Mr. Zahid Husain (1895 – 1957)

First Governor State Bank of Pakistan

June 10, 1948 – July 19, 1953

Education:

Mr. Zahid Hussain was a distinguished civil servant and economist who played a crucial role in shaping Pakistan’s financial and economic policies after its independence in 1947. Born in 1895,he studied at Lahore and Aligarh.He pursued higher education at Aligarh Muslim University, which was a hub of modern education for the Indian Muslims.

In the Aligarh University, he was awarded the Iqbal Gold Medal, recognizing his achievements and potential as a student, and the Morison Medal given to him for standing first in MA History. He reorganized the Anglo-Arabic College and Schools in Delhi on a democratic basis in 1938 and was the first Treasurer of the Delhi University.

Professional Experience and Achievements:

Mr. Zahid Husain, on the explicit directions of Quaid-e-Azam Muhammad Ali Jinnah, founded the State Bank of Pakistan after independence and was also appointed as its first Governor. He held this position for five years from June 10, 1948 to July 19, 1953. 

Mr. Zahid Husain started his professional career as a teacher at Aligarh Muslim University, before passing the Competitive Examination of Finance Department and joining the government service of undivided India.Before Pakistan’s independence, he held several key positions in the financial administration of British India.His experience in the united India’s Audit & Accounts Service played a crucial role in his professional career. His expertise in financial auditing and economic management later helped him contribute to the development of Pakistan’s public finance, auditing, and banking sectors.

As an Audit & Accounts Service officer, he served as Financial Advisor to the Chief Commissioner of Delhi, Financial Advisor in the Supply Department, and the Financial Commissioner of Railways. From 1945 to 1947, he was Finance Minister in the Nizam’s Government of Hyderabad Deccan. Mr. Zahid Husain also served as vice-chancellor of Aligarh Muslim University from April 20, 1947 to August 7, 1947. He was part of the Partition Committee that decided the division of assets between Pakistan and India. Following Pakistan's independence,

Mr. Zahid Husain became the country’s first High Commissioner to India, serving from August 1947 to April 1948.It was during his stay in Delhi that Quaid-e-Azam asked Mr. Zahid Husain, one of the senior most Muslim officers of Indian Audit & Accounts Service, to return to Pakistan and assigned him the charge of a Special Division for the creation of a central bank for the new country. He established the State Bank in just three months, promulgating the draft Order for amendment of the Pakistan (Monetary System & Reserve Bank), 1947 on May 12,1948 that successfully completed the transition from reliance on the Reserve Bank of India to Pakistan’s own independent central banking system from 1^st July,1948.

He designed Pakistan’s first financial policies to stabilize the economy, introduced regulations to control inflation, established a foreign exchange control system,encouraged the growth of Pakistani-owned banks, and laid the foundation for modern banking practices. He also helped set up Pakistan’s first public accounting system for government expenditures and revenues and ensured that Pakistan followed international best practices in public financial management.

In addition to the State Bank,he also established the National Bank of Pakistan. Mr. Zahid Husain was a visionary who understood the importance of education and training for the new country that had very little trained human resources. He therefore established the Institute of Bankers Pakistan to train the young officers and improve their capacity for running the financial sector in Pakistan. He also recruited a stellar group of economists in the State Bank Pakistan, including Dr. Mahbub ul Haq known for his pioneering work on Human Development, Dr. Pervez Hasan recognised for his work on development economics, on the economy of Pakistan and the East Asian economies as well as Dr. Moin Baqai and Dr. Muhammad Yaqub who joined international financial institutions.

Mr. Zahid Husain served as the Chairman of Taxation Inquiry Committee as well as Chairman of the Planning Board, where he authored the first Five-Year Development Plan (1955-1960) of the country. The plan consisted of about 400 pages, and he wrote every word of this plan in his hand.

Legacy and Impact:

Mr. Zahid Husain’s contributions have had a long-lasting impact on Pakistan’s economy, banking, and public financial management. His legacy includes creating a stable financial system for Pakistan, laying the foundations for Pakistan’s audit and public financial accountability institutions, training the first generation of Pakistani financial experts and auditors,shaping Pakistan’s banking skeleton and monetary policies, as well as financial regulations.

In recognition of the meritorious services rendered by him for the nation, it was decided on the Silver Jubilee of the State Bank of Pakistan in 1973 to institute a series of lectures in his name titled Zahid Husain Memorial lectures. Under this series, eminent economists of international repute are invited to deliver lectures on economic and monetary policies. Furthermore, the State Bank has also established memorial chairs in economics at public sector universities in the name of former governors including Mr. Zahid Husain memorial chair at the University of Karachi. Mr. A Zahid Husain Post Doctoral Research Fellowship Programme has also been established in the State Bank offering opportunities for research in economics related topics.

Zahid Husain passed away in 1957.

In the words of a former Governor State Bank, “when I read about Mr. Zahid Husain, I see a giant; what he has been able to achieve is remarkable. He was from Audit & Accounts Service, and the Quaid who was a great leader and he identified him and tasked him with the creation of a central bank, and within a few months he did it; it is almost like a miracle. After that, establishing the National Bank of Pakistan, the first Chairman of the Planning Commission of Pakistan, coming up with the first Five-Year plan – these are all huge achievements. I think even if one is able to do even one of those in one’s lifetime, that would have been enough work for an ordinary individual, but he was a giant and he was able to achieve so much.”

In recognition of the meritorious services rendered by him for the nation, it was decided on occasion of the Silver Jubilee of State Bank of Pakistan in 1973, to institute a series of lectures and to name the series after Zahid Husain. Under the program, eminent economists of international repute are invited to deliver lectures on the topical significance.

To watch a documentry about Mr. Zahid Hussain, please click below