The State Bank of Pakistan (SBP) is a body corporate established under the State Bank of Pakistan Act, 1956, which authorizes the Bank to function as the central bank of the country. Under the SBP Act 1956 (as amended up to January 28, 2022), the primary objective of the Bank is to achieve and maintain domestic price stability. Without prejudice to the Bank's primary objective, the Bank shall also contribute to maintaining the stability of the financial system. In addition to these objectives, the Bank shall support the Government’s general economic policies with a view to fostering the development and fuller utilization of Pakistan's productive resources.
Vision
Credible, dynamic, and independent central bank, with a high calibre team, committed to improving the well-being of the people of Pakistan.
Mission
Maintain price and financial stability, with a technologically advanced financial system for inclusive and sustainable economic development of Pakistan.
Under the State Bank of Pakistan Order 1948, the Bank 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".
The promulgation of the State Bank of Pakistan Order of May 12, 1948 as well as the Order for the amendment of the Pakistan (Monetary System & Reserve Bank) Order, 1947 became the precursor to more comprehensive legislation in the form of SBP Act 1956 enhancing the scope of the Bank’s operations.
While the Constitution of Pakistan contains specific provisions pertaining to the State Bank, the SBP mainly draws its powers from the SBP Act 1956 (as amended up to January 28, 2022).
The SBP Act:
In addition, SBP's functions are regulated by and derived from:
The functions of the Bank are elaborated in Section 4C of the SBP Act and are as follows:
The Monetary Policy Committee (MPC) shall consist of ten members: Governor (Chairperson), three senior executives of the Bank to be nominated by the Governor, three members of the Board, to be nominated by the Board, and three external members to be appointed by the Federal Government, upon the recommendation by the Board.
The powers and functions of the Monetary Policy Committee are laid down in the State Bank of Pakistan Act, 1956 (as amended up to January 28, 2022).
In order to achieve the objectives of the Bank, the Monetary Policy Committee shall:
As per the SBP Act, 1956 (as amended), the Executive Committee shall consist of the Governor, the Deputy Governors, Executive Directors, and as needed other senior officials. The Executive Committee has the authority to formulate policies related to the Bank's core functions as well as those related to administration and management matters, excluding matters that fall within the purview of the Monetary Policy Committee, or the Board of Directors.
The Governor SBP is the Chief Executive Officer of the Bank and manages the affairs on behalf of the Board. The Governor is appointed by the President of Pakistan, for a term of five years which is renewable once. The Governor is assisted by three Deputy Governors appointed by the Federal Government. Each Deputy Governor is appointed for a term of five years which is also renewable once. In addition to the Governor and Deputy Governors, the management hierarchy includes Executive Directors and Directors overseeing respective areas.
