Central bank or state bank of Pakistan

they provide the complete information of SBP .in which history,funcation,board of director ,Aim, plan ,monatery policy and conculation are added

1. Central Bank State Bank of Pakistan State Bank of Pakistan By : BBA 6 th

2. Group Member Mahpara kanwal Azhar Hussain Tahira yaseen Abdul Rauf Gcuf-sub campus sahiwal Zunair Munir

3. Presentation theme ,Bank, Central Bank By- Mahpara Kanwal Student of BBA 6 th Department of Management Sciences GCUF sub campus Sahiwal

4. Presentation theme: Origin Definition purpose Bank Definition Purpose function Central bank Definition Board of Director Aim of the bank Functions of the bank Constitution State Bank of Pakistan Conclusion

5. What is Bank? Definition: Institution Providing loans to lend And create the credit money An other Definition Accumulate the surplus Advance to deficit The difference between surplus and deficit called spread earning or profit organization

6. What is Bank? Origin of Bank: Italian word; Derived from “BANCUS” Means “BENCH” German word; Derived from “BANQUE” Means Firm

7. What is Central Bank? Definition; Institute which manage the following activities Nation’s currency Money supply Interest rate Oversee, their country commercial banking system Also called Reserve Bank Monitory Authority

8. What is Central Bank? Origin of Central Bank: a. Nuremberg conference: In 1548, held in Nuremberg, Germany To cover the loop holes in banking system In 1578, First Central bank was established, in Geneva, Switzerland

9. What is Central Bank? Origin of Central Bank Cont.… b. Brussels conference: Before WW1 (1914-18),there was few central banks After “WW1” confusion in currency & exchange market Which become cause for some banking failure So, the conference held in held at Brussels in 1920 That every state must have their own central bank

10. Constitutions & Functions of Central Bank By- Azhar Hussain Student of BBA 6 th Department of Management Sciences GCUF sub campus Sahiwal

11. Functions of Central Bank: Monopoly of note issue Bankers, Agent and Adviser to the Government Custodian of Cash Reserve of Commercial Bank Custodian of Nation’s Reserve of International Lender of The Last Resort

12. Functions of Central Bank: Collection of Data Central Banking in Developing Countries Clearing House Function Credit Control Other Functions

13. State bank of Pakistan

14. Mission statement of SBP To provide reliable banking services to Government, financial institutions, public and to act as an operational arm of State Bank of Pakistan

15. State Bank of Pakistan : History of SBP: Before independence, FRBI was the Central bank, Sub-continen t After independence, FRBI divided, Ratio of 70:30 in between India and Pakistan And 30% reserve was equal to Rs. 750 million Muhammad Ali Jinnah inaugurated SBP, Commenced operation in July 1, 1948 SBP work under State bank act 1956 Before , Nationalization ordinance 1974 SBP share capital was 51% Government contribution and 49 % by private investors

16. Central Board of Directors The Central Board consists of nine members: the Governor (who is Chairman), The Secretary, Finance Division, Government of Pakistan and eight Directors, including one Director from each Province, to be nominated by the Federal Government. The Directors are appointed for terms of up to three years

17. Central Board of Directors Chairman: ( Governor SBPAshraf Mahmood Wathra) Dr. Waqar Masood Khan (Secretary Finance) Mirza Qamar Beg Khawaja Iqbal Hassan Mr. Iskander Mohammed Khan Mr. Shahid Ahmed Khan Mr. Mehmood Mandviwalla Mr. M. Nawaz Tiwana Mr. Muhammad Hidayatullah Mr. Zafar Masud

18. Functions of SBP By- Tahira yaseen Student of BBA 6 th , Department of Management Sciences GCUF sub campus Sahiwal

19. Functions of SBP: Core functions Non-traditional functions Traditional functions Primary functions Secondary functions

20. Primary functions of SBP

21. Primary functions of SBP A. Issuing Currency Notes: Monopoly of Note Issue. Sole authority of notes issues, except coins Work under act of 1956 Issue offices: located in Karachi, Peshawar & Lahore Brings uniformity in the system Better control over the money supply Increases public confidence

22. Primary Functions of SBP : A. Issuing Currency Notes: Methods for issuing notes 1. Fixed fiduciary system 1956-1965 New form of currency principle Central government, issue notes, fixed by Government This fixed amount, backed by government Securities and bonds So, if government, issue more currency Then, should be backed by Metallic reserve Advantage : Control over inflation No chance of currency over issue

23. Primary Functions of SBP: A. Issuing Currency Notes: Methods for issuing notes 2 . Proportional reserve system: Notes issues is backed by metallic reserve Rest of amount backed by Govt Bonds and securities 25%- 40% backed by gold 60%-75% backed by Govt securities and bonds In Pakistan ; 30% against Gold reserve 70% against Govt securities and bonds

