Central Bank :
A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loaninterest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial crisis (private banks often being integral to the national financial system). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently.
Most richer countries today have an "independent" central bank, that is, one which operates under rules designed to prevent political interference. Examples include the European Central Bank, the U.S.Federal Reserve, the Banco Central de Chile, the Reserve Bank of Australia, the Reserve Bank of India, the Bank of England, the Bank of Canada, Sveriges Riksbank, the Banco de la República de Colombia, Norges Bank, State Bank of Pakistan, National Bank of Azerbaijan, and the Banco Central de Bolivia (BCB). Some central banks are publicly-owned, and others are, in theory, privately-owned. In practice, there is little difference between public and private ownership, since in the latter case almost all profits of the bank are paid to the government either as a tax or a transfer to the government.
The State Bank of Pakistan (SBP) is the central bank of Pakistan. 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 nationalised, the scope of its functions was considerably enlarged. TheState Bank of Pakistan Act 1956, with subsequent amendments, forms the basis of its operations today. The headquarters are located in the financial capital of Pakistan, Karachi with its second headquarters in the capital, Islamabad.
Functions of SBP : Under the State Bank of Pakistan Order 1948, the state bank of Pakistan was charged with the duty to "regulate the issue of bank 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".
A large section of the state bank's duties were widened when the State Bank of Pakistan Act 1956 was introduced. It required the state bank to "regulate the monetary and credit system of Pakistan and to foster its growth in the best national interest with a view to securing monetary stability and fuller utilisation of the country’s productive resources". In February 1994, the State Bank was given full autonomy, during the financial sector reforms.
On January 21, 1997, this autonomy was further strengthened when the government issued three Amendment Ordinances (which were approved by the Parliament in May 1997). Those included were the State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962 and Banks Nationalisation Act, 1974. These changes gave full and exclusive authority to the State Bank to regulate the banking sector, to conduct an independent monetary policy and to set limit on government borrowings from the State Bank of Pakistan. The amendments to the Banks Nationalisation Act brought the end of the Pakistan Banking Council (an institution established to look after the affairs of NCBs) and allowed the jobs of the council to be appointed to the Chief Executives, Boards of the Nationalised Commercial Banks (NCBs) and Development Finance Institutions (DFIs). The State Bank having a role in their appointment and removal. The amendments also increased the autonomy and accountability of the chief executives, the Boards of Directors of banks and DFIs.
The State Bank of Pakistan also performs both the traditional and developmental functions to achieve macroeconomic goals. The traditional functions, may be classified into two groups:
The primary functions including issue of notes, regulation and supervision of the financial system, bankers’ bank, lender of the last resort, banker to Government, and conduct of monetary policy.
The secondary functions including the agency functions like management of public debt, management of foreign exchange, etc., and other functions like advising the government on policy matters and maintaining close relationships with international financial institutions.
The non-traditional or promotional functions, performed by the State Bank include development of financial framework, institutionalisation of savings and investment, provision of training facilities to bankers, and provision of credit to priority sectors. The State Bank also has been playing an active part in the process of islamisation of the banking system.
What is the Function of the Central Bank?
The first and most important function of a central bank is to accept responsibility for advising the government on the making of the country’s financial policy, and thus to see that it is carried out. The government must decide how much money there shall be in the country at a given time, and the central bank must take steps to increase or decrease the supply accordingly.
This was by no means clear when the bank of Somaliland was founded.
The specific reason then for its formation was to provide money for the government during the time when public expenditure had become too expensive to be financed out of current taxation. Its business at first was the receiving of money on deposit and lending of money against satisfactory security.
At first this lending was nearly all to the government, and gradually the bank of Somaliland came to perform other services on behalf of the government, and so to become regarded as “banker to the government”. Thus it undertook on the government’s behalf the circulation of payment vouchers, which were simply promissory notes of the government.
Accordingly, the bank of Somaliland was empowered to open regional branches for the purpose of restoring confidence by issuing its notes in the country.
As the central bank of the country, the bank of Somaliland must:
Stand ready to take prompt and decisive action to prevent any spreading loss of confidence
Implement the monetary policy of the government.
