Project On State Bank of Pakistan

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STATE BANK OF PAKISTAN (BSC) FAISALABAD
Sr.
No.
Title
1.
Introduction
2.
Core functions of SBP-BSC
3.
Hierarchy of SBP BSC
4.
Refinance schemes unit
5.
Currency management unit
6.
On-site verification
7.
Prize bond unit
8.
Public accounts unit
9.
Foreign exchange operations department
10.
Foreign exchange adjudication department
11.
Access to finance unit
12.
Deposit account unit
13.
SWOT analysis
14.
PEST analysis
15.
Financial statement
16.
17.
Conclusion
Reference
Introduction
SBP is the central bank of the country since September 1948.The bank carries out his
functions under the powers derived from SBP Act, 1956.which has respective from
October 1948.
There are many functions which are performed by the SBP.
Provide the facility of saving and investment.

Provision of training facility to bankers.
Availability of credit to priority sector.
Playing an active role in the application of Islamic banking.
Regulate the issue of bank notes.
Keeping reserves.
Banker to the banks.
Responsibility to utilize the reserves of the country in productive way.
Policy making.
Monetary authority of the commercial banks.
Providing the traditional and development functions to achieve goals.
Lender of last resort.
Supervision of financial system.
Managing the public debt and foreign exchange.
Banking Services Corporation (BSC) set up in January 2002, is the subsidiary of the State
Bank of Pakistan and is entrusted with the task of currency management and operational and
administrative oversight of foreign exchange departments, export and other finance,
management of Government accounts and operational work related to Government
certificates. With the changing environment of banking sector, BSC has undergone
significant change. On one hand BSC has had to relinquish certain functions, it performed at
the time when both interest and credit and foreign exchange was rigorously regulated. On the
other hand, it has to
Reposition itself to the deregulated environment (while continuing to perform some old
functions such as related to Export Finance Scheme) and be equipped to deal with a
transformed Central Bank and banking system. The challenges posed by these changing
requirements have been phenomenal but BSC has been steadily shifting its goals and
objectives to align it with the new demands. Going forward, SBP is now working closely
with BSC to develop a strategy for its further transformation to assign a more relevant
Mission to it in line with the withdrawal of some of its old functions, consolidate the
organization, fully automate its services and introduce a new culture of change management
along with better enforcement of the performance management systems. Developing
adequate capacity and managerial skills along with better internal controls will be critical to
achieve the anticipated transformation.
Vision
Our vision is to develop the SBP BSC (Bank) into a strong and dynamic institution, equipped
with an efficient and professional human resource base, having the requisite technology and
fully capable of providing quality service to stakeholders, while complementing the State
Bank of Pakistan in achieving its objectives.
Mission
To provide reliable banking services to Government, financial institutions, public and to act
as an operational arm of State Bank of Pakistan
Core Functions of SBP BSC

1. Currency management.
2.
3.
4.
5.
6.
7.
8.
Banking services.
Foreign exchange.
Finance policies.
Public debts management.
Implementation of SBPs finance policies.
SBP development.
Open market operations.
Hierarchy of SBP BSC
Chief Manager
(C.M)
Deputy Chief Manager
(DCM)
Assistant Chief Manager
(ACM)
Administration
(OG-2)
Clarical Staff
(OG-1)
Departments of SBP BSC
Refinance Schemes Unit
Deposit Accounts Unit

Access To Finance Unit
Foreign Exchange Operations

Division
Foreign Exchange Adjudication

Department
Public Accounts Unit

Prize Bond Unit
Onsite Verifcation
Currency Management Unit
Refnance Scheme Unit
Overview
Exports play an important role in economic growth & development of a country. The export
finance scheme (EFS) was introduced in 1973 with the objective to boost up exporters by
providing Short term financing facilities to exporters through banks at concessional rates, for
exports of manufacturing goods specially value added products (polished rice, gloves,
fabrics, garments etc.) with the exception of basic & primary commodities/raw material as
mentioned in negative list. It operates in two parts via part- l (transaction based) & partll (performance based).State Bank of Pakistan (SBP) has been encouraging exports through
its various schemes, with the objective to make funds available to meet the short and long
term financing needs of the export oriented industries. Besides, schemes have also been
launched by SBP for Agriculture sector as well as for flood and war affected areas of
Pakistan. The schemes which are currently functional include
Long Term Financing Facility (LTFF).

