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We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there
We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there
We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there
We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there
We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there
We would like to thank our coordinator “Mr. Muhammad Rehan ” who was always there

We would like to thank our coordinator “Mr. Muhammad Rehanwho was always there to help and guide us when we needed help. His perceptive criticism kept us working to make this project more full proof. We are thankful to him for his encouraging and valuable support. Working under him was an extremely knowledgeable and enriching experience for us. We are very thankful to him for all the value addition and enhancement done to us.

No words can adequately express my overriding debt of gratitude to my parents whose support helps me in all the way. Above all I shall thank my friends who constantly encouraged and blessed me so as to enable me to do this work successfully.

thank my friends who constantly encouraged and blessed me so as to enable me to do
thank my friends who constantly encouraged and blessed me so as to enable me to do
thank my friends who constantly encouraged and blessed me so as to enable me to do
thank my friends who constantly encouraged and blessed me so as to enable me to do
thank my friends who constantly encouraged and blessed me so as to enable me to do
thank my friends who constantly encouraged and blessed me so as to enable me to do

First of all I would like to thank that great entity that helped us to get through this report safely, the one who was always there when no one was!

SHUKER- ALL- HUMDULILLAH!

Would that I have words to pay tribute to our loving parents and teachers whose invaluable prays salutary admire and embodying attitude kept our spirit alive to strive for knowledge and integrity which enable us to reach milestone. We would also like to express enormous gratitude to our respectable teacher Mr. Muhammad Rehanfor providing the direction for this project and for helping us in refining our effort and ideas. I also acknowledge the help and pleasant gathering of all our class fellows. I am also thankful to all of those people who helped us in accomplishing our project.

Deposit Account Unit………………………………… . …… 04 Public Accounts
Deposit Account Unit………………………………… . …… 04 Public Accounts
Deposit Account Unit………………………………… . …… 04 Public Accounts
Deposit Account Unit………………………………… . …… 04 Public Accounts
Deposit Account Unit………………………………… . …… 04 Public Accounts
Deposit Account Unit………………………………… . …… 04 Public Accounts

Deposit Account Unit………………………………….……04 Public Accounts Unit…………………………………….14

Administration Unit……………………

Foreign Exchange Adjudication Division……………….…32

Development Finance Support Unit………………………

……………….….22

39

Currency Management Unit……………………………… 41 Foreign Exchange Operation Unit…………………………53

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

Deposit Accounts Unit (DAU)

Report to Deposit Accounts Department (Head Office Karachi)

OUR OBJECTIVES Our objectives to visit the Unit are as under;

Importance or role of DAU in State Bank of Pakistan

Study the operations and functions of Deposit Accounts Unit

Its structure and nature of responsibilities

Check out the procedures and impediments in their procedure

Check out the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Unit

DIVISIONAL STRUCTURE OF DEPOSIT ACCOUNTS UNIT

and suggestions for performance improvement of that Unit DIVISIONAL STRUCTURE OF DEPOSIT ACCOUNTS UNIT Page 4

DEPOSIT ACCOUNTS UNIT

The most important Unit or department of State Bank of Pakistan is Deposit Accounts Unit. Its roles are as prescribed under;

Role of Deposit Accounts Unit

Its deal with commercial Banks

Provisions of loans for meeting time and demand liabilities to commercial Banks (Refinance division of DAU)

Its directs the working criteria of commercial Banks

Balances and stock reports preparation

Bank Accounts maintenance

Transferring of funds

Daily closing of Accounts are made here

Closing of Bank daily operations

Scope of Deposit Accounts Unit

The scope of that Unit is very wide and nature of it is very important in the SBP.

It is the most major Unit of the Banking sector and its role is most important in the

industry generally its main scope is in these means;

Maintaining Accounts of commercial Banks

Reporting their daily transactions

Their reserve standing are checked here

Remittances are transferred from here

Remittances of all commercial Banks

Government remittances also deal here

Employee remittances

Most major portion of State Bank of Pakistan is the closing of clean cash book. Clean cash book is the record of the whole day transactions and their net effect after receipts

and payments.

Receipts & payments of government

Gives net off all receipts & payments through SBP

1. Current Account

Every scheduled Bank is required to maintain a current Account at principal Office of State Bank of Pakistan to perform and run their operation. There are 39 current Accounts maintained at Faisalabad office from which 39 are active at SBP BSC (Bank). These offices provide facility to other Banks to open current in SBP BSC (Bank) without any charges. Current Accounts are maintained by DAU that is entrusted with the work of opening and maintaining the Current Accounts of Scheduled and Non-Scheduled Banks and Other Foreign Banks.

Role of Current Account

This section deals with following activities:

Registration of Current Accounts of all commercial banks carrying out banking activities

Maintenance of cash balance with central bank

Accounts books are maintained here

Cash report on the daily transactions in commercial Banks

Power of attorney of all commercial banks with the names of authorized persons

Supervise the maintenance of statutory liquidity requirement (SLR) of commercial Banks

Scheduled Banks are required to keep with the State Bank certain percentage of their demand and time liabilities

Schedule Banks required certain amount of excess reserves with the State Bank

In case they are not meeting SLR, Penalties are imposed upon them

Supply of cash in case of shortage in their balances

Scope of Current Account

Current Accounts scope is as under

It is the main regulatory tool to control all the commercial Banks

It conveys the standing position of a single Bank

Maximum & minimum balance limits on all commercial Banks current Accounts is imposed. That’s why it serves the following purposes;

Securing the funds of general Public

Securing all other Bankers interest

Avoiding monopoly of a single Banker

Facilitate Inter-Bank payments

Buffer for statutory reserves in case of fluctuations in Banks demand and time liabilities.

For settlement of transactions with Other Banks or for Clearing purposes

Maintaining balance Accounts of all Banks is more important task in the sector to regulate their full impact on the Banking sector

This Unit examine whether commercial Banks are meeting their current Accounts & statutory requirements

REASONS OF CURRENT ACCOUNTS OPENING

When they have excess amount above their holding capacity they can transfer in central bank account

For settlement of transactions with Other Banks or for Clearing purposes

Liaison Office

When schedule Bank maintain principal Accounts and elect to submit returns and Statements required of them under rules small section known as schedule Bank section.

Principle Office

An office where the statutory accounts of all the commercial Banks are maintained is called principal Office. These are at State Bank of Pakistan Head Office Karachi.

Statutory Account

At statutory Accounts all commercial Banks have to maintain a SLR of 15% that is the minimum requirement for every commercial Bank if SLR of any commercial Bank SLR decreases from 15% then subsidiary Accounts balance can also be maintained. Statutory Accounts generally maintained by the principal representative of every commercial Bank.

Subsidiary Account

Some branches of commercial Banks also maintain accounts at their regional Offices of SBP, their reserves are called subsidiary Accounts. If the combination of both the balances is not fulfilling their reserve requirement then penalties should be imposed on them.