24. Primary Functions of SBP: A. Issuing Currency Notes: Methods for issuing notes 3. Minimum reserve system: Increase or decrease currency supply according to economy climate Notes issues shows Demand for money in the economy Price set by= by aggregate demand and aggregate supply

25. Primary Functions of SBP: B . Controller of Credit: To control the availability and cost of credit in the country through Purpose ; full employment, price stability, increase in production etc. Open market operations Variation in bank rate Credit rationing Varying reserve requirements Quantitative control Qualitative control Varying margin Requirements Consumer’s credit regulation Use of moral persuasion Direct action

26. Primary Functions of SBP: C . Regulations and Supervision of banks: Full power to supervise and control the banks Banks liquidation Banks restructuring Banks performance Banks valuation

27. Primary functions of SBP: D . State bank as Clearing house: Where representatives of different banks meet To exchange cheques withdrawn The state bank then settle the difference

28. Primary Functions of SBP: E . Lender of last resort: Act as last lender of resort for commercial banks Used when banks have shortage of cash reserve Then, the state bank rescue them, from the danger situation Method used is; Provide cash by discounting bill of exchange And treasury bills Safe guard the banks from the liquidation

29. Primary Functions of SBP: F . Bankers and Agent to the government: As Financial Agent: Collects Taxes and other payments. Repaying external debts Keep government deposits Short-term advances to the Govt Provides foreign exchange for purchasing foreign goods, repaying goods etc. Repaying external debts As banker to the Government:

30. Secondary Functions of SBP By: Abdul Rauf Student of BBA 6 th Department of management sciences GCUF –sub campus Sahiwal

31. Secondary Functions of SBP: Public Debt Management Management of Foreign Exchange Advisor to Government Relations with IFI’S

32. Secondary Functions of SBP: A. Public Debt Management: Also called Government debt or national debts This may be own by either Federal or provincial government The budget deficit actually shows, public debts for particular period Method for debts are: Issuing bonds Issuing securities By offering bills Low economy countries, get the loan from super-nation

33. Secondary Functions of SBP : B . Management of Foreign exchange: State bank is custodian of foreign exchange Reserve and manage the exchange control Fixing value of currency Check currencies flight in and out Agent of government, Pakistan's representative with IMF and world bank

34. Secondary Functions of SBP: C. Advisor to the Government: maintains deposit accounts, effects domestic and foreign currency transactions and provides advice relative to financial matters Government holds deposit accounts at central bank The account are using for: For receiving funds Making payment Clearing cheques issued by government

35. Secondary Functions of SBP: D . Relationship with IFI’S: Relationship with Relationship with World bank IMF ADB

36. N on-traditional Functions of SBP : Development of Financial Institutions commercial bank, Micro finance and Islamic banking Training Facilities to Banker Development of Specialized Financial Institutions Credit to Priority Sector I ndustrial, Agriculture, Exportation

37. Monetary policy &Plan of SBP & Conclusion by : Zunair munir Student of BBA 6 th Department of management sciences GCUF –sub campus Sahiwal

38. Types of monetary policy Contractionary / Tight monetary policy “Tight monetary policy, also called contractionary monetary policy, tends to curb inflation by contracting/reducing the money supply” Expansionary /Easy monetary policy “Easy monetary policy, also called expansionary monetary policy, tends to encourage growth by expanding the money supply

39. Tools of Monetary Policy Quantitative Tools Open Market Operations Bank Rate Cash Reserve Requirement Liquidity ratio Special deposit Qualitative Tools Credit rationing Credit ceiling Moral persuasion Direct action Advertisement

40. Targets for monetary policy Employment, economic growth, and inflation can not control directly, it must choose settings, or targets, for variables that it can control in order to best achieve its goals. In practice, there are two types of targets: Money supply targets. Interest rate targets.

41. Aim of SBP functions: State bank and Economic Growth: Crucial role in the economic growth Facilitating and boosting the economy development Improving financial market( banks and financial inst.) Also contribution, capital market improvement(PIBs) Also help, commercial banks, through export scheme, by offering export at low rate Establishing special credit institution, for meeting medium and large term financial needs

42. Prudential regulations : Code of conduct or guide lines through which state bank supervise the institutions Shows standard format for activities To decrease their risk-taking Definition: Purpose: Provide safety to depositor’s funds Keep financial stability Uniformity in the sector

43. Perdulation of regulations: Example: REGULATION-XVI WINDOW DRESSING Banks shall refrain from adopting any measures or practices where by they would either artificially or temporarily show an apparently improved position of bank’s accounts as given in their Balance Sheet and Profit & Loss Accounts specially in relation to its deposits and profit . Particular care shall be taken in showing inter-branch and inter-bank accounts accurately and strictly according to their true nature.

44. Conclusion: Bank Central bank Functions of central bank State bank of Pakistan Functions of state bank of Pakistan Constitution of state bank of Pakistan Prudential regulations of state bank of Pakistan