Islamic Export Refinance Scheme (IERS).
Refinancing Facility for Modernization of SMEs.
Financing Facility for Storage of Agricultural Produce.
Export Finance Scheme (EFS) Part-I & Part-II.
Functions of refinance schemes Unit:
Grant seat+ EE1 (loan granted)

Repayment (with markup rate)
Scrutiny of shipment documents/fine/refund
EF1
Miscellaneous work.
Markup rate:
Currently, markup rate under EFS for the exporters stands at 9.4 % (in which 8.4% is the
share of State Bank of Pakistan and 1% spread is for Commercial Banks).
Structure:
Refnance
Scheme
unit
Part-1
Preshipment
Part- II
Postshipment
EFS PART-l
Part-l is a transaction based facility. The commercial banks provide export finance to the
exporters on case- to-case basis at pre-shipment/or post shipment stage against firm export
order/contract/LCs. The tenor of the facility is up to 180 days.
EFS PART-ll
Part-ll is a performance based facility. This type of loan is provided to the exporter
throughout the year. After expiry of the year exporter has to give the performance details.
In part-2, include two statements such as:

A. EF-1 statement:
In this statement SBP-BSC compares with the exporters last year borrowing with his
performance.it includes the shipments which were used only in part II loans. The
performance of the exporter has to 2 times of the loan that he has availed.
B. EE-1 statement:
In this statement SBP-BSC makes the exporters limit for next year.it is made from
the starting of the year. It includes both part-I and part-II shipments. The finance limit
is equal to the 50% of the exporters earning through export of eligible goods in the
preceding financial year.
Eligible Goods & Services under the Scheme:
All major value added commodities exported from Pakistan.

Software development, web hosting and website services, Medical/ Legal/ Insurance
and other transpiration services, Medical billing, data entry, back office processing,
engineering services and design, Network consulting, remote education, Animation,
Finance and accounting services, customer relationship services and customer
interaction etc.
Consultancy services of various sectors of economy where foreign earning is remitted
into Pakistan. Such sectors include medical, pharmaceutical, engineering,
accountancy, management, financial services, wholesale distribution and retail trade,
transportation, storage and communication, telecommunication services, educational
services and real estate consultancy services.

EFS facility can be availed for the exports of Gold Jewelry.
Local supplies against international tenders.
Supplies to Export Processing Zones.
Types of penalties:
Non-shipment
Short/Delayed shipment
Late/less repayment
Late submisiion of shipping
documents
Non-submission of EPRC
Mistake /misreporting in EPRC
Wrong
information/misreporting
Irregular shipments
Non-performance
Any defaulter by
banks/exporter
Exsess availment of loan
Types of
Fines
Currency Management Unit
Overview:
A department in which the management of currency is done is known as currency
department. To achieve the number of objectives this unit also focuses on the volume of
note/coins circulation. Claims of notes processing and destruction of the forged notes is also
done by this unit. Volume of notes in circulation and the deficiency of old notes also replace
by the fresh cash issue by the SBP BSC. In case of any complaint with respect to fresh cash
or any other cash counter this unit also takes action on complaint. CMU playing important
role in SBP BSC its main function includes issuing the fresh note to commercial banks,
sending and receiving remittances, monitoring and examination of cash in commercial banks
payments & receiving of clearly payable and claim notes.
Objective:Objective of visiting Currency Management Department is:
To get awareness about currency management function of SBP BSC.

To get knowledge about promoting and creating clean note policy
Recognizing genuine currency notes
Know about banknote security features
How to spot a counterfeit
Scope:A core function of currency management unit is:
Issuance and distribution of fresh notes and coins.

With drawls of soiled notes from circulation and their destruction.
Note exchange facilities.
Anti-counterfeit notes measures.
Role of Currency Management Unit:
Issue notes and managing its circulation.

