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Describe the importance of the State Bank of Pakistan in the country's development

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In every country, there is a central bank governed by the state. In Pakistan, it is called the State Bank of Pakistan. It issues currency notes and controls and regulates the entire banking system of the country. The State Bank of Pakistan does not deal directly with the public: it issues guidelines to commercial banks about different policies.

We are also thankful to the respected faculty member of SZABIST Larkana and our course instructor of Money & Banking subject in 4th semester of BBA program Sir Tanveer Ahmed Laghari, whose proper guidance and apprehensive nature helped us to complete this project. This project work improve our skills and during this project we learn many new things about the State Bank of Pakistan, we became aware about the different roles performed by the State Bank of Pakistan in development of our country, we hope that we will be given such works in future so that our skills could be strengthened.

In last we are obliged to our group mates and classmates for their love and support to complete this project.

We have chosen topic "The role of State Bank in the economic development of Pakistan" for our term project of Money and Banking course. This project is to cover all the areas regarding the micro and macro developments of the country concerned with the State Bank and its policies.

State bank of Pakistan is the central bank of Pakistan. It was established in 1948. Initially state bank of Pakistan was entrusted with the task 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".

In financial sector reforms of 1994 State Bank of Pakistan got full autonomy. "On January 21, 1997 this autonomy was further strengthened when the government issued three Amendment Ordinances. 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 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

The secondary functions

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.

Agency functions like management of public debt

Management of foreign exchange etc.,

And other functions like advising the government on policy matters

Maintaining close relationships with international financial institutions.
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