bank B= RS80000
Bank B PAYABLE TO BANK
The mutual obligations of each backs as under. In the above
example RS10000 is the balance because the receivable amount of bank B is
RS80000 and the receivable amount of bank A RS70000 will be cancel and surplus
is 10000 debit a bank B in its books credit by bank A in it books . as result,
this operation will be accomplished in less time period with the help of
clearing houses of state bank of
the presence of clearing houses banks of Pakistan have no need to keep large
sum of money in hand so they become able to give greater amount of credit.
transfer of cash from one place to another place without its physical
involvement.it prevent the danger of the loss of cash in transit.
the presence of clearing houses do not kept large reserve this in able that to
provide financing for trade, industrial and
clearing houses can be provide an effective device for preventing destructive
and undesirable competition among member banks
state bank of Pakistan keeps a strict check on the activities of the member
banks. It keeps the cash reserve of the banks and can carry out the monetary
policy in the best interest of the nation
clearing house, the number and amount of cheques reflect the efficiency of
banks which shows the pace of economic development of country.
the clearing house, banking experts get opportunity to discuss the flaws of
banking section which lead to effect banking system
In the presence of clearing house, banks keep
less cash which puts them in a better position t give loan. as a result, the trading sector grows
The member banks can arrange a uniform policy
for issuing L.c., bank drafts or foreign and for other services.
provide better services to their consumer connection with the collection of
cheques. Businessmen and other people are able to receive the payment to their
cheques very quickly.
STATE OF PAKISTAN
TO provide better banking and financial system stakeholde beside insuring
implementation of state bank of Pakistan in order to commend their trust and
STATE BANK OF PAKISTAN
TO STATE BANK O F PAKISTAN – BANK SERVICES
CORPORATION in to dynamic and in efficient organization equipped with requisite
technology and human resource capable of standing suitable support to the state
bank of Pakistan in achieving its objective