STATE BANK OF PAKISTAN

SBP BANKING SERVICES CORPORATION (BANK)

FAISALABAD

INTERNSHIP REPORT-2017

Submitted By:

Muhammad ali
Preface:
Internship is an integral part of our MBA degree. For the sake of internship the most
initial thing is to have a practical experience. This effort may lead a student to get a
practical experience if right organization is selected. During the internship, a student
comes to know practical knowledge. He/she learns what he has studied so far. As an
MBA student I have also done my internship at SBP-BSC Faisalabad Here I came to
know a different and very interesting experience of learning and working with people.
First of all I will tell you about Bank then operations of different departments.

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Acknowledgement:
To Him belongs the dimension of the Heavens and the earth, it is He who gives Life
and death and He has “power over all things.” (Al-Quran)
As I am serving SBP-BSC, Faisalabad already, I was a bit confuse to carry on this task
of writing internship report along with my real time job duties but my colleagues at
workplace showed a courteous behavior and helped me to manage time and encouraged
me to proceed. I am highly indebted to my instructor Mr.shariyar khalid who always
helped me whenever I got confused. I am also thankful to Mr. Naheed Iqbal, Mr.
Muhammad Usman, Mr. Muhammad Saleem Saqib and all other employees of SBP-
BSC Faisalabad who remained supportive and cooperative during the work. They also
helped me from the formative stages to the completion of this report.
My supervisor especially Mr. Haseeb Aslam and Mr. Mudassar, also provided me guide
lines for preparing this report. I would like to say thanks to all of them. May Allah bless
them all and succeed them in every field of life.

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Dedication:

I dedicate this stuff to my beloved and supporting parents and caring brother and sister.
A special feeling of gratitude is dedicated to my loving parents for their endless love,
support and encouragement. I also dedicate this work and give special thanks to our
staff officer Mr. shariyar khalid who helped me getting approval for this task without
which this task would have never been completed.

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 Table of Contents

Chapter 1: Introduction.

1.1 State Bank of Pakistan 6

1.2 Banking Services Corporation 7

1.3 Key Functional and Operational areas of BSC 8

1.4 SBP-BSC, Faisalabad Office 8

Chapter 2: Organizational Structure / Hierarchy. 9

2.1 Organizational Structure 9

2.2 Organizational Hierarchy 9

Chapter 3: Services / Operations at SBP-BSC, Faisalabad. 11

3.1 Public Accounts Unit 11

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 3.2 Deposit Accounts Unit 13

3.3 Currency Management Unit 15

3.4 Prize Bonds Unit 16

3.5 Export Re-finance Unit 17

3.6 Access to Finance Unit 20

3.7 Foreign Exchange Operations Unit 22

Chapter 4: My practical work 23

Chapter 5: SWOT Analysis of SBP-BSC, Faisalabad. 24

5.1 Strengths 24

5.2 Weaknesses 24

5.3 Opportunities 25

5.4 Threats 25

Chapter 6: Conclusion 25

Chapter 7: Suggestions & Recommendations 27

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Chapter 1: Introduction

1.1 State Bank of Pakistan

State Bank of Pakistan is the Central Bank of the country. While its constitution, as
originally laid down in the State Bank of Pakistan Order 1948, remained basically
unchanged until 1st January 1974 when the Bank was nationalized, the scope of its
functions was considerably enlarged. The State Bank of Pakistan Act 1956, with
subsequent amendments, forms the basis of its operations today.

Under the State Bank of Pakistan Order 1948, the Bank was charged with the duty to
"regulate the issue of Bank notes and keeping of reserves with a view to securing
monetary stability in Pakistan and generally to operate the currency and credit system
of the country to its advantage". The scope of the Bank’s operations was considerably
widened in the State Bank of Pakistan Act 1956, which required the Bank to "regulate
the monetary and credit system of Pakistan and to foster its growth in the best national
interest with a view to securing monetary stability and fuller utilization of the country’s
productive resources". Under financial sector reforms, the State Bank of Pakistan was
granted autonomy in February 1994. On 21st January, 1997, this autonomy was further
strengthened by issuing three Amendment Ordinances (which were approved by the
Parliament in May, 1997) namely, State Bank of Pakistan Act, 1956, Banking
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Companies Ordinance, 1962 and Banks Nationalization Act, 1974. The changes in the
State Bank Act gave full and exclusive authority to the State Bank to regulate the
banking sector, to conduct an independent monetary policy and to set limit on
government borrowings from the State Bank of Pakistan.

