Economy, Currency and Banking

The basic monetary unit is the Pakistani rupee, consisting of 100 paisa (53.65 rupees equal US$1; 2000 average). The State Bank of Pakistan, established in 1948, issues banknotes; manages currency and credit, the public debt, and exchange controls; and supervises the commercial banks. Pakistani banks were nationalized in 1974, but in the early 1990s the country transferred two banks to private ownership and issued licenses for ten new commercial banks. A number of major foreign banks maintain offices in the country. In conformity with Islamic doctrine, domestic banks in Pakistan have redefined the payment and collection of interest as profit. Investment partnerships between the bank and the customer have replaced loans at interest.