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
It directs the working criteria to commercial Banks for 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
Structure:
Currency
managme
nt unit
Remittances
Cash monitering and
examination unit
Fresh Cash issuance
Forged notes processing
Claim counter/Clearly payable
notes
On-site Verifications
3
Introduction:
Onsite inspection is basically the function of Export Finance Unit. The scrutiny of documents
to be submitted by exporter will be done by the concerned bank. The onsite verification
team of SBP BSC and inspectors of Banking Inspection Department or any other authorized
officer of the State Bank of Pakistan shall examine the cases of finances of the bank under
the Scheme, while making a regular or special inspection of a bank.
On-site Verification:
Onsite verification is done via teams and schedule decided by SBP HOK. Visits are
done annually (any fiscal year).
The onsite examination team verifies and checks all the documents on which the loan
has been refinanced already
After the visit the team whose team leader is ACM made the onsite verification
report, which contained all the irregularities, misreporting, late shipment/short
shipment and details of fine.
Prize Bond Unit

4
History
The bank is responsible for the management of the public debt. The working related to issue,
Supply, Sale, Encashment and handling of prize bonds. Holding draws thereof and other
saving instruments of federal government was transferred to SBP-BSC
Objective:
The purpose behind visiting Prize Bond Department is:
To understand the basic purpose of issuing Prize Bonds.

To understand how prize bonds are issued to general public.
To know how lucky draws are conducted.
How the amount of prize money is claimed.
To understand different National Saving Schemes launched by Government.
Purpose:
Collection of funds for the government from general public.

Promote saving habits in the general public.
Economic or social development is also one of the purposes of Prize bonds issuing.
Prize Bond:
Prize Bonds are purchased by the public for saving purpose and winning prize money, draw
is very much fair in SBP, because of its fairness in its draw procedure it has heavy sale all
over the Pakistan. The issuance of Prize Bonds started in October 1960.it is the largest saving
scheme in Asia.
Denominations Early 1960

Rs.5, 10, 11
Denominations Early 1999

Rs.50, 100, 500, 1000, 5000, 10000, 25000
Current Denominations
Rs.100, 200, 750, 1500, 7500, 15000, 25000, 40000
Security Features:
These bonds are printed in the offset process on paper & would carry the following security
features.
In Paper:
Enlarge watermark
Micro-printed security thread

Invisible colored
Fiber. (stars, blinking dots)
In Printing:
Micro-printed tint in rainbow color

Guilloche patter
Visible fluorescent rosette
Invisible denomination print
Numbering in red fluorescent ink.
Multi-color background
A. Bond Issuance Process:

Issuance process of the Prize Bonds is as follows:
1).Printing & Supply of the National Prize Bond

2).Delivery Of Prize Bond By The Pakistan Security Printing Corporation
Limited
3). Receipt & Examination of Prize Bond
4). Sale of Prize Bond
Winning Prize Bond

Winning prize bonds are further divided into two parts.
Small prize money

Higher prize money
Small Prize Money
The prize bond whose wining value is equal to or less than 18500 is called small prize money
these prize bonds are deal by the cash department or payment of these prize bonds are made
at the same time at counter these include 3rd prizes of Rs100, 200, 750, 1500.
Higher Prize Money

The prize bond whose wining value is greater than 18500 is called higher prize money these
prize bonds are deal by the prize bond department or payment of these prize bonds are
required some procedure and payment not made in cash but transferred to claimant account
by drawing payment order. These include prizes of 1st and 2nd prizes of Rs.100, 200, 750,
1500 bonds and prizes of Rs.7500, 15000, 25000, 40000.
The validity period of the winning prize to be drawn is 6 years from draw after
that the person cannot claim the winning amount.
National Saving Scheme (Securities)

There are two schemes which are operated in SBP (BSC) these are:
I. Special Saving Certificates
II. Defense Saving Certificates
Objective
These schemes are introduced by Government to encourage the saving in the public and to
get internal finance for its projects.
Public Accounts Unit

Introduction
This particular unit is responsible for central, Provisional and District Governments
Receipts and Payments
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.
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 public Accounts Unit
Its structure and head of responsibilities
Check out the flaws in their operational activities
Evaluation and suggestions for performance improvement of that Unit
Scope of PAU
The scope of that Unit is very wide and nature of it is very important in the SBP.
Maintaining Accounts of government
Reporting their daily transactions to DAU
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 cannot be maintained. Mainly these are;
Receipts & payments of government

Gives net off all receipts & payments through SBP.
Key Role Of PAU

Payment on the behalf of Federal and Provincial Government.
Receipts on the behalf of Federal and Provincial Government.
To perform these roles PAU uses three methods which are as under:
1. Payment/ Receipt through cash.
2. Payment/ Receipt through clearing.
3. Payment/ Receipt through transfers.
Denomination Of Cheques
Green cheque color for federal government.
Orange cheque color for provincial government.
White cheque color for district government.
Types Of Govt. Accounts

1 - Drawing Account:
When an Officer of a Government Department is authorized to draw funds from
Bank without limit such an account is called Drawing Account.
Example:
NSO etc.
2- Assignment Account.
In case of certain Department, Accountant General Authorizes the bank is to open Ledger
Deposit Accounts in favor of the head of these Departments and Army unit are called
Assignment Account. Cheque draw in this account within the limit, limit may be monthly r
annually.
Examples:
GPO, Air force, Remote deposit account etc.
GPO assignment monthly and others are annually.
3- Personal ledger account.

A PLA is also a facility provided to a delegated authority to incur expenditures up to a
prescribed limit.
PLA is a ledger account maintained by DAO/TO.
Spending limit controlled by these offices
The DAO issue an official cheque book.
DOs/DDOs of these departments draw cheque on treasury.
Treasury officer then affixes his pay order and draw the same on SBP-BSC office.
Cash Payment Procedure

PRESENTING CHEQUE ON RECEPTION
TOKEN ISSUED AFTER SCURITNY

SCHEDULE VERIFICATION (FROM LIST OF RESPECTIVE DEPTT.)
ENTRY/INPUT
AUTHORIZATION
RECIEVE MONEY FROM CASH PAYMENT COUNTER
RECEIVING OF INSTRUMENTS FROM CASH COUNTER

TALLYING WITH SYSTEMATIC REPORT
PREPARATION OF VOUCHERS & DELIVERED TO DAU
Cash Receipt Procedure:
PREPARATION
INPUT/
DIRECTLY
CASH
ACCEPT
ALONG WITH
CHALLAN
FORM
CASH
DEPARTMEN
T
AUTHORIZATI
ON
TICKING
WITH
SYESTMATIC
REPORT IN
PAU
OF REPORTS
& ABSTRACT
VOUCHERS
TRANSFER
OF PAYMENT
TO
TREASURER
Clearing Payment Procedure
INPUTTING/
AUTHORIZATI
ON
&
PASS W ITH
LIM IT
BANK
CHEQUE
PRESEN
TED BY
NIFT
SCURITNI
NG OF
IN STRUM E
NT
Clearing Receipt Procedure
ABSTRACT
PREPARATI
ON
TICKING
IN STRUM E
N T AFTER
VERIFICATI
ON
DESPATCH
VOUCHERS
TO
RESPEFTIV
E
TREASURE
R
DEPOSIT
ED
THROUG
HBANK
ABSTRAC
T
VOUCHER
STODAU
INPUTTING/
AUTHORIZATI
ON
COLLECTI
ONBY
NIFT
TICKING
WITH
CHALLA
N
Foreign Exchange Operations

Division
DISPATCHTO
TREASURER
Introduction
The division which deals with the cases related to the foreign exchange dealings. When the
foreign exchanges is brought into or send out of the country then the record of the each and
every single transaction is maintained in this department. This Division is actually worked
under the EPD (Exchange Policy Department). All the Departments in different Field offices
report to FEOD-HOK which further reports to EPD. The reporting of data is done both
manually and electronically. Through Manual reporting AD report to FEOD while Electronic
posting through ITRS is done by Commercial Bank called Authorized Dealers. That
department work under following rules and regulations:
Foreign Exchange Regulation Act 1947
FE Manual 2001
Booklet of Instructions, 1989

FE Circular
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
Sections Of Foreign Exchange Operations Division
FEOD
Returns
Export
Overdue
DLTL
section
Miscelleneous
Import/export
Foreign Exchange Adjudication

Department
7
Introduction:
Foreign Exchange Adjudication Department (FEAD) is a court. These courts are made under
Adjudication & Appeal Rule 1988. Foreign Exchange Regulations (FERA) Act 1947 is the
basic frame work of FEAD. FEAD started working after 1988.
FEAD receives complaints from Foreign Exchange Operations Department (FEOD). These
complaints are related with exchange for overdue cases. Exports whose repatriation has
become due but proceeds not realized become overdue. Foreign Exchange Manuals limit for
realization of export proceeds is 180 days. These complaints are usually against the exporter
and sometimes against the authorized dealer for the non-realization of export proceeds
against goods exported.
Procedure For Lodging Complaints:

When bill becomes overdue and case is referred to adjudication, Foreign Exchange
Operations Department has a format of launching complaint:
Attach documents collected from AD