Like a Central Bank in any developing country, State Bank of Pakistan performs both
the traditional and developmental functions to achieve macro-economic goals. The
traditional functions, which are generally performed by central banks almost all over
the world, may be classified into two groups: (a) the primary functions including issue
of notes, regulation and supervision of the financial system, bankers’ bank, lender of
the last resort, banker to Government, and conduct of monetary policy, and (b) the
secondary functions including the agency functions like management of public debt,
management of foreign exchange, etc., and other functions like advising the
government on policy matters and maintaining close relationships with international
financial institutions. The non-traditional or promotional functions, performed by the
State Bank include development of financial framework, institutionalization of savings
and investment, provision of training facilities to bankers, and provision of credit to
priority sectors. The State Bank also has been playing an active part in the process of
islamization of the banking system.

1.2 Banking Services Corporation

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

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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.

1.3 Key Functional & Operational Areas of BSC:

1. Currency Management.
2. Foreign Exchange Operations and Adjudication.
3. Export Finance Scheme.
4. Payment and Settlement Systems.
5. Banking Services to the Government.

1.4 SBP-BSC, Faisalabad Office:

Among 16 field offices of SBP-BSC across the country, Faisalabad Office is the 3rd
largest office in terms of business activity.

Vision: Being part of the SBPBSC (Bank) develop an efficient, professionally skillful
human resource base capable to make proactive decisions, handle the emerging
financial problems of the country simultaneously providing quality services to the
stakeholders thereby complementing the State Bank of Pakistan in achieving its
objective.

Mission: To maintain an efficient currency management system, provide effective

banking services responsive to changing environment so as to command trust and
respect of our stakeholders.

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Chapter 2: Organizational Structure / Hierarchy

2.1 Organizational Structure

Structure of SBP-BSC, Faisalabad is very dynamic and state of the art. Different tasks
are being performed at specific units/divisions according to their nature. Faisalabad
field office has the extensions of different departments of head office Karachi in the
form of respective Units where operational activities are being performed. The
composition of SBP-BSC, Faisalabad can be broken down into following units.
 Deposit Accounts Unit.
 Export Finance Unit.
 Staff Matters Unit.
 Internal Monitoring Unit.
 Engineering Division.
 Foreign Exchange Operations Unit.
 Foreign Exchange Adjudication Unit.
 Prize Bonds Unit.
 Public Accounts Unit.

2.2 Organizational Hierarchy

State Bank of Pakistan, SBP Banking Services Corporation is being led by a Chief

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Manager which may be either and officer of Grade-5 or Grade-4. Currently, the Chief
Manager of SBP-BSC, Faisalabad is honorable Mr. Aamir Nazir Bhatti who is an
officer of Grade-4.
The Chain of command in exercise at SBP-BSC, Faisalabad is shown below:

Chief Manager

DCM DCM DCM

(Banking & Admn.) (Issue & Treasury, (Foreign Exchange
Export Finance) & PBU)
Unit In- Unit In- Unit In- Unit In-
charge Charge Charge ACM Unit In- Unit In-
charge charge charge
(DAU) (PAU) (Admn.) Cash
(EF) (FEOU) (PBU)

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Chapter 3: Services / Operations at SBP-BSC, Faisalabad.

3.1 Public Accounts Unit

This particular unit is responsible for Central, Provisional and District Government’s
Receipts and Payments. This unit is the backbone of the State Bank of Pakistan. Being
Banker to the government as its basic function, it plays a key role to perform central
bank’s obligations, collect taxes on behalf of government which is the most important
function of central bank.

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:
 Payment/ Receipt through cash.

 Payment/ Receipt through clearing.