Act as banker to the government
Manage the exchange equalization account.
Is the note issuing authority;
Acts as registrar of government and nationalized industry.
Act as banker to the deposit banks
Have about hundred (100) accounts for overseas, central banks and for such bodies as the International Monetary Fund and The International Bank for Reconstruction and Development (the World Bank).
Replace worn-out and distorted bank-notes.
The Bank of Somaliland needs foreign experts to properly function and become a real central bank.
Banking
The Stat Bank of Pakistan looks into a lot of different ranges of banking to deal with the changes in economic climate and different purchasing and buying powers. Here are some of the banking areas that the state bank looks into;
State Bank’s Shariah Board Approves Essentials and Model Agreements for Islamic Modes of Financing
Procudure For Submitting Claims With Sbp In Respect of Unclaimed Deposits Surrendered By Banks/Dfis.
Banking Sector Supervision in Pakistan
Micro Finance
Small Medium Enterprises (SMEs)
Minimum Capital Requirements for Banks
Remittance Facilities in Pakistan
Opening of Foreign Currency Accounts with Banks in Pakistan under new scheme.
Handbok of Corporate Governance
Guidelines on Risk Management
Guidelines on Commercial Paper
Guidelines on Securitization
SBP.Scheme for Agricultural Financing
Bank Assets and Liabilities
This is a chart of trend of major assets and liabilities reported by scheduled commercial banks to the State Bank of Pakistan with figures in millions of Pakistani Rupees
Year
Deposits
Advances
Investments
2002
1,466,019
932,059
559,542
2006
2,806,645
2,189,368
799,285
Activities and responsibilities
Functions of a central bank (not all functions are carried out by all banks):
implementation of monetary policy
controls the nation's entire money supply
the Government's banker and the bankers' bank ("Lender of Last Resort")
manages the country's foreign exchange and gold reserves and the Government's stock register;
regulation and supervision of the banking industry:
setting the official interest rate - used to manage both inflation and the country's exchange rate - and ensuring that this rate takes effect via a variety of policy mechanisms
.
A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loaninterest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial crisis (private banks often being integral to the national financial system). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently.
Most richer countries today have an "independent" central bank, that is, one which operates under rules designed to prevent political interference. Examples include the European Central Bank, the U.S.Federal Reserve, the Banco Central de Chile, the Reserve Bank of Australia, the Reserve Bank of India, the Bank of England, the Bank of Canada, Sveriges Riksbank, the Banco de la República de Colombia, Norges Bank, State Bank of Pakistan, National Bank of Azerbaijan, and the Banco Central de Bolivia (BCB). Some central banks are publicly-owned, and others are, in theory, privately-owned. In practice, there is little difference between public and private ownership, since in the latter case almost all profits of the bank are paid to the government either as a tax or a transfer to the government.
The State Bank of Pakistan (SBP) is the central bank of Pakistan. 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 nationalised, the scope of its functions was considerably enlarged. TheState Bank of Pakistan Act 1956, with subsequent amendments, forms the basis of its operations today. The headquarters are located in the financial capital of Pakistan, Karachi with its second headquarters in the capital, Islamabad.
Functions of SBP : Under the State Bank of Pakistan Order 1948, the state bank of Pakistan was charged with the duty to "regulate the issue of bank 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".
A large section of the state bank's duties were widened when the State Bank of Pakistan Act 1956 was introduced. It required the state bank to "regulate the monetary and credit system of Pakistan and to foster its growth in the best national interest with a view to securing monetary stability and fuller utilisation of the country’s productive resources". In February 1994, the State Bank was given full autonomy, during the financial sector reforms.
On January 21, 1997, this autonomy was further strengthened when the government issued three Amendment Ordinances (which were approved by the Parliament in May 1997). Those included were the State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962 and Banks Nationalisation Act, 1974. These changes gave full and exclusive authority to the State Bank to regulate the banking sector, to conduct an independent monetary policy and to set limit on government borrowings from the State Bank of Pakistan. The amendments to the Banks Nationalisation Act brought the end of the Pakistan Banking Council (an institution established to look after the affairs of NCBs) and allowed the jobs of the council to be appointed to the Chief Executives, Boards of the Nationalised Commercial Banks (NCBs) and Development Finance Institutions (DFIs). The State Bank having a role in their appointment and removal. The amendments also increased the autonomy and accountability of the chief executives, the Boards of Directors of banks and DFIs.