Current Account Opening Procedure

Current Account Opening Procedure 2. Remittance Section Page 8 of 57

2. Remittance Section

It facilitates the movement of funds from one place to another place in Pakistan. Conditions of transfer of funds

Movement of funds of commercial Banks

From branch to head Office

From head Office to branch

Movement of government funds

Movement of funds from SBP to out station

Facilitative the flow of funds smoothly and efficiently between various centers in the country

Employee funds transfer

From employees of SBP to employees of SBP

From employees of SBP to general Public

Types of Remittances

Telegraphic transfer (T.T)

Mail transfer (M.T)

Bank draft (B.D)

Government draft (G.D)

Telegraphic Transfer (T.T)

This facility is mainly facilitated to commercial Banks against charging commission of @0.07% by State Bank of Pakistan. They can transfer amount to the HOK @ 0.07% rate charged by Central Bank. It benefits the commercial Banks in the fallowing ways;

Safe sending of funds to their respective Head Office

Physical movement of fund is avoided

Small payment is made in order to send remittance

Large amount of funds are transferred from here

It provides Accounts transfer to commercial Banks and the funds are transferred to their respective branches

Mail Transfer (M.T)

It facilitates the employees of SBP free of charge. It is the fastest way of fund transfer. Transfer of funds between the employees of State Bank of Pakistan. It benefits the employees in the fallowing ways;

Fastest way of money transfer

Employee can avail it free of charge

Physical movement of funds is avoided

Bank Draft (B.D)

It facilitates the employees to transfer the funds outside the SBP free of charge. It is basically used for the official payments of SBP It benefits the employees in the fallowing ways;

Facility to transfer funds to every place of the country

Free serviced

Government Draft (G.D)

It facilitates the transfer of receipt and Payment of government free of charges. For example: Payment of salaries of government employees to any government department.

Receipts & Payments of government departments

Free facility to government

PAU facilitation

3. Clean Cash

It is record of the daily receipts and payments balance of the State Bank of Pakistan. It is also called Statement of Affairs of the Bank. Maintenance and balance of cash is regulated and reported on daily basis to Head Office. All the transactions regarding cash are adjusted by this section. All vouchers at the end of the day are recorded in the books of Accounts. Receipt of vouchers from PAU and other unit is affected in the clean cash book. Importance of Clean Cash Book

The most important document of the Bank which States the net position of the Bank how much it received and paid.

Record of the balances of all Bank transactions

Before its balance adjusted Bank closing is not possible

Statement of affairs of the Bank

Government Cash Transactions:

Generally most of Bank transactions are carried through under these heads. Some accounts of central government treated separately like railway. Its basically deals with the data received from Public Accounts Unit.

Central-I ( Non- Food)deals with the data received from Public Accounts Unit. Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV

Provincial-I ( Non- Food)received from Public Accounts Unit. Central-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.)

Provincial-II (Food)Unit. Central-I ( Non- Food) Provincial-I ( Non- Food) Provincial-IV (District Govt.) Central-1 (Non- Food): All

Provincial-IV (District Govt.)( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Central-1 (Non- Food): All Accounts of Federal

Central-1

(Non- Food):

All Accounts of Federal Government are being regulated under this head. All the receipts and payments and receipts of government are recorded in this head. For example; income taxes, federal employees salary etc. In DAU a combined head is used for the number of transactions. All the entries related to a specific head are posted under a head and their summary is maintained separately.

Receipts

Payments

Provincial-I (Non- Food):

It deals with Provincial Receipts & payments. All the transactions of provincial sector other than agricultural sector are recorded here. Same procedure of recording is adopted as for the central transactions. For example:

To Government Health Department, Judiciary, Education etc

Provincial-II (Food):

It deals with Government department which is engaged in Food & its product For example:

Agriculture department

Provincial-IV (District Government):

It deals with receipts & payments of District government. Like District councils Accounts are recorded under this head after getting record from District Accounts Office through Public Accounts Unit.

Additional Services:

Customer Facilitation Centre:

This unit receives the complaints of general Public regarding commercial Banks & financial issues and provides them necessary information as demanded. A separate telephone number is available for this purpose so that Public can contact & communicate their problems and issues and an Officer of Grade-2 available to listen the complaints of the general Public.

Suggestions about Deposit Accounts Unit

It was observed:

In this Unit there should be a substitute of an employee in case of his absence or leave so that it would not create burden on other coworkers.

As daily transaction and balance Statement is physically collected by the members of

commercial Banks so to facilitate the Banks SBP send this Statement to Banks through E- mail.

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

Public Accounts Unit (PAU)

Report to Public Accounts Department (Head Office Karachi)

OUR OBJECTIVES Our objectives to visit the Unit are as under;

Importance or role of PAU in State Bank of Pakistan

Study the operations and functions of Deposit Accounts Unit

Its structure and head of responsibilities

Check out the procedures and impediments in their procedures

Check out the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Unit

DIVISIONAL STRUCTURE OF PUBLIC ACCOUNTS UNIT

PUBLIC ACCOUNTS UNIT
PUBLIC
ACCOUNTS
UNIT
PAYMENT
PAYMENT
OF PUBLIC ACCOUNTS UNIT PUBLIC ACCOUNTS UNIT PAYMENT RECIEPT CASH TRANSAFER CLEARING CASH TRANSFER CLEARING Page
RECIEPT
RECIEPT
PUBLIC ACCOUNTS UNIT PUBLIC ACCOUNTS UNIT PAYMENT RECIEPT CASH TRANSAFER CLEARING CASH TRANSFER CLEARING Page 14
CASH
CASH
TRANSAFER
TRANSAFER
CLEARING
CLEARING
CASH
CASH
TRANSFER
TRANSFER
CLEARING
CLEARING

PUBLIC ACCOUNTS UNIT

This unit is the backbone of the State Bank of Pakistan. Being Banker to the government relating its basic functions it plays a key role to perform central Bank obligations, collect taxes on behalf of government which is the most important function of central Bank. Its roles are as prescribed under;

Role of Public Accounts Unit

Dealing in government Accounts

Banker to the government & hold cash balances of government Accounts

Collections of taxes & Providing short term loan

Payment of salaries to employees of the government

Dealing with the receipts & payments of government sector

Balances and stock reports preparation with PAU data

Government Accounts maintenance & Transferring of funds on transactions

Daily closing of accounts at DAU with the record of PAU

Closing of Bank daily operations after sending PAU vouchers

Scope of Public Accounts Unit

The scope of that Unit is very wide and nature of it is very important in the SBP.

