RBI was Pakistan’s central bank after partition: Extraordinary story of India’s bank issuing Pakistani currency

Did you know the Reserve Bank of India briefly served as Pakistan’s currency and banking authority after Partition in 1947? Discover how RBI issued modified banknotes for Pakistan and why the unusual arrangement ended in 1948.

New Delhi: When India became independent on August 15, 1947, one institution suddenly found itself serving not one sovereign country, but two. The Reserve Bank of India (RBI), created in 1935 as the central bank of undivided India, was temporarily retained as the currency and banking authority for Pakistan. It was an extraordinary arrangement born not of cooperation between friendly neighbours, but of sheer administrative necessity: Pakistan had become a country overnight, but it did not yet have its own central bank or a fully independent currency system.

Why Pakistan needed the RBI

Partition divided territory, institutions and financial assets, but central banking infrastructure could not be split overnight. The Pakistan (Monetary System and Reserve Bank) Order, 1947, issued on August 14, provided for the RBI to remain the common currency authority for India and Pakistan until........

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