 Payment/ Receipt through transfers.

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 to open
Personal Ledger Deposit Accounts in favour of the head of these Departments and
Army units. Such accounts are called Assignment Accounts. Cheques drawn on such
accounts cannot exceed certain assigned limits. Limits may b monthly or annually.

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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 of
this account is controlled by these officers. DAO issues an official cheque book to
operate these accounts. DOs/DDOs of these departments draw cheques on treasury to
operate these accounts.

Cash Payments & Receipts

This section deals with the direct receipts and payments of government accounts. In
PAU the payments will be made against Government accounts if entire particulars of
the cheques are correct & verified. Drawing and Disbursement Officer (DDO) or its
representative’s specimen signatures are already kept at PAU. If new DDO is appointed
then following documents along with its specimen signature card (SSC) has to be
provide to PAU.
 3 Signatures on SSC.
 Cover letter
 Attested photocopy of staff order
 Attested photocopy of charge report
 Attested photocopy of relieving report
 Attested photocopy of CNIC of DDO
In case of cash receipts, General public and Banks can deposit cash into treasury. Cash
is received with the challan form. It is entered in system and after proper verification
of it with the systematic report; if there is no mistake then vouchers are prepared.
Account of concerned bank is debited against the receipt. And hence amount is
transferred to concerned account.

Transfer Payments & Receipts

Cheque is presented on window along with Challan form/ Transfer form. Party receives
token from concerned officer, if cheques have been passed then instruments are sent to
District Account Office on the next day. In case of receipts from a commercial bank,

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bank deposits its cheque issued to it by State Bank of Pakistan along with challan form.
After verifying particulars of the cheque and the challans, concerned bank’s account is
debited and credit is given to respective govt. account.

3.2 Deposit Accounts Unit

SBP-BSC is the Banker’s Bank and is providing banking services to commercial banks,
employees of SBP-BSC and Govt. departments. Banks can open current accounts with
SBP-BSC where they can deposit their excess cash under safe custody. For such
deposits SBP-BSC does not charge any fee to the commercial Banks. They can deposits
re-issuable cash and soiled notes as well in their accounts. They can withdraw their cash
when they think there is shortage of cash for them.
All such deposits, payments and remittances of banks are dealt in DAU (Deposit
account unit) of SBP-BSC.

Functions of Deposit Accounts Unit

 Maintenance of current accounts of commercial Banks.

 Reconciliation of accounts.
 Payments to employees/vendors/suppliers of SBP-BSC.
 Financial reports preparation.
 Remittances facility to banks and govt. departments.
 Daily closing of Accounts of office.

Maintenance of Current Accounts:

All the main branches of commercial banks of the city maintain current account with
SBP-BSC and they can deposit money into the Bank for safe custody as the SBP is the
custodian of the money of the commercial Banks. Cash from banks is received on the
counter but heavy amount is not received except four banks viz., UBL, MCB, ABL &
HBL. The representatives of these banks bring cash in SBP-BSC that is kept separately
in vault temporarily and their accounts are credited. After counting if balance is short,
penalty is imposed on the bank.

Reconciliation of Accounts:

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Like any other organization, SBP-BSC has also a very diverse chart of accounts in
which accounts are categorized according to their nature, viz, expense, income, asset,
liability & others. One of the major functions of DAU is to reconcile those accounts
and find out any differences and ultimately suggest necessary adjustments.

Payments:
When it comes to making payments either to employees of SBP-BSC or vendors of the
banks in lieu of supplies made to the bank for medicines, equipment etc, DAU plays a
vital role. An invoice is received from concerned unit to DAU requesting to make
payment order in the name of particular person or company. DAU then makes payment
order and hands it over to the concerned unit for giving it to supplier. Supplier then
deposits this PO in his bank account which is ultimately cleared through NIFT.

Financial Reports Preparation:

As we know that all the accounts of SBP-BSC are reconciled at DAU so it is obligation
of DAU to prepare weekly, monthly, quarterly and annually financial statements of
SBP-BSC, Faisalabad. These financial statements include Balance Sheet and Profit &
Loss Account.

Remittance Facilities:
Being a banker’s bank and banker to the government, DAU provides remittance
facilities in the form of Online Transfers, Mail Transfers, Govt, Drafts, Bank. Drafts
etc. When commercial banks want to transfer their funds to some other city, the bank
approaches SBP-BSC with an application on prescribed form requesting to remit funds
through online transfer. A fee of Rs.1,100/- is charged on such funds transfer from
particular bank. As a banker to the govt. remittance facility is provided to authorized
signatories of govt. departments. Govt. Departments approach SBP-BSC with and
application to make Govt. Draft in the name of certain beneficiary. Remittance facility
is also provided to employees of SBP-BSC who wish to transfer funds from one office
to other SBP-BSC office. This remittance facility is known as Mail Transfer.

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3.4 Currency Management Unit

Currency management is the core function of SBP-BSC which is performed by

Currency Management Unit. Objectives of this unit are below:
 Issue notes and manage currency circulation.
 Monitor the performance of all commercial banks relating to cash & currency.
 Forge note dealing & Disposal of notes.
 Forecasting demand for currency.
 Physical transferring of funds to chest Offices.
 Record of currency notes with its denominations.
 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.

Policies are prepared by the Head Office Karachi (HOK) for the issuance of fresh cash.
Fresh cash issued by the SBP-BSC for the general public from their counters within the
Office and some specific branches are also chosen for the general public to issue the
fresh notes. Commercial Banks also get bundles according to their limit for their
account holders to facilitate them.
SBP-BSC HOK gives distribution plan for issuance of fresh notes. Sometimes they give
the policy and allot the limit to the commercial banks and other institutions and
sometimes the HOK gives the liberty to the field offices that they maintain limit for
Financial Institutions (FI). Variations may be made among city branches for fresh notes.
Counterfeit money is currency that is produced without the legal sanction of the state
or government; counterfeit government bonds are public debt instruments produced
without legal sanction, with the intention of "cashing them in" for authentic currency
or using them as collateral to secure legitimate loans or lines of credit. Forgery is
common in currency notes medium denomination.
This unit basically overseas all the operations that are related to supply, distribution,
withdrawal, verification and cancellation of currency. The main function of CMU is to
ensure that the optimum flow of currency should exist.

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3.4 Prize Bonds Unit

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 SBPBSC.

Prize Bonds are purchased by the public for saving purpose and winning prize money,
draw is very much fair in SBP-BSC, 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. It is central directorate national savings scheme.
SBP-BSC as the operational arm of SBP is issuing and making payments of Prize Bonds
to the general public on behalf of the Government. PBU basically deals not only with
the prize bonds but this section also deals with other government schemes.

There are three government schemes by which government collect debt from the public.
1. Prize bonds
2. DSC (Defense savings certificates)
3. SCC (Special savings certificates)

1. Prize bonds
Prize bond are basically a short term debt instrument. The new prize bond is initially
issued for the period of three months. As the currency, prize bonds are also printed in
the PSPC Karachi.
Procedure for the payment of Prize Bond
If the prize amount is up to Rs.18,500/- it can be encashed on the counter, but if the
prize amount is more than this, the prize bond holder have to fill up a claim process.
After filling the form PB 23-A the box office makes the entry in the system that
comprises of all the details stated above the prize bond holder. While entering the bond
no in system the box office confirm all the security precautions of the bond to make
sure that it I original and not be forged out. After confirmation from the PDO the bond
is again verified. If the claim is between Rs.93,000/- to Rs/185,000/- the claim period
is 10 days. If the claim is between Rs.185,000/- to 1 million the claim period is 15 days.
If the claim is between 1million and above the claim period is 20 days. If the claim of
the prize bond is more than 1 million the bond will be sent to PSPC for confirmation &
verification of that bond.

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Spoiled Prize Bonds:
There is a proper procedure to accept the spoiled bonds; the spoiled bonds are firstly
verified by the box officer. He may use the ultraviolet technology and concave glasses
to verify the originality of the bond. After that the bond is entered in a register and in
the system and then kept in vault from where they all are shredded.
Before the day of the draw, PB 35 IDs are filled which contain the information
regarding the prize bond numbers that are available in Vault and the other PB-35 in
favor of commercial banks. All of these the bonds are entered in the system of SBPBSC.
In case, if the draw of the prize is announced whose possession is with the field office
or the commercial bank, the prizes will be credited to the government accounts.

2. Special Saving Certificates (SSC)

These certificates are issued by the government for the period of maturity of 3 years.
The profit on the certificates can be collected after every six months. At the time of
issuance of the certificate a cheque book is given to the customer. The rate of interest
is fixed on these certificates and is supervised by CDNS (Central Directorate of
National Savings).

3. Defense Savings Certificates (DSC)

These certificates are long term investment scheme issued for the period of 10 years.
Profit is given on these bonds on annual basis.

3.5 Export Re-finance Unit

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

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(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) & part-ll (performance based).State Bank of Pakistan BSC
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.

1. Long term financing scheme (LTFF)

Long term financing facility loan is available for imports of machinery (locally
manufactured and imported). And this is granted for 3, 5, and then get up to 10 years.
Grace period up to 2 years for these loans are given. The basic purpose for granting this
loan is to boost up the exports by producing value added products through this imported
machinery.

2. Islamic export refinance scheme (IERS)

In case of conventional banks interest rate is set by IH&SME finance department of
State Bank of Pakistan. But in case of Islamic banking refinance, interest rate is
different for each month that is set by the head office of that bank keeping in mind their
fixed assets and as it is acceptable for SBP-BSC, Refinance unit. Interest rate is also
different from one Islamic bank to another.

3. Refinancing Facility for Modernization of SME

It was introduced to encourage the sponsors of SMEs to modernize their mills/units to
produce quality products.

4. Financing Facility for Storage of Agricultural Produce

This scheme was introduced to encourage Private Sector to establish Silos, Warehouses
and Cold Storages to store agricultural produce.

Required documents for Loan disbursement Procedure in part-1 

DP Note (demand promissory note)

 Form D (all detail & information about the exporter and bank

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  Overdue certificate (detail about EE-1 & export overdue

 Request letter from party (detail about new or old scheme)

Required documents for Loan disbursement Procedure in part-2

 DP Note (demand promissory note)

 Request letter

 Form EB (only place or amount is mentioned)

 Schedule to form EB

 Form DE-3

 UT-DE II

Rollover scheme

Exporters availing financing facilities under Part II of the scheme shall continue to
submit EF 1 statement duly verified by the respective offices of FEOD, SBP BSC
within two months from the completion of the financial year, as at present. However,
while applying for rollover of loans under Part II after completion of the initial 180
days or at an earlier date, exporters shall be required to submit a statement showing
details of shipments of eligible goods [as per Form EP ] to the extent of 70% of the
refinance already availed against which roll over is being sought. SBP BSC shall not
allow the rollover facility unless shipments to the extent of 70% of refinance availed is
established.

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.

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  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.

3.6 Access to Finance Unit

DFG (Development Finance Group) is the parent department of the DFSD and AFU.
The main objective of the DFG is to create or develop an inclusive financial system in
the country under the umbrella of SBP-BSC. The DFG make policies and strategies to
promote the financing schemes of the SBP. It is the way to strengthen the economic
growth of the county by creating awareness about the financial services and availability
of these services to the rural and lower income groups.

Objectives and Functions of AFU

 To promote formal financial lending through legal channels.

 To Coordinate and interact with DFSD and banks (region wise and Bank wise)

 To communicate the bank’s 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-BSC financing schemes
related to Focus groups

 Conducts research activities and carrying sectorial assessment studies to know

about the potential of every sector.

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  AFU liaison with Stakeholders and coordination with Regional chiefs and
General Managers of Commercial Banks regarding Development Finance
related matters.

It collects regional and/or branch-wise data from Data Warehouse or DFG

Departments for assessing banks’ performance as well as to study regional trends in
growth and development of SMEs, Micro and Rural Finance.

Monitoring & Evaluation

AFU monitor the targets of agriculture financing as per plans finalized by ACAC
(Agriculture Credit Advisory Committee). Firstly the Targets assigned were Mandatory
and those were finalized by SBP but now Indicative Targets are assigned to Banks by
the mutual negotiation between SBP and Banks
AFU monitor banks’ performance towards achievement of their regional and
branchwise targets of development finance using the BSC field offices. It also develops
and maintain province-, region- and district-wise development finance database. This
will help us optimally target our resources to increase outreach of financial services in
unbanked/under-banked areas/sectors.

Liaison with Stakeholders

AFU liaison with Stakeholders and coordination with Regional chiefs and General
Managers of Commercial Banks regarding Development Finance related matters.

Customer facilitation center

AFU also deals with all the Complaints of the customers regarding Commercial Banks.
These complaints are normally of misbehavior and excessive service charges. First of
all the customer will have to write an Application to SBP and further he will have to
attach the Copy of his CNIC. Then AFU will write the letter to the Regional Branch of
that Bank and refer that case to them and further impose them to solve that issue within
7 days. Then the Regional Branch will address to that Branch about which the complaint
have been filed. That branch will resolve the matter and get the

“letter of Satisfaction” from that Customer. Then the Regional branch will send that
letter to the SBP-BSC.

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Feedback of the Stakeholder
Feedback of the stake holder plays the key role for all the promotions and development
programs because it gives the knowledge how much people understand the concepts of
the financing schemes and financing facilities. Feedback from the stakeholders is also
important to amend and improve existing policies and formation of new policies for the
development of our priority sectors.

3.7 Foreign Exchange Operations Unit

This is the separate department in SBP but in field offices it is called FEOU (foreign
exchange operation unit) instead of FEOD (foreign exchange operation department).
This department deals with the cases of foreign exchange, sale purchase of foreign
currency and import export of foreign currency. This unit is facilitating importer and
exporter of their region and also doing strict monitoring of all transactions.

1. Returns
These are also called foreign exchange monthly returns. SBP authorize the Banks for
the dealing of foreign exchange/ currency. For this purpose only those commercial
banks can be nominated as authorized dealer which have license from SBP to perform
this operation. Companies other than commercial banks can also perform the operation
of foreign exchange by getting license from SBP. In the return section all A.D will have
to submit the bank statement of all imports/exports or sale or purchase of currency on
3rd of each month. In this department documents of E-form and I-form are separated
and sent to export or import section.

2. Exports/E-form
Document E-form is checked in this section. E-form consists of 7 digits and have green
color. Schedule attached against E- form is A-1/O-1. Statement S-1 is used for this
purpose. Following particulars are checked in this form: I.D card number, NTN
number, date of issue, place of issue, origin of goods, name and address of A.D, name
of beneficiary, description of goods, quantity, invoice, port of shipment and date of
shipment. This form is also duly signed with stamp of the bank.

3. Imports/ I-form:

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This form is used for imports. This form consists of 6 digits code and white color.
Schedule used against this form is E-2/P-2. Statement S-1 is used for this purpose.
Following particulars is checked in this form:
I.D card number, NTN number, date of issue, place of issue, origin of goods, name and
address of A.D, name of beneficiary, description of goods, quantity, invoice, port of
shipment and date of shipment. Other particulars which are present in E-form like goods
declaration certificate etc. are also checked against this form.

4. M-form/ Miscellaneous form

This form contains 6 digits code and is of red color. Schedule attached with this form
is E-4/P-4. This form is used when there is need to bring currency outside the country.
e.g. for medical check up to foreign hospital, to pay university fee in abroad etc.

5. Overdue section:
In the case the exports proceeds are not yet realized up to due date than after due date
notice is to be issued to the concerned party. Than if not any response after 21 days
final show cause notice is issued to bring proceeds which are not clear.

6. DLTL/R & D section:

This cell was established to facilitate the exports of the country. When an exporter
exports their goods this cell give subsidy to encourage the exports in the country.

Chapter 4: My Practical Work.

Since my joining of the SBP-BSC in July -2017 I have been posted in Deposit Accounts
Unