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Central Bank State Bank of Pakistan
Organization of SBP • Established in 1st July, 1948. • Purpose • Regulating monetary & credit system of Pakistan. • Organizational Structure • Central Board of Directors • One Governor • One Deputy Governor • Eight Directors
Functions • Regulator of Currency • Banker, Agent and Advisor to the Govt. • Controller of Credit. • Clearing house for Transfer and Settlement • Custodian of Cash Reserves of Commercial Banks • Custody & Management of Foreign Exchange Reserves • Lender of the Last Resort
Regulator of Currency • Monopoly of Note Issue. • Gold and Foreign Securities Requirement • Brings uniformity in the system • Better control over the money supply • Increases public confidence
Banker, Agent and Advisor to the Govt. • As Banker to the Govt. • Receives deposits, cheques, drafts deposits • Short-term advances to the Govt • Provides foreign exchange for purchasing foreign goods, repaying goods etc.
Banker, Agent and Advisor to the Govt. • As Financial Agent • Collects Taxes and other payments. • As an Advisor • Gives advices on all economic, financial monetary issues, • Agricultural credit • Industrial finance • Exchange control • Mobilization of savings, planning and development etc
Controller of Credit • To control the availability and cost of credit in the country through • Bank Rate the standard rate at which SBP discounts or buy bills of exchange or promissory note. • Open Market Operations credit rationing, regulation of margin requirements, and direct action. • Cash Reserve Ratio lowering or raising of minimum cash reserve