The Reserve Bank of India was the only bank for both India and Pakistan during the ruling period of British government before Pakistan became independent. Then the funds of Reserve Bank of India were distributed among both countries by British government on 30 December 1948. In which Pakistan was given the 30% of funds, where as India was given the 70%. In the transition to independence the losses were incurred from Pakistan’s share, which was a total of 230 million.
The founder of Pakistan Muhammad Ali Jinnah in May 1948 decided to launch a new banking system for the country and then soon State Bank of Pakistan (SBP) was established. He made an inauguration speech and inaugurated it as well. Finally on 1st, July 1948, the bank started working. The head quarter is in Karachi and the second head quarter is in Islamabad. The Bank was given the responsibility to “deal with the issues of bank notes and the reserves were kept in such a way that it secures the financial constancy in Pakistan, so that the credit and currency give benefits to the country.
When the State Bank of Pakistan Act 1956 was introduced a huge segment of the bank duties were extended. It was made necessary that the bank gives the maximum effort to serve the country. On January 21, three Amendment ordinances were issued which includes the State Bank of Pakistan 1956, Banking Company Ordinance 1962 and Banks Nationalization 1974. Due to these changes the bank was given the exclusive authority to conduct an independent monetary policy and the bank should set limit on government borrowing. These amendments also enlarged the funds and accountability Chief executive, the Boards of Directors and DFI’S. To achieve the macro economic goals the bank performs both the traditional and developmental role. The current governor of the bank is Yaseen Anwar. He is the 17th governor of SBP.
The bank has performed its vital role in Islamization of the banking system. The bank is the member of Alliances for Financial Inclusion and is actively promoting it. To overcome the problems of fraudulent activities the bank has changed the format and designs of many bank notes which are now in circulation in Pakistan. The bank is working hard to deal with the economic climate changes and different purchasing and buying power. State Bank of Pakistan also deals with prize bonds, in which people buy prize bond from the bank and the winner is announced on the given date.