This book provides a historical record of the growth and development of banking in Pakistan. It chronicles important events in the field of monetary management, and critiques monetary and fiscal policies pursued in Pakistan since independence. This edition contains a comprehensive analysis of the current situation of the financial and monetary system in Pakistan from 1947 till 2003. Part One presents the major schools of monetary theory and assesses their policy recommendations in the Pakistani context. Part Two describes the institutional structure, the impact of the financial sector on economic development, and assesses monetary policy. It also includes a review of several empirical studies on monetary and financial development in Pakistan. The fifth edition has been extensively revised and updated and includes: New material on the development of the theory of monetary policy, since the 1990s and the theory and practice of central bank autonomy; and New chapters on Marxist monetary theory and on the theory and practice of Islamic banking. This book covers graduate and undergraduate courses in Economics, Finance and Banking, and Business Studies. It also serves as a textbook for MBA, ICAP, IBP, and ICMAP course of studies. It is essential reading for those taking the Institute of Bankers and similar professional examinations. Policy-makers and researchers seeking a comprehensive overview of Pakistan's financial sector, will find this new edition an essential reference.