Essay About STATE BANK OF PAKISTAN (SBP).The State Bank of Pakistan is the central bank of Pakistan and was established in July 1948. It is responsible for regulating the monetary and credit system of Pakistan and promoting its economic growth and development.
Essay About STATE BANK OF PAKISTAN (SBP)
The State Bank of Pakistan plays a vital role in maintaining the stability of the financial system of Pakistan.Quaid-e-Azam ordered to establish State Bank of Pakistan (SBP) on 12th May 1948 and he inaugurated it on 1st July 1948 in Karachi. The capital of SBP was 30 million at the time of establishment.
(i) Central Board of Directors:
The management of the State Bank of Pakistan is under the control of central and local board of directors.
This board consists of:
- Governor (appointed for three years)
- Deputy Governors (one or more) – Appointed for five year
- Directors (seven).
- Local Board of Directors:
For the better management of State Bank, two local boards of directors have been established in Lahore and Karachi, which comprise of nine members each. The central government nominates these members.
DEPARTMENTS
- Note Issuing Department:
This department of State Bank of Pakistan issues all notes except the coins of one, two and five rupee.
- Banking Department:
The department works for the development of banking in Pakistan and obtains reports from banks. It also directs the banks to work for the economic development.
- Exchange Policy Department:
It controls foreign exchange and acts upon government policies to maintain foreign exchange reserves at desired level.
- Research Department:
It collects different facts and figures and makes their analysis to frame valuable policies.
- Training Department:
The officials of this department provide training to the officers from different banks to increase their vision and expertise in the field of banking.
- Finance Department:
This department is responsible to maintain the books of accounts, prepare financial statements of the Bank, coordinate for budgeting function in the Bank and periodic reporting to the management and to the Board of Directors.
- Legal Service Department:
It is responsible to provide legal support to the Departments of State Bank of Pakistan and its subsidiaries. Its domain covers litigation, advisory and regulatory I legislative functions to be addressed both on a case to case basis as well as through on-going identification of opportunities to provide clarity of direction.
Essay About STATE BANK OF PAKISTAN (SBP)
The main functions of the State Bank of Pakistan are to formulate and implement monetary policy, regulate the financial system, and manage the foreign exchange reserves of Pakistan. The bank issues and regulates the Pakistani rupee, the official currency of Pakistan. It also operates as the lender of last resort, providing loans to other banks and financial institutions in times of need.
One of the most important roles of the State Bank of Pakistan is to ensure the stability of the financial system of Pakistan. It does this by regulating and supervising banks and financial institutions to ensure they operate within legal and ethical parameters. The State Bank of Pakistan also promotes financial inclusion and literacy programs, to make financial services accessible to all citizens of Pakistan.
The State Bank of Pakistan also manages the foreign exchange reserves of Pakistan. This is important because it allows the country to maintain a stable exchange rate, which is critical for its international trade and financial transactions. The bank monitors and manages the inflow and outflow of foreign currency and adjusts the exchange rate as necessary.
Another significant function of the State Bank of Pakistan is to formulate and implement monetary policy. The bank sets the interest rates for borrowing and lending, and it uses various tools to manage the money supply in the economy. This helps to control inflation and stabilize the economy.
In recent years, the State Bank of Pakistan has taken significant steps to modernize and improve its operations. It has introduced digital banking services and implemented new regulations to prevent money laundering and terrorist financing. The bank has also taken steps to increase financial inclusion by promoting digital payments and encouraging the establishment of new banks and financial institutions.
In conclusion, the State Bank of Pakistan plays a critical role in the economic development and stability of Pakistan. Its functions as a central bank, including regulating and supervising the financial system, managing foreign exchange reserves, and formulating monetary policy, are essential to the country’s economic growth. The bank’s recent efforts to modernize and improve its operations will help to ensure it remains a crucial institution in Pakistan’s financial landscape for years to come.