Attach notices sent to AD and exporter
Adjudication Process:
After receiving the complaint, show cause notice is issued to exporter or authorized dealer.
Then authorized dealer or exporter may or may not reply to the show cause notice.
If reply comes then there can be two situations:
Cause is satisfactory
Cause is not satisfactory
If cause showed by Authorized dealer or exporter is satisfactory then lenient decision is taken
at that time and no penalty is charged.
If cause mentioned by Authorized dealer or exporter is not satisfactory then party is called
through summon. Then the party comes and records his statements and asks for reasonable
time for the realization of export proceeds. FEAD provides him reasonable time. If
repatriation is made within reasonable time, FEAD takes lenient decision and absolves the
party. If repatriation is not made within reasonable time, FEAD takes decision against the
party and penalize him according to the penalty scale. FEAD forwards this decision to
district collector because he will collect the fine and deposit it with SBP BSC.
If authorized dealer or exporter does not respond to show cause notice or does not attend the
adjudication court then adjudication penalize the party according to ex-party decision.
Then case is closed after adjudication decision and penalties are charged to AD or exporter,
whoever is defaulter
Penalties Charged By Adjudication:

Penalty for Authorized Dealer: Its penalty meter is continuous. Rs. 5000 for first
day and Rs.2000 per day case outstands.
Penalty for Exporter: It is 5 times of export proceeds.
If exporter or authorized dealer is not satisfied with the penalties charged then he can file a
complaint against the charged penalty to challenge the adjudications decision with:
Foreign Exchange Regulation Applet Board, Lahore (or) Foreign Exchange
Regulation Applet Board, Karachi.
Usually the applet board returns the case to adjudication department for reviewing the
decision.
Adjudication Courts in Pakistan:
Karachi
Lahore
Faisalabad
Sialkot
Multan
3 courts
2 courts
1 court
1 court
1 court
Access to Finance Unit
Mission Statement
Our mission is to facilitate development of an inclusive financial system in the country
through effective monitoring of banks, awareness and information dissemination programs,
targeted research and surveys and linkages and consultation with all key stakeholders.
Vision Statement
Our vision is to transform into a dynamic field force having capacity to connect un-banked
and under-banked areas/sectors to the countrys financial markets.
Objectives and Functions of AFU:
To promote formal financial lending through legal channel.
To Coordinate and interact with DFSD and banks ( region wise and Bank wise )
To communicate the banks policies and schemes to Stakeholders
To aware general public about the beneficial schemes regarding financing
To disseminate the information to the stakeholders
Monitoring, evaluating and disseminating of SBP financing schemes related to Focus

groups
Conducts research activities and carrying sectorial assessment studies to know

about the potential of every sector.
AFU liaison with Stakeholders and coordination with Regional chiefs and General
Managers of Commercial Banks regarding Development Finance related matters.
Core Functions Of AFU
Focus Group Meeting

Biannual Meetings
Awareness Programs On Development Finance
Exhibition, Melas
Seminars & Workshops
Capacity Building Programs
Development Of Linkages With Academia
Major Sectors Focused by AFU

Major sectors that are focused by AFU for promotion are
Agriculture
SMEs
Islamic banking
Microfinance
AFU of SBP BSC (Bank) FSD focuses on all above sectors of all districts of Faisalabad.
Each focus group has its own stakeholders.
Research activities for four sectors

Research activities are done by AFU to measure the potential hidden in the relatively less
famous business sectors like
Citrus Farming in Sargodha Region
Handicrafts of Silawali
Furniture from Chinniot
Power loom Sector of Faisalabad
These research activities are performed in collaboration with universities and other institutes.
Deposit Accounts Unit

9
Introduction
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

It deals with commercial Banks
Provisions of loans for meeting time and demand liabilities to commercial Banks
(Refinance division of DAU)
It directs the working criteria of commercial Banks
Balances and stock reports preparation
Bank Accounts maintenance
Transferring of funds
Daily closing of Accounts of office.
Closing of Bank daily operations
Scope of Deposit Accounts Unit

The scope of the Unit is very wide and nature of it is very important in the SBP.
It is the large 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 balances 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 BSC (Bank) 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 of all receipts & payments through SBP BSC
Structure:
As per banking Manual-2013, following Units are functioning in D
Deposite
Accounts
Unit
Scheduled
Banks
Section
Clearing
Section
Foreign
Currency
Section
Remittances
Section
Miscellaneo
us Section
1. Scheduled Banks Section

