The first central bank was established in Geneva in 1578. After the World War I, a conference was held in Brussels in 1920 and it was decided that every country must set up its central bank. WHAT IS CENTRAL BANK?
“Central bank is a special institution whose customers are commercial banks and state.” “It refers to the process whereby the total supply of goods and services of the society increases leading towards improved living standards.”
ROLE -OR- IMPORTANCE IN ECONOMIC DEVELOPMENT
State bank of Pakistan plays an important role in the process of economic development, which is clear from the following points: 1) Issue of Notes
State bank of Pakistan has monopoly in issuing currency notes. 5, 10, 50, 100 rupee notes are issued by the bank on 12 July 1976. Note of 500 rupee was issued on 1st April 1986 and 1000 rupee note was issued on 18th July 1987. At present note of Rs.5000 is also issued by the state bank of Pakistan. The state bank has three offices of issue, situated at Karachi, Lahore and Peshawar. 2) Banker to the Government
It is the bank of federal as well as provincial government. Its functions for the Govt. are: · Bank issued new notes on the behalf of government · Bank also accepts the government cheques and drafts · State bank responsible for transferring government funds at international level · Bank arranges the public debts of federal and provincial government · Bank receives no commission form the government · It holds federal and provincial government securities · State bank is liable for the payment of salaries and pension to government employees 3) Banker’s Bank
State bank of Pakistan is the bank of all commercial banks working in Pakistan. SBP started to spend $ 24.00 million in October 2002, with the assistance of World Bank for data warehousing, networking, application of software and other banking solutions. · State bank provides loans...
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