The State Bank of Pakistan also performs both the traditional and developmental functions to achieve macroeconomic goals. The traditional functions, may be classified into two groups:
The primary functions including issue of notes, regulation and supervision of the financial system, bankers’ bank, lender of the last resort, banker to Government, and conduct of monetary policy.
The secondary functions including the agency functions like management of public debt, management of foreign exchange, etc., and other functions like advising the government on policy matters and maintaining close relationships with international financial institutions.
The non-traditional or promotional functions, performed by the State Bank include development of financial framework, institutionalisation of savings and investment, provision of training facilities to bankers, and provision of credit to priority sectors. The State Bank also has been playing an active part in the process of islamisation of the banking system.
What is the Function of the Central Bank?
The first and most important function of a central bank is to accept responsibility for advising the government on the making of the country’s financial policy, and thus to see that it is carried out. The government must decide how much money there shall be in the country at a given time, and the central bank must take steps to increase or decrease the supply accordingly.
This was by no means clear when the bank of Somaliland was founded.
The specific reason then for its formation was to provide money for the government during the time when public expenditure had become too expensive to be financed out of current taxation. Its business at first was the receiving of money on deposit and lending of money against satisfactory security.
At first this lending was nearly all to the government, and gradually the bank of Somaliland came to perform other services on behalf of the government, and so to become regarded as “banker to the government”. Thus it undertook on the government’s behalf the circulation of payment vouchers, which were simply promissory notes of the government.
Accordingly, the bank of Somaliland was empowered to open regional branches for the purpose of restoring confidence by issuing its notes in the country.
As the central bank of the country, the bank of Somaliland must:
Stand ready to take prompt and decisive action to prevent any spreading loss of confidence
Implement the monetary policy of the government.
Act as banker to the government
Manage the exchange equalization account.
Is the note issuing authority;
Acts as registrar of government and nationalized industry.
Act as banker to the deposit banks
Have about hundred (100) accounts for overseas, central banks and for such bodies as the International Monetary Fund and The International Bank for Reconstruction and Development (the World Bank).
Replace worn-out and distorted bank-notes.
The Bank of Somaliland needs foreign experts to properly function and become a real central bank.
Banking
The Stat Bank of Pakistan looks into a lot of different ranges of banking to deal with the changes in economic climate and different purchasing and buying powers. Here are some of the banking areas that the state bank looks into;
State Bank’s Shariah Board Approves Essentials and Model Agreements for Islamic Modes of Financing
Procudure For Submitting Claims With Sbp In Respect of Unclaimed Deposits Surrendered By Banks/Dfis.
Banking Sector Supervision in Pakistan
Micro Finance
Small Medium Enterprises (SMEs)
Minimum Capital Requirements for Banks
Remittance Facilities in Pakistan
Opening of Foreign Currency Accounts with Banks in Pakistan under new scheme.
Handbok of Corporate Governance
Guidelines on Risk Management
Guidelines on Commercial Paper
Guidelines on Securitization
SBP.Scheme for Agricultural Financing
Bank Assets and Liabilities
This is a chart of trend of major assets and liabilities reported by scheduled commercial banks to the State Bank of Pakistan with figures in millions of Pakistani Rupees
Year
Deposits
Advances
Investments
2002
1,466,019
932,059
559,542
2006
2,806,645
2,189,368
799,285
Activities and responsibilities
Functions of a central bank (not all functions are carried out by all banks):
implementation of monetary policy
controls the nation's entire money supply
the Government's banker and the bankers' bank ("Lender of Last Resort")
manages the country's foreign exchange and gold reserves and the Government's stock register;
regulation and supervision of the banking industry:
setting the official interest rate - used to manage both inflation and the country's exchange rate - and ensuring that this rate takes effect via a variety of policy mechanisms
.
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