Current Account section
Opening of Current Account in the name of Schedule Bank
Current accounts opening requirements:
1) Account opening form.
2) Specimen Signature card (S.S card).
3) SBP licensed and permission letter
4) Memorandum and articles of associations.
5) Certificate of incorporation.
6) Certificate of commencement of business.
7) Certificate of incorporation on change of name.
8) National Tax Number.
9) Officers special power of attorney.
10) List of directors.
11) Board resolution
12) Power of attorney in favor of president CEO
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
Statutory Liquidity Ratio

Commercial Banks are required to keep some fraction of their assets in the form of cash,
treasury bills or other approved securities. This is called Statutory Liquidity Ratio. Every
commercial bank (at Head Office) must have 5% weekly & 4% daily in form of Gold, Dollar
and approved Government securities on time and demand basis as SLR.
Principal Account
Principal accounts of every commercial bank are maintained at HOK. Head Office of
commercial bank maintains its accounts at SBP BSC HOK.
Subsidiary Accounts
Some branches of commercial Banks also maintain accounts at their regional Offices of SBP
BSC; their reserves are called subsidiary Accounts. If the combination of both the balances is
not fulfilling their reserve requirement then penalties must be imposed on them.
2. Clearing Section
After the establishment of NIFT Clearing system, the role of SBP (BSC) Offices has become
more important as all the transactions pertain to Current A/c of all the participating Clearing
Banks in the area are finalized at D.A.U.
3. Foreign Currency Section

In the cases of Foreign Governments and Institutions, instructions for opening current
accounts will be received by the office of the SBP BSC (Bank) from the Finance Department
State Bank of Pakistan. Head Office, Karachi.
4. Remittance Section
It facilitates the movement of funds from one place to another 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 BSC office to out station
Facilitative role for the flow of funds between various centers in the country
smoothly and efficiently.
Employee funds transfer
From employees of one BSC office to other office.
Types of Remittances
The following types of remittances are issued by the offices of the State Bank SBP BSC:
Remmittan
ces
Online
Transfer
Mail
Transfer
Bank Draft
Governmen
t Draft
For Banks
only
For
Employees
For
Employees
For Govt.
Departmen
ts
5. Miscellaneous Section
a)
b)
c)
d)
e)
f)
g)
Loan and advances:

Accounting Procedure of Overdrafts to Banks
Government Treasury Bills Issue
Settlement of Auction
Repo facility against Treasury Bills (3 Days Discounting)
Scheme of Advances against Pledge of Bills
Purchase of Demand Drafts
SWOT Analysis
SWOT analysis is an acronym that stands for :
strengths,
weakness,
opportunities,
And threats.
SWOT analysis is careful evaluation of an organizations internal strengths and weakness as

well as its environment opportunities and threats.
The overall evaluation of a company strengths, weaknesses, opportunities and threats is
called SWOT analysis.
In SWOT analysis the best strategies accomplish an organizations mission by:
1.
Exploiting an organizations opportunities and strength.
2.
Neutralizing it threats.
3.
Avoiding or correcting its weakness.
SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context, managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats. The goal is to then
develop good strategies and exploit opportunities and strengths neutralize threats and avoid
weaknesses.
1. STRENGTHS
Premier Institution
SBP-BSC in one of the premier bank of Pakistan that is responsible for regulation of banking
and monetary system of Pakistan since its inception. It provides some guidelines time to time
for proper working of financial and monetary system in Pakistan.
Agent to Government
The SBP-BSC performs additional services for government by providing loans and managing
the government accounts as well as the other banks.
Reserve custodian
SBP-BSC is privileged to hold the reserves of the whole economy no other bank is
authorized to hold the reserves except they can deal in reserves but the ultimate holder is
SBP-BSC. It is also responsible to manage and control the exchange rate in the country.
Employee Benefit
The employers at SBP-BSC are offered reasonable monetary benefit. Normally bonuses are
given. Employees also enjoy the interest free loans free medical care of family and insurance
of life. These serve as a benefit and competency for the bank and a source of motivation for
the employees.
Broad Network
The bank has another competency i.e. it has two subsidiaries one is the NIBAF and second
one is the BBP-Banking Services Corporation. SBP has 33 departments that are performing
their own separate functions.
Strictly follows Rules & Regulations

The employees at SBP-BSC are strict followers of rule & regulation imposed by bank. The
disciplined environment at SBP-BSC bolsters its image and also enhances the over all out put
of the organization.
Professional Competence
The employees at SBP-BSC here have a good hold on their descriptions, as they are highly
skilled Professionals with better training programs in business administration, banking,
economics etc. These professional competencies enable the employees to understand and
perform the function and operation in better way.
Healthy Environment
The working condition in the SBP-BSC Faisalabad is very good each and every employee
has done his work with full concentration and its office environment can be compared to any
multinational organization. There is canteen for employees that cover a large area.
LRC
SBP-BSC has its own training department known as Learning Resource Center(LRC) all the
training programs are held over their even the international seminars and meetings conducted
over there..
Online Network
The bank has the strength of being powered by the network of computers, which have saved
time, energy and would have lessened the mental stress, the employees have. This would add
to the strength that is powered by network of computers.
2. WEAKNESSES
Lack of Marketing Efforts
The bank does not promote its corporate image, services, etc on a competitive way. Hence
lacks far behind in marketing effort .A need for aggressive marketing in there in the era
marketing in now becoming a part of every organization.
Political Pressure
The strong political hold of some parties and government and their dominance is affecting
the bank in a negative way. They sometime have to provide loan under the pressure, which
leads to uneven and adjusted feeling in the bank employees.
Favoritism and Nepotism

The promotions and bonuses etc in the bank are often powered by seniors favoritism or
depends upon their wills and decision. This adds to the negative factors, which denominate
the employees thus resulting in affecting their performance negatively.
Uneven Work Distribution

The workload in SBP-BSC is not evenly distributed and the workload tends to be more on
some employees while others abscond away from their responsibilities, which server as a de
motivation factor for employees performing above average work.
3. OPPORTUNITIES
Electronic Banking
The world today has become a global village because of advancement in the technologies,
especially in communication sector. More emphasis is now given to avail the modern
technologies to better the performances. SBP-BSC can utilize the electronic banking
opportunity to ensure on line banking 24 hours a day. This would give a competitive edge
over others.
Micro Financing
Because of the need for micro financing in the market, there are lot of opportunities in this
regard. Now the time has arrived when the SBP-BSC must realize it and takes on step to
cater an ongoing demand and the Micro finance dept should device policies to strengthen the
micro finance network.
THREATS
Political Pressure by Elected Government
The ongoing shift in power in political arena in the country effects the performance of the
bank has to forward loans to politically powerful persons which create a sense of insecurity
and demoralization in the customer as well as employees.
Data theft
The bank is currently dealing from data theft and the present technology in Pakistan is not
that effective and others are very costly in providing a safe place on internet away from
domestic and international hacks which threaten the environment of the bank
Customer Complaints
There exists no regular and specific system of the removal of customer complaints. Now a
day a need for total customer satisfaction is emerging and in their demanding consequences
customer's complaints are ignored.
PEST Analysis
This is a macro environmental framework used to understand the impact of the external
factors on the organization and is used as strategic analytical technique. PEST stands for:
Francis Aguilar is referred to as the originator of this tool. He talked about ETPS
Economic, Technological, Political, and Social as the four important factors for Scanning
the Business Environment. Later Legal and Environmental factors were also added by some
analysts and thus evolved the term PESTLE Analysis.
1. Political
Starting with political effects on the working of State Bank of Pakistan (BSC), its
institutional structure greatly effect by the political forces which make it less independent as
a central bank should be. One of the boards of directors is from the ministry of finance which
influences the monetary decisions of the State Bank of Pakistan (BSC) resulting in instability
in the economy of Pakistan. Moreover the political instability in the country causes the
uncertainties in the decision making of the top management of the central bank of Pakistan.
2. Economical
The fiscal side pressure is causing the Bank to continuously manipulate its monetary policy
targets, which results in causing uncertainties in the decision making of the investors; it
brings also the price instability in the country. The more government will borrow from the
central bank in the shape of currency, the more will be the inflation rate in the country.
Besides inflation, the targeted growth rates of the economy set by the bank get effected due
to huge inflation rates. The current account deficit started to widen as export growth slowed
on account of the inappropriate exchange rate and poor competitiveness, while dependence
on uncertain external capital inflows.
3. Social
As the central bank is socially responsible for the best possible interest of the depositors and
to control the money supply intact according to reasonable inflation in the country. However
there doesnt exist any system to do a legal action against the central bank on the variance of
inflation rates due to its lack of independency.
4. Technological
Technology up gradation is always among the major focuses of the state bank of Pakistan. In
order to cope up with the best international practices applied by central banks all over the
globe. State bank is equipped with latest ERP functioning Globus and oracle programming
in order to record the economic data with lot more accuracy and efficiency, to minimize the
work load, to disseminate information timely and to minimize the wastage of time for
effective decision making.
Conclusion
State Bank of Pakistan is a unique financial institution in Pakistan as it is central bank of our
country as well as a regulatory authority. The efforts also continued during the year for
increasing the usage of information technology infrastructure for improving efficiency in day
to day operations and discarding unnecessary manual registers/ statements which could be
generated automatically by the system (Globus Banking Solution). To improve coordination
between IT support team of ISTD and end users X and also to promptly resolve system
related issues, the System and Procedure Units (SPUs) were established during the year at
BSC Head Office Karachi (HOK) and field offices. The SPUs have also been assigned the
business continuity and disaster recovery planning function. The creation of SPUs thus has
not only helped in increasing the system usage and improving the coordination with the ISTD
IT Support team but also enhanced the field offices capacity in system maintenance and
business continuity and disaster recovery planning. It also enabled field offices to channel
their efforts towards their core functional responsibilities, as the IT related issues are being
taken care of by the SPUs.
Business Process Reengineering (BPR) in BSC is closely linked with the introduction of new
technologies in the day to day operations. The introduction of Globus banking solution,
Oracle ERP applications and other in-house developed software have helped in reducing the
processing time of different transactions significantly. All manually prepared (paper based)
payment instruments including vouchers have since been replaced by system generated
instruments. Government Drafts and Bank Drafts are now printed through Globus banking
system at the field offices. A follow-up mechanism for outstanding issues has been
introduced and managed effectively through Letter Management System. Banking and Issue
Department Manuals have been thoroughly reviewed by the committees especially
constituted for the purpose; Medical Attendance Rules have also been reviewed
comprehensively.
Although these practices are running in the units but there is a need of training for the old
employees to get the optimum utility from the new technology.
References
http://www.agpr.gov.pk/Images/AccProcess.jpg
http://www.bankofcanada.ca/banknotes/
http://www.ecb.int/stats/html/index.en.html
http://www.sbp.org.pk/
http://www.sbp.org.pk/departments/accounts.htm
http://www.sbp.org.pk/departments/accounts.htm
http://www.sbp.org.pk/reports/annual/arFY10/Vol2/anul-index-eng.htm
www.google.com
www.sbp.org.pk
www.wikipedia.com

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STATE BANK OF PAKISTAN (BSC) FAISALABAD

Core functions of SBP-BSC

Hierarchy of SBP BSC

Refinance schemes unit

Currency management unit

Prize bond unit

Public accounts unit

Foreign exchange operations department

Foreign exchange adjudication department

Access to finance unit

Deposit account unit

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Provide the facility of saving and investment.

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Core Functions of SBP BSC

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Hierarchy of SBP BSC

Departments of SBP BSC

Refinance Schemes Unit

Deposit Accounts Unit

Foreign Exchange Operations

Foreign Exchange Adjudication

Public Accounts Unit

STATE BANK OF PAKISTAN (BSC) FAISALABAD

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Long Term Financing Facility (LTFF).

Functions of refinance schemes Unit:

Grant seat+ EE1 (loan granted)

STATE BANK OF PAKISTAN (BSC) FAISALABAD

In part-2, include two statements such as:

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Eligible Goods & Services under the Scheme:

All major value added commodities exported from Pakistan.

services and real estate consultancy services.

STATE BANK OF PAKISTAN (BSC) FAISALABAD

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Currency Management Unit

Objective:Objective of visiting Currency Management Department is:

To get awareness about currency management function of SBP BSC.

Scope:A core function of currency management unit is:

Issuance and distribution of fresh notes and coins.

Role of Currency Management Unit:

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Issue notes and managing its circulation.

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Prize Bond Unit

STATE BANK OF PAKISTAN (BSC) FAISALABAD

To understand the basic purpose of issuing Prize Bonds.

Collection of funds for the government from general public.

Denominations Early 1960

Denominations Early 1999

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Micro-printed security thread

Micro-printed tint in rainbow color

A. Bond Issuance Process:

1).Printing & Supply of the National Prize Bond

Winning Prize Bond

Small prize money

Small Prize Money

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Higher Prize Money

National Saving Scheme (Securities)