Partition 1947: India might owe Pakistan Rs 5.6 billion!

The SBP report says the division of assets and liabilities of the Reserve Bank of India post-1947 still remains incomplete. Pakistan and India became two independent nations in 1947 when the British rulers decided to leave the sub-continent.

State Bank of Pakistan (SBP) says India still owes it a little over Rs 5.6 billion to Pakistan. The SBP, from the first-ever Statement of Affairs that the SBP issued on its second day of existence July 2, 1948 to the latest one released on June 27, 2014, has listed the unsettled claims on the RBI among its assets unfailingly for the last 66 years.

The SBP’s issue department which deals with currency and the assets that underlie it shows the outstanding claims on the RBI under two distinct categories of assets.

The bigger chunk, comprising gold coins worth Rs 4.1 billion, sterling securities amounting to Rs 501.6 million, government of India securities worth Rs 240.4 million and Rs 4.9 million of rupee coins, appears as assets held with the RBI pending transfer to Pakistan.

The smaller chunk consists of India notes representing assets receivable from the Reserve Bank of India.

As per the agreement between political leaderships of the two sides, the RBI was to remain the Central monetary authority for both India and Pakistan post-Partition, with Indian notes to stay on as legal tender in Pakistan until September 30, 1948.

According to the first annual report of the SBP for 1948-49, the two governments mutually agreed to end the Reserve Bank of India’s status of the common monetary authority from July 1, 1948. Subsequently, the SBP was to claim equivalent assets against these Indian notes and coins from the RBI.