It is the major Unit of the commercial sector and its role is most important in the industry

generally its main scope is as under;

Maintaining Accounts of government

Reporting their daily transactions to DAU

Maintenance of funds of central and provincial government

Assignment Accounts are maintained here

Major portion of State Bank of Pakistan is the closing of clean cash book. Clean cash book is the record of the whole day transitions and their net effect after receipts and payments. Without PAU balance it can not be maintained. Mainly these are;

Receipts & payments of government

Gives net off all receipts & payments through SBP

Cash Receipts & Payments

This section deals with the direct receipts and payments of government accounts. Now a days cash transaction is usually discouraged at a larger extent. Most of the transactions are made on account of transfer. Transfer account is made for the large denomination of transactions and are carried through the process from commercial banks. In PAU only the payments will be made against Provincial Government & Federal Government cheques.

If the entire particular are correct & verified. He will attached token with cheque then he will place the stamp of signature verification and pass it if its value is Rs.20, 000 or less and Rs.20, 000 above will be passed by ACM.

Drawing and Disbursement Officer (DDO) or its representative specimen is already kept by PAU. If new DDO is appointed than following document along with its specimen signature has to provide to PAU.

Transfer letter

Charge Report

All the other documents

Schedule must be sealed

After it a new signature card is issued to new DDO. On passing cheques are sent to cash department where from presenter get payment. At the end of working day cash department prepare “Payment Statement” and returned it to PAU, on next day paid instruments are sent backed to District Account Office. Daily and monthly statement is sent to DAU. Payment Vouchers are also sent to DAU so that they can prepare the clean statement.

CASH

CASH PAYMENT PROCEDURE

SCHEDULE PREPARATION RECIEVE TOKEN VERIFICATION TALLYING OF PRESENTING MONEY ISSUED (FROM LIST WITH VOUCHERS
SCHEDULE
PREPARATION
RECIEVE
TOKEN
VERIFICATION
TALLYING
OF
PRESENTING
MONEY
ISSUED
(FROM LIST
WITH
VOUCHERS
CHEQUE ON
FROM CASH
AFTER
OF
SYESTAMATIC
&
RECEPTION
PAYMENT
SCURITNY
RESPECTIVE
REPORT
DELIVERED
COUNTER
DEPTT.)
TO DAU

CASH RECIEPT PROCEDURE

DIRECTLY TICKING PREPARATION CASH ACCEPT INPUT/ WITH TRANSFER OF CASH OF REPORTS ALONG WITH SYESTMATIC
DIRECTLY
TICKING
PREPARATION
CASH ACCEPT
INPUT/
WITH
TRANSFER OF
CASH
OF REPORTS
ALONG WITH
SYESTMATIC
PAYMENT TO
AUTHORIZATIO
DEPARTMENT
& ABSTRACT
CHALLAN
N REPORT IN
TREASURER
VOUCHERS
FORM
PAU

Transfer Receipts and Payments

Cheques are delivered to PAU by NIFT. When a cross cheque is issued by Provincial or Federal Government to an individual or big firm, that firm or individual will present to his bank, bank will hand over that check to NIFT which will bring that cheque to PAU clearing section. Most of the transactions are carried through this process and the major source of transferring funds.

If entire particulars are correct and properly verified then checque will be passed as under

Cheque of amount Rs.40, 000 by OG- 1,2

Cheque of amount Rs.40, 000 above by OG- 1 and ACM (PAU)

Type of Account Its deals with the fallowing types of accounts.

Central-I ( Non- Food)of Account Its deals with the fallowing types of accounts. Provincial-I ( Non- Food) Provincial-II (Food)

Provincial-I ( Non- Food)with the fallowing types of accounts. Central-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway

Provincial-II (Food)of accounts. Central-I ( Non- Food) Provincial-I ( Non- Food) Provincial-IV (District Govt.) Railway C-3 Page

Provincial-IV (District Govt.)types of accounts. Central-I ( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Railway C-3 Page

Railway C-3Central-I ( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Page 18 of

1.

TRANSFER

TRANSFER PAYMENT PROCEDURE

RECIEPT OF CHEQUE/ CHECKING PREPARATION PAID WHOLE RECIEVING OF OF RECIEPT SCHEDULE INSTRUMENT PROCEDURE
RECIEPT OF
CHEQUE/
CHECKING
PREPARATION
PAID
WHOLE
RECIEVING
OF
OF RECIEPT
SCHEDULE
INSTRUMENT
PROCEDURE
VOUCHER
INSTRUMENT
& DELIVER
MARKING
SEND TO
AT PAU
AT
OR
TO DAU
TREASURER
INFORMATI
SCURITNY
ON DESK

TRANSFER RECIEPT PROCEDURE

PREPARATION INPUTTING/ DIRECTLY TICKING OF DISPATACH DEPOSITED ON WITH ABSTRACT TO AUTHORIZA BY BANK COUNTER
PREPARATION
INPUTTING/
DIRECTLY
TICKING
OF
DISPATACH
DEPOSITED
ON
WITH
ABSTRACT
TO
AUTHORIZA
BY BANK
COUNTER
CHALLAN
VOUCHERS
TREASURER
TION
TO DAU

Clearing Receipts and Payments

Cheques are delivered to PAU by NIFT. When a cross cheque is issued by Provincial or Federal Government to an individual or big firm, that firm or individual will present to his bank, bank will hand over that check to NIFT which will bring that cheque to PAU clearing section.

Clearing house will check following things;

Clearing Stamp of Commercial Bank

Crossing Stamp

Endorsement Stamp of bank to take all risk on themselves

District Account officer signature will be verified

Endorsed seal of account office

Tally the amount and name with schedule provided by account office.

If entire particulars are correct and properly verified then checque will be passed as under

Cheque of amount Rs.40, 000 by OG- 1,2

Cheque of amount Rs.40, 000 above by OG- 1 and ACM (PAU)

Type of Account Central-I ( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3

( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3 Page 20
( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3 Page 20
( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3 Page 20
( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3 Page 20
( Non- Food) Provincial-I ( Non- Food) Provincial-II (Food) Provincial-IV (District Govt.) Railway C-3 Page 20

CLEARING

CLEARING PAYMENT PROCEDURE

INPUTTING/ DESPATCH AUTHORIZAT BANK TICKING SCURITNING ABSTRACT VOUCHERS CHEQUE ION OF INSTRUMENT PREPARATIO
INPUTTING/
DESPATCH
AUTHORIZAT
BANK
TICKING
SCURITNING
ABSTRACT
VOUCHERS
CHEQUE
ION
OF
INSTRUMENT
PREPARATIO
TO
PRESENTED
INSTRUMENT
& AFTER
N
RESPEFTIVE
BY NIFT
VERIFICATION
PASS WITH
TREASURER
LIMIT
INPUTTING/ DEPOSITED TICKING ABSTRACT COLLECTION DISPATCH TO THROUGH WITH VOUCHERS AUTHORIZATI BY NIFT
INPUTTING/
DEPOSITED
TICKING
ABSTRACT
COLLECTION
DISPATCH TO
THROUGH
WITH
VOUCHERS
AUTHORIZATI
BY NIFT
TREASURER
BANK
CHALLAN
TO DAU
ON

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

Administration Department (AD)

Report to Administration Department (Head Office Karachi)

OUR OBJECTIVES Our objectives to visit the Unit are as under;

Importance or role of Admin Department in State Bank of Pakistan

Study the operations and functions of Administration Department

Its structure and nature of responsibilities

Check out the procedures and impediments in their procedure

Check out the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Department

DIVISIONAL STRUCTURE OF ADMINISTRATION DEPARTMENT

ADMINISTRATION DEPARTMENT
ADMINISTRATION
DEPARTMENT
OF ADMINISTRATION DEPARTMENT ADMINISTRATION DEPARTMENT STAFF BENEFIT UNIT STAFF MATTERS UNIT MEDICIAL UNIT Page
OF ADMINISTRATION DEPARTMENT ADMINISTRATION DEPARTMENT STAFF BENEFIT UNIT STAFF MATTERS UNIT MEDICIAL UNIT Page
OF ADMINISTRATION DEPARTMENT ADMINISTRATION DEPARTMENT STAFF BENEFIT UNIT STAFF MATTERS UNIT MEDICIAL UNIT Page
OF ADMINISTRATION DEPARTMENT ADMINISTRATION DEPARTMENT STAFF BENEFIT UNIT STAFF MATTERS UNIT MEDICIAL UNIT Page
STAFF BENEFIT UNIT
STAFF BENEFIT
UNIT
STAFF MATTERS UNIT
STAFF MATTERS
UNIT
MEDICIAL UNIT
MEDICIAL
UNIT

ADMINISTRATION DEARTMENT

This is the administrative department of State Bank of Pakistan. under;

Its roles are as prescribed

Role of Administration Department Its role is only related to the dealing in al employee related issues. Administration Division

exists for the purpose of implementing policies relating to;

Dealing in all staff matters

Providing of medical facilities

Procurement

Salary/Advances

CR&D

Scope of Administration Department

The scope of that Unit is very wide and it is very important for the employees of State bank of Pakistan.

It ensures smooth functioning of the office by proper allocation of all resources

Maintaining Internal Bank Security

Matters of employee satisfaction

Beneficent for the employees of SBP

1.

Staff Matters Unit

Deals with the cases of transfer/posting

It also deals with disciplinary matters.

Matters relating to recruitment in SBP (BSC) are also handled such as the formalities of assurance bond, secrecy bond, fitness certificate.

Staff is promoted on the grounds of Point Based System (Appraisal).

Seniority List and Grant of Annual Merit Increase is prepared yearly to examine who have retired and who have been transferred to other offices

Cases of retirement, dismissal, resignation and death of the employees are also examined. Incase of death, all dues of employee are paid to the legal heirs by the SBP after deducting the liabilities

Sanctioned / Working Strength of the Office is also maintained.

Leave record of all the employees is also maintained in the system Recreational leave is must for the employees for continuous 15 days and he is paid half of the monetized salary for the RL.

Leave Encashment is also granted to employees on the basis of leave record

Staff Benefits Unit

Role of Staff Benefits Unit

This section deals with following activities:

Payment of salaries

Payment of conveyance charges/overtime

Education allowance and other payments

Making various recoveries like HBA, GP Fund and other Advances, Taxes etc

Preparation of Monthly/Quarterly/ Half yearly / Annual statements of different accounts

Sub-Sections

Salary section

Pension section

Loan & Advances section

Salary Section

Payments of Pension/Benevolent Fund

Traveling and Daily Allowances are paid to the employees

Monthly salaries, Remunerations for permanent, probationary, contractual employees are prepared

Cases of marriage grant / funeral expenses (both Rs.20, 000/-) for employees are examined here

There are two type of salary structure i.e. Officer Grade and Non-Officer (clerical and non clerical) There are three parts of salary slip:

Paymentand Non-Officer (clerical and non clerical) There are three parts of salary slip: Deduction Net Payment

Deductionand Non-Officer (clerical and non clerical) There are three parts of salary slip: Payment Net Payment

Net PaymentGrade and Non-Officer (clerical and non clerical) There are three parts of salary slip: Payment Deduction

Payments

It includes;

Monetized Salary

Education Allowance ( Clerical and Non-Clerical, Rs.500)

Telephone Allowance (OG-2 Rs.662 & for OG-3,4 Rs.1124)

Deductions

Income Tax (It will be charged if Taxable Income is more than Rs.300,000)

EUF(Employee Union Fund, Only Member of union, Temporary nature)

BF (Benevolent Fund is deducted from Rs.50 to Rs.250 from permanent employees; amount of BF varies according to monetized salary. Amount equal to employee contribution is also contributed by bank)

GTA (Group Term Insurance), it is charged from both contractual and regular

employee’s, its value varies according to monetized salary, deductions are made on monthly bases and sent to Insurance Company, Rs.21 is contributed by bank for clerical & Non-Clerical If additional benefits are availed then GTA value will be higher)

GPF (General Provident Fund, Employee’s contribution 5% of monetized salary)

GPF advance (If the employee age is more then 50 years then 80% of balance in GPF a/c is allowed to encash and don’t need to pay back but if below the age of 50 only 50% portion of balance amount can be advanced and have to pay within 2 years

Regular recovery from salary

Net Payment = Total Payment Total Deduction

Pension Section

Payment of monthly pension is ensured for employee/family pensioners. Normal Retirement When employee will retire after 60 years he will obtain following benefits. 50% of GPF, 50% will be restored and will be paid at the age of 75 years. He is provided option to take Medical encashment in lump sum or 10 times of monetized salary. If he wants to avail gratuity then he will be paid in following way Gratuity = Years of service × Monetized salary

Early Retirement (Above 55 years and below 60 years)

50% of GPF and 50% will be restored and paid at the age of 75 years.

Employee has the option to either retain medical facility or avail medical encashment.

He will avail leave encashment facility 730 days

Termination of Services at Employee Option

50% of GPF and 50% will be restored and paid at the age of 75 years

Leave encashment is provided for 730 days (730*monetized Salary/30)

Medical encashment must be availed which is 10 monetized salary

He can avail BF Rs.4000 max per month for 15 years. He has option to get it lump sum or monthly basis

Medical facility is not provided.

Family Pension If employee dies after retirement then his/her dependents will receive his/her pension.

Dependent:

Dependent will be the following persons.

Wife of employee

The Eldest child of employee either daughter or son.

Pension for wife is BF along with pension but boy and girl will only get pension.

Age Limit

Son can get pension till the age of 21 but daughter can get till marriage

Wife can get the ¼ of pension along with BF, but if wife has died then eldest child will get ¼ of pension without BF

When one child has passed the age of 21 years in case of boy and married in case of girl then next eldest child will get the pension and so on

If a person has two wives then 50% will be given to each of them. If wife re-marries then she will not be entitled to get pension

Loans and Advances Section:

Types of Advances

Staff Loans in respect of;

House Building

Motor Car

Computer Loan

Personal Loan

To ensure removal of objections if any and resubmission of Staff Loans cases for sanctioning

Original title documents of properties against loan paid to the employees are also maintained.

GPF Non refundable advance is also granted to employees.

Medical Unit

Role of Medical Unit

Payment of Bills/fees to Specialists, Suppliers, Hospitals and Pathological Laboratories

Preparation of Requisition and Blanket Purchase Agreement of Medicines for purchase of Medicines for Bank’s Dispensary

Reimbursement of medical claims of employees

Deal with the cases of Medical Facilities transferred to and from other offices

Stakeholders Internal Stakeholders

a. Employees of State Bank of Pakistan External Stakeholders

a. Hospitals

b. Consultants

c. Laboratories

d. Medical Stores

e. Medicine Distribution Companies

f. Authorized Suppliers

Medicine slip Medical facility is provided to employees and his/her dependents in the form of two doctors (ACMO/ LBMC) who are available during the office timings in the premises of SBP-BSC. Emergency slip If any medicine is not available at the bank dispensary then an Emergency slip is issued and the medicine can be taken from the authorized Medical store. Reference slip The doctor at bank can also refer the patient to another consultant, hospital or laboratory. They are referred to the enlisted consultants, laboratories and hospitals. The rates for these hospitals and consultants are approved HOK. Approved rates of HOK are intimated to the concerned specialist and they are affective for the period of 3yrs. Any changes in rates can be made only after 3yrs. The doctor issues Reference Slip with the name of hospital or consultant mentioned.

From Other Office The medical facility of Employees/dependents can also be transferred to other offices if the employee is not satisfied with the consultant/hospital of the same office. They are generated on receipt of request from employee & after CM approval. Purchasing The medicines are purchased from the authorized medical suppliers/distributors on monthly basis. The minimum and maximum quantities required for the medicines are updated and generated in MSS. The doctor can make any changes in the order according to requirements in, if required. This purchase order is checked and verified by the authorized persons (ACM, DCM and CM) and sent to the supplier. Three copies of Purchase Order are generated, 1st is for the supplier, 2 nd for the dispensary, 3 rd for the medical unit as a proof for making payment. The stock is available at the Main store of the bank and it is transferred to the Dispensary on the basis of daily indent. Further, the medicines received from Store are manually recorded in the Stock Register of Store. Daily indent is approved by the bank doctor. Availability of prescribed medicines at Dispensary is ensured against fortnightly indent. Stock

a. Receiving:

The items are received and are put in system. Only those items are received for which the order is made. If the order is short then bill is made for the received goods only. And if the

goods received exceed the order quantity then they are returned to the supplier. The supplier is credited after receiving goods.

b. Inspection:

The medicines are delivered to the main store of bank and they are inspected to make sure

that they are in required quantity, quality and order. The purchase order no. is checked and matched in system and expiry dates are also checked.

c. Delivering:

After receiving and inspecting medicines, they are sent to the Main Store and then to the

Bank Dispensary on daily indent basis.

Payment Procedure In making payments, the employee PIN, reference slip and consultant/hospital rates are checked, compared and verified. The signature of the employee and Bank’s doctor are also checked. The case is audited and the voucher is generated. The invoice is approved by the authorized persons in the hierarchy and forwarded for further processing. The distribution total and approved amount should be same to make payment. The Accrual Account is transferred to Accounts Payable account and all payments are made through A/P Module. Payment order/Bank Drafts are sent to concerned quarter as soon as received from Deposit Account Unit (DAU).

Taxes Income Tax Certificates to Suppliers of Medicines/Specialists/Hospitals/Clinics/Medical stores are also generated as when required. 6% withholding tax is applied if the services exceed from Rs.10, 000. 3.5% withholding tax is applied if retail goods amount exceeds Rs. 25,000. 1% withholding tax is applied if trade goods amount exceeds Rs. 25,000.

Employee Reimbursement The medical claims of employees are reimbursed by 100% incase of the enlisted consultants, laboratories and hospitals and 70% if the services are acquired from Shaukat Khanum Memorial Cancer Hospital and Agha Khan Hospital Laboratories.

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

Foreign Exchange Adjudication Division (FEAD)

Report to: Foreign Exchange Adjudication Department (Head Office Karachi)

OUR OBJECTIVES Our objectives to visit the unit are as under

Importance or role of FEAD in State Bank of Pakistan

Study the operations and functions of Foreign Exchange Adjudication Division

Its structure and nature of responsibilities

Check out the procedures and impediments in their procedure

Check out the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Division

DIVISIONAL

STRUCTURE

OF

FOREIGN

EXHANGE

ADJUDICATION

DIVISION

foreign Exchange Adjudication Department (HOK) Foreign Exchange Foreign Exchange Foreign Exchange Foreign Exchange
foreign Exchange
Adjudication
Department (HOK)
Foreign Exchange
Foreign Exchange
Foreign Exchange
Foreign Exchange
Adjudication
Adjudication
Adjudication
Adjudication
Division Faisalabad
Division Lahore
Division Multan
Division Sialkot

Foreign Exchange Adjudication Division

The division which deals with the cases related to the default foreign exchange dealings. When the foreign exchange is not brought with proper channel then adjudication court deal with those peoples and imposes penalties.

Role of Foreign Exchange Adjudication Division

Its roles are as prescribed under;

Dealings with fraudulent transferring of foreign exchange to other countries

Taking every single foreign currency for exports made by home country

Transferring of funds with judicial pressure to the home country

Facilitating importer & exporter

Prevention of lengthy procedures of traditional courts

Speedy trial

Foreign Exchange Adjudication Department

Foreign Exchange Adjudication court was established in1990 through an amendment in the

Foreign Exchange Regulation Act, 1947 Vide Finance Act made in the year1987 and court was established in1990. By this amendment some powers are delegated to adjudication court to deal with the cases of foreign exchange. FEAD formulate some rules in its manual with in the powers of Foreign Exchange Act 1947. Foreign Exchange Operations Departments is eligible to lodge complaints for the violations of the various sections of the FER Act, 1947.

Deals with violations of provision of FER Act,1947

Export violations

Import violations

Invisible receipts

Export Violation In case when foreign exchange receipt is overdue on exporter side within six months from the date of shipment or due date of payment whichever is earlier. (Violation of section 12(1) of Foreign Exchange Regulation Act 1947) Import violation

In case of import violation payment is made in advance but goods are not yet received within prescribed time period (Violation of section 4(3) of Foreign Exchange Regulation Act 1947)

Invisible receipts In case when invisible services are provided by any party and payment is not yet received For Example;

Consultancy

Software development

Tourism services etc

(Violation of section 10 of Foreign Exchange Regulation Act 1947)

Working of Unit Team

Adjudicating Officer

Reader to the Adjudicating Officer

Word Processing officer

Bailiff/ Messenger

Appointment Right of Adjudicating Officer

Governor of State Bank of Pakistan has the right to appoint the adjudicating officer of all offices where adjudicate Courts are established. Adjudication officer would be a minimum of OG-3 in the court.

