The State Bank of Pakistan has increased the paid-up capital (free of losses) benchmark from Rs100 million to Rs100 billion under the SBP Amendment Act passed earlier this year.
The increase in the benchmark of the paid-up capital is part of one of the conditions of the International Monetary Fund programme.
The jacking of the paid-up capital means that this capital shall be fully paid up and held exclusively by the federal government. The primary objective of the increase in the paid-up capital is to achieve and maintain domestic price stability and contribute to the stability of the financial system.
According to the SBP Amendment Act: “The paid-up capital of the bank shall be one hundred billion rupees, divided into one billion shares of one hundred rupees each, which shall be made up through issuance of bonus shares by capitalising of profits or general reserve or through subscription of shares in cash by the federal government.”
In the private sector, paid-up capital is the amount that an owner puts in a company or the amount of money a company has received from shareholders in exchange for shares of stock. In the private sector, paid-up capital is created when a company sells its shares on the primary market directly to investors, usually through an initial public offering.
