Professional Documents
Culture Documents
By Muhammad Munir Ahmed President Institute of Banking and Business Learning(IBBL) Ex- Chief Manager, SBP Lahore
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Commercial
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of central banks differ in developed and developing countries depending upon the level of economic development. In market-based highly developed economies, central banks are responsible only for ensuring Price Stability. They are to maintain the price increase(Inflation) in a given range, and accountable in case of non achievement. They work in a market-based environment, no interference from Government, No Debt Management for the Government.
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schemes became vehicle for Misutilisation of credit by influential persons in agriculture and industry in the Mid- Eighties and were discontinued in Nineties. In Nineties, all banks went into Red-Loss Incurring and SBP started Financial Sector Reforms with active collaboration of IMF and World Bank- a popular discussion point for common day discussion. SBP also became autonomous. SBP started a merit-based/ market- based banking system in the 21st century which is now one decade old.
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Achievements of SBP
During
the last 63 years SBP emerged as a credible institution in the country. It succeeded in getting more Autonomy as compared with its counterparts in South Asia It established a merit-based banking system in the country equipped with lattest levels of Information Technology and Capable HR . It could be counted among a few successful oragnisations in the country. It managed to divert flow of credit towards SMEs and Agricultural to a greater extent.
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Performance of SBP
There
are general reservations in the society about performance of SBP as under: IT could not maintain inflation in the country. The cost of banking service increased largely as shown by bumper profits of banks. Credit needs of SMEs and Agri/Micro Credit could not be met in the desired manner. It could not ensure a reasonable/fair rate of return to Depositors- the life and blood of a banking system
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Policy vs other economic policiesany slippage on account of Fiscal Policy is to be borne by Monetary Policy. Government is the biggest borrower-A major problem for autonomous SBP. Presence of an Elite Culture in the country. Lack of Market orientation of the economy.
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