Documents Required for the Complaint

FEOD sends a complaint to FEAD along with following necessary documents attached with complaint:

1. Original copy of E-form (Original/Duplicate)

2. Copy of GD -1 (Goods declaration Form) acquired from custom office

3. Bill of lading/Airway Bill/Railway receipt/Truck receipt

4. Copy of commercial invoice

5. Copy of V-16

6. Copy of CNICs of all proprietors including directors and all partners of accused party

7. Copy of short shipment notice (In case of less shipment)

8. All notices issued to accused party by FEOD

9. Any reply from accused party (If Any)

10. Certificate of Non-Pendency by FEOD

11. Attach all correspondence of Accused party with bank

12. Scrutiny Sheet submitted by AD to FEOD

Procedure for a Complaint

RECIEPT OF COMPLAINT Scuritny of Document REGISTRATION OF COMPLAINT BY READER OF THE COURT If
RECIEPT OF COMPLAINT
Scuritny of Document
REGISTRATION OF COMPLAINT BY READER OF THE COURT
If not complete back to FEOD with
objection , Memo & CCsend to Head office
PHOTOCOPIES OF FORM-E
PREPARATION & MAINTAINANCE OF FILE
Checklist of FEOD & FEAD
GETTING EXCHANGE RATES
D.F.A OF SHOW CAUSE NOTICE
FAIR SHOW CAUSE NOTICE TO ACCUSED
SERVICE OF SHOW CAUSE NOTICE TO ACCUSED
By Registerd Post & By Messenger
If not serviced then accused is located from different sources, after then published in Newspaper
If not serviced then accused is
located from different sources,
after then published in
Newspaper
In case of no response Ex-Party proceeding started & Case decided
In case of no response Ex-Party
proceeding started & Case
decided

File Closed

Ex-Party proceeding started & Case decided File Closed If serviced then whether the accused give satisfactory
If serviced then whether the accused give satisfactory answer or not If satisfactory then case
If serviced then whether the
accused give satisfactory
answer or not
If satisfactory
then case closed
Unsatisfactory
or
No response after service a summon will issued to exporter containing 1 st date of
No response after service a summon
will issued to exporter containing 1 st
date of hearing

`

Appearance of person in FEAD Whole case is briefed & explained to exporter, in a
Appearance of person in FEAD
Whole case is briefed & explained to
exporter, in a language which he
understands
If accused plead guilty then penalty imposed
on him
If accused plead guilty then penalty imposed on him If accused not p lead guilty then
If accused not p lead guilty then charge is framed & copy of orders supplied
If accused not p lead guilty then charge
is framed & copy of orders supplied to
him
Next date of hearing fixed for
Documentary evidence with witnesses
for his defense
On final hearing adjudicating officer
would give judgment

File Closed

Rules Regarding Penalties

Penalties are given to discourage detention of funds of Pakistan outside the country by SBP

Adjudication officer can impose maximum penalty of 5 times of the exported value

Authorized dealers can be penalized with amount of Rs. 5000 or Rs. 2000 per day from the day of default (In case of non / wrong submission of any information.

Appeal against penalty

The person can appeal in FER appellate board within 30 days from the date of judgment

Only 1 appeal can be filed against the decision of adjudicating officer

Recovery of Penalties

Copy of judgment sends to respective bank with the direction to debit his account. If sufficient amount is not available a recovery certificate is made and sends to District Officer Revenue.

Meeting with recovery officials.

Reminder are issued to the collector of the department

Suggestions

Penalties should be more tightened

Adjudication jurisdiction should be expanded to all FEOD operations

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

DEVELOPEMNT FINANCE SUPPORT UNIT

Report to:

Development finance support department

Scope of study:

Our objectives to study the unit

Development finance support unit

History of unit:

It was observed by SBP-BSC that provision of funds to remote sectors was not sufficient. Small scale entrepreneurs and deserving people were not aware of financing policies announced by SBP.

Development:

Development Finance Group (DFG)

by SBP. Development: Development Finance Group (DFG) DFSD (Head office Karachi SBP-BSC) 13 field units in

DFSD (Head office Karachi SBP-BSC)

Finance Group (DFG) DFSD (Head office Karachi SBP-BSC) 13 field units in SBP BSC (DFSU) Partner
13 field units in SBP BSC (DFSU)
13 field units in SBP
BSC
(DFSU)

Partner Departments

Agriculture Credit Departments

Micro finance department

SME finance department

DFG:

Then a group was formed to provide financial infrastructure for provision of financial services to all segments of society and all sectors of the economy. It establishes polices regarding financial issues. It is engaged in enhancing the capacity to catalyze and facilitate expansion of fina ncial services in un-banked or under-banked areas or sectors. DFSD:

This department was formed for the implementation of policies launched by DFG.

Objectives of DFSU:

To coordinate and interact with DFG and banks ( region wise & Branch wise)

To communicate the banks policies & schemes to stakeholders

To monitor banks performance towards achievements of their goals

Optimally target our resources to increase outreach of financial services in un-banked areas

To aware general public about the beneficial schemes regarding financing.

To disseminate the information to stakeholders

Functions of DFSU:

This unit performs functions in field given below. This unit encourages and develops stakeholders in following fields

Functions Agriculture Finance Microfinance SME finance Islamic Banking Finance
Functions
Agriculture Finance
Microfinance
SME finance
Islamic Banking Finance

Methodology:

Creation of Focus groups in relevant areas of each sector i.e. Financial institutions Academia Internal/External stakeholders

State Bank of Pakistan Internship Program 2010

Group: 3

Unit Report:

Currency Management Unit (CMU)

Report to Currency Management Department (Head Office Karachi)

OUR OBJECTIVES Our objectives to visit the Unit are as under;

Importance or role of CMU in State Bank of Pakistan

Study the operations and functions of currency management Unit

Its structure and nature of responsibilities

Check out the procedures and impediments in their procedure

Check out the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Unit

DIVISIONAL STRUCTURE OF CURRENCY MANAGEMENT UNIT

and suggestions for performance improvement of that Unit DIVISIONAL STRUCTURE OF CURRENCY MANAGEMENT UNIT Page 41

CURRENCY MANAGEMENT UNIT

Currency management Unit is the most important Unit of State Bank of Pakistan. Issuing of notes is the primary and basic function of State Bank of Pakistan. Central Bank has the sole right to issue new notes to the general Public.

Role of Currency Management Unit

Issue notes & Note Design

Monitor the performance of all commercial Banks relating to cash & currency

Forge note dealing & Disposal of notes

Forecasting that how much currency will be needed in coming year

Its directs the working criteria to commercial Banks of circulation of notes

Physical transferring of funds to chest Offices

Record of currency note with its denomination

Note exchange facilities and Anti-counterfeit measures

Withdrawal of Soiled Notes from circulation and their destruction

Issue and Distribution of Fresh Notes and Coins

Plays supervisory & regulatory functions regarding distribution of currency

Arrange Currency operation in the country & Impose penalties

Scope of Currency Management Unit

The scope of that Unit is very wide and nature of it is very important in the SBP.

Maintain & manage currency and its secured distribution

Currency is issued by that Unit and note exchange facility

Destruction of soiled notes under normal/special procedure

Issuing of fresh notes for commercial Banks/chests

Facilitate to the general Public by the exchange of defective notes & private awareness about anti-counterfeit measures

Withdrawal of old notes from circulation

Physical remittances are transferred from here

Remittances to SBP Offices

Remittances to chest Offices

Function as the government treasurer

Design rules, regulations, procedure and practices for currency management

Note Issue Section

One of the primary responsibilities of the State Bank is the regulation of currency in accordance with the requirements of business and the general Public. The overall affairs with respect to the issuing of notes are conducted through this department. Every province Office of State Bank of Pakistan has issuing Office according to 1956 act. Functions of Note Issuing Section

It maintains the documentation of currency notes issued to Offices of SBP

It kept the record of currency of commercial Banks & also issue currency notes drawn by commercial Banks as per required

Notes are issued to commercial Banks as per the volume of the funds and on the basis of their branches

Scope of Note Issuing Section

Note issuing scope is as under

Maintenance of good currency condition

Issuing note in replacement of soiled notes to avoid shortage of money

System of Issuing Notes

Fixed fiduciary system

Issuing note up to certain limit without reserves maintenance. 100% reserve after crossing limit.

Proportional reserve system

Keeping 20% reserve of every note issued to the general Public or chest Offices.

Reserve Maintenance Notes are issued by maintaining supply and demand requirement, in order to avoid inflation reserves are maintained in the form of;

Gold

Foreign Exchange

Government securities

Life Cycle of Bank Notes

Life Cycle of Bank Notes Page 44 of 57
Life Cycle of Bank Notes Page 44 of 57
Life Cycle of Bank Notes Page 44 of 57
Life Cycle of Bank Notes Page 44 of 57

Remittance Division

This division deals with the physical movement of funds between SBP Offices and other chest Offices. This is the physical movement of cash. In issue Office currency Officer authorize to pass the transfer of cash in case of excess cash in Office or shortage of cash in another Office. Role of Remittance Section

Overseeing Currency Operations; Supply, Distribution, Withdrawal, Verification and other applicable laws

Ensuring accurate booking/ reporting of various cash management Statements and taking corrective measures

Issuing of Policy/Instructions to all the Field Offices regarding management of currency

Need assessment and procurement of cash handling and counterfeit detection equipments in coordination with BSSD (SBP)

Its main function is to send a remittance of cash to different cities under its region:

Excessive funds collection from chest Offices

Scope of Remittance Section

This section scope is as under;

Secure way of transferring funds to the other field Offices

Physical movement of cash is made by that process

Large amount of funds are transferred by this division

Movement of funds to the chest Offices facilitated by that procedure

Chest Offices can safe their currency by sending excessive cash to SBP vault

Types of Remittances

Inward Remittance

Receiving notes from NBP chests/State Bank offices

Outward Remittance

When State Bank Office send their funds to NBP chests & SBP offices

REMMITANCE SENDING PROCEDURE

REMMITANCE SENDING PROCEDURE Page 46 of 57

NOTE CATEGORIES

Issuable Notes

Fresh notes

Re-issuable notes

Non-Issuable Notes

Soiled notes

Mutilated notes/defective notes

Claim notes

Charred notes

FORGE NOTE DIVISION

Promoting mass awareness activities among general Public about forged notes and clean note policy by suggesting different cost effective means and overseeing/coordinating field Offices activities in this regard. Analysis of international best practices on incorporation of security features and combating counterfeiting. Role of Forge Note Section Role of this section is as under;

This division form rules and regulations in treating forge note case

Improving security features of Bank notes to avoid forging

Deals with different forge notes and research on these copying procedures

Design rules to stop copying currency notes

Dealing with forge cases and court

Maintain updated information regarding various modes of forgeries detected in counterfeit notes/coins in circulation & provision thereof to law enforcement Agencies

FORGE NOTE FILING PROCEDURE

FORGE NOTE FILING PROCEDURE CASH MONITORING & EXAMINATION DIVISION Page 48 of 57

CASH MONITORING & EXAMINATION DIVISION

This Unit deals with two specific portions,

Cash monitoring

Clean note policy

Cash Monitoring

This section performs these tasks;

Supervision of currency

Make plan of whole year for visiting commercial Banks

Commercial Bank inspection regarding currency that are;

Commercial Banks are providing clean notes to general Public or not

Daily 2 Banks are being inspected without an intimation

New notes are issued to local peoples or not

Debit advice is send to commercial Banks incase there is shortage of cash in counting and voucher send to DAU

Checking whether clean note policy is implemented or not

Monitoring and On-Site Inspection of Cash Operations

Minimize Public complaints regarding

check the sorting of notes and supply of good quality notes to the general Public

Currency in good form is provided or not

Clean Note Policy

Clean note policy is to improve and enhance the condition of Bank notes those are in circulation in the market. In order to increase the circulation of fresh notes, it is also essential that soiled notes are withdrawn simultaneously from the circulation. For this purpose; BSC has introduced various changes in the systems and procedures related to currency management mechanization. BSC has taken a number of steps to improve the quality of Bank notes in circulation. Role of Clean Note Policy

Maintaining a fresh notes in the market

Improvements in the quality and availability of notes

Technological up gradation in currency verification and destruction process

CURRENCY VERIFICATION & DESTRUCTION SECTION

In view of the growing volume of notes in circulation and the limitations of existing system State Bank has authorize commercial Banks to accept defeated notes from Public and present at State Bank counter under special circumstances. And these notes are deal in that section.

Currency Management Processes

In this process good condition notes are separated from spoiled notes and forged notes. Spoiled and forged notes are sending to vault after receiving from general Public. Spoiled notes are carried for the period of six months and forged notes for one year for the tenders claim. After that period these are destroyed at a special destruction place where these are buried in the presence of DCM cash or authorized persons. Before burning and after counting of notes are made and treasury Officer count these with vault members.

burning and after counting of notes are made and treasury Officer count these with vault members.

.

CLAIM COUNTER DIVISION

The exchange facility over Bank's counters is available free of cost during the business hours of the respective field Office. The serial numbers of counters are displayed in Banking hall of each field Office where exchange facility is available. The mutilated/cut notes are exchanged by BSC as of grace under the “Note Refund Rules”. However, when the mutilated/cut note is not found payable under the Rules, the same is rejected and rejection advice issued to the renderer. The rejected note is retained by BSC and destroyed after six months.

Types of Claims

Two types of claims are made at this counter and paid to general Public without any charges.

Directly payable notes

Some notes issued at the counter are directly paid to the peoples fulfilling specific requirements.

75% portion not spoiled

Quaid-e-Azam picture un-teared

At least one number fully appeared

One or two pieces notes having both numbers

Oily, mutilated, defective notes and faint notes

Paid after specification or Claim

Some notes those are in more poor condition are send to next day claim and passed if they fulfill

these requirements otherwise send to vault and not paid back;

More then 50% portion available

Quaid-e-Azam picture un-teared

At least one number fully appeared

Fraudulent activity not made

Suggestions for Improvement

It was observed:

Public awareness should be created to attain the clean note policy

Public should be fully aware of how much cost should SBP bear on issuing a single note

Black marketing of notes should be fully discouraged in order to avoid it strict polices should be implemented

Remittance sending procedure should be changed due to much complicated steps are fallowed like railway time, police dealing and very long procedure of sending a remittance which cost much time wasting (Manual updating)

Forge note policies should also be stricted a large extent and SBP panel court should decide that what to do with these criminals because of court long procedure and corruption setup. Forge note criminals should not be tolerated

Forge note section should give suggestions to improve security features of notes by dealing different forge cases

Unethical use of currency should be strictly prohibited and these new rules should be developed like oil notes and other these are the misconduct of Public why they are not taking at safe places. Rules should be changed a little and little bit strictness should be taken to avoid large cost on new issuing notes and save government budget

Proper staff backup should be provided to every Unit in case of their absence, rotation or transfer. So the other employees can perform effectively at their post

Punishment in case of forge notes should tightened mores

State Bank of Pakistan Internship Report 2010

Group: 3

Unit Report:

Foreign Exchange Operations Department (FEOD)

Report to Foreign Exchange Operations Department (FSD)

OUR OBJECTIVES Our objectives to visit the unit are as under

To know the role of FEOD in State Bank of Pakistan

To Study the operations and functions of Foreign Exchange Operations Division

Its structure and nature of responsibilities

To Check the procedures and impediments in their procedure

To Check the flaws in their operational activities

Evaluation and suggestions for performance improvement of that Division

DEPARTMENTAL STRUCTURE OF FOREIGN EXHANGE OPERATIONS DEPARTMENT

FOREIGN EXHANGE OPERATIONS DEPARTMENT Imports/exchange Return section companies section Export section R &
FOREIGN EXHANGE
OPERATIONS
DEPARTMENT
Imports/exchange
Return section
companies section
Export section
R & D/DLTL section
Overdue section

Foreign Exchange Operations Department:-

The division which deals with the cases related to the foreign exchange dealings. When the foreign exchanges is brought into/ send out with proper channel the record of every transaction of foreign exchange is maintained with A.D. This division basically deals with the post facto checking of documentation of foreign exchange transaction carried out by an A.D during the month. This department deals with the Commercial foreign exchange only.

Role of Foreign Exchange Operations Department:

Its roles are as prescribed under;

Dealings with transferring of foreign exchange to other countries

It regulate foreign exchange with the Foreign Exchange Regulation Act,1947

Facilitation of exports by strict monitoring

Its directs the working criteria for foreign exchange transactions

Taking every single foreign currency for exports made by home country

Repatriation of export through FEAD orders.

Facilitating importer & exporter

Scope of Foreign Exchange Operations Department

Its scope is as prescribed under;

Creation of foreign exchange

Facilitation of exports

Facilitating importer & exporter

Types of Foreign Exchange

Commercial transaction

Non-Commercial

Non commercial foreign exchange consists of individual remittances of various nature.

Procedure:

State Bank of Pakistan has authorized certain branches of commercial banks to deal with foreign exchange. These branches are called Authorized Dealers (Ads). First of all, the exporter signs a contract with the importer abroad. Then he approaches any AD with the contract and obtains an E- Form from it. On this E- Form all the details of the contract are written. Then if AD is satisfied, after fulfillment of its requirements, it provides the exporters with requisite finance. Then AD submits all these documents to SBP through this Unit. SBP after checking all these documents provides finance to the AD. AD charges 8.5 % interest from the exporters out of which 7.5 % goes to SBP and 1 % goes to the AD.

There are five sections operating in this unit

Returns section

Imports / Exchange companies

Exports section

R & D section

Overdue section

Returns section:

All types of returns are received in this section. All authorized dealers submit their monthly F.E return to FEOD. In this section documents with Form-E and Form-I forms are separated. An initial checking is also made. Documents with E Forms are sent to the Export section and documents with I Forms are sent to the Import section.

Export Section

Documents with E Forms are checked and verified in this section. At the front side of the E

form following particulars is checked. 7digit code (this code is allotted by SBP), National Tax

Number, I D card number, Date of issue, Place of issue, Origin of Goods, Name and Address of AD, Name of Beneficiary Description of goods, Quantity, Invoice Value, Port of Shipmen, Date of shipment At the backside of the E Form following particulars are verified. Coding of transaction by AD/ SBP, Country to which exports are made, Country code, Commodity , Amount in figure , Amount of words, Quantity , Mode of transportation

Bill of Lading

If the exports are made through the Ship then the shipping company issues a bill of lading. In this bill, following particulars are verified. Booking number, importer’s name, description of goods.

Invoice

Terms and conditions, buyer, the name of vessel, description of goods, fix code, Fix code for each commodity in code book (different codes are assigned to chemical, textile, pharmaceutical and other deptt.) Letter about discrepancies is issued by SBP to the Ads and they are bound to correct these with in 2 to 3 days.

I- Form This form is used in case of imports. For this form 6 digits code is assigned with a prefix. In this form following particulars are present Indenter’s name, ITC No, 8 digits coding of commodity, origin of good, I D card number, Date of issue, Place of issue, Origin of Goods, Name and Address of AD, Name of Beneficiary, Description of goods, Quantity, Invoice Value, Port of Shipmen, Date of shipment. At the backside of the E Form following particulars are verified. Coding of transaction by AD/ SBP, Country to which exports are made, Country code, Commodity , Amount in figure , Amount of words, Quantity , Mode of transportation.

Over Due section

In case the export proceeds are not yet realized upto due date then after due date successes are reported to FEOD on statement V-16 show because notice is issued to the concerned party. Then if not any response then after 21st days final show cause notice is issued to bring proceeds which are not clear.

DLTL/R & D Cell

This cell was established to facilitate the exporters of the country. When an exporter exports some products, govt. gives subsidy to him to encourage exports from the country. Procedure There are some exporters associations in the country. First the exporter joins an association. The association issues a certificate. Exporter submits following documents to his AD Goods declaration form, E Form, Invoice, BL etc. AD will claim against all these documents. FEOD after verifying all these documents, credit DLTL to the AD and AD will credit it to the exporters. Eligible items for DLTL are; made ups, garments, and fabrics. 1, 2, 3, % of net value is given on fabrics, made ups, and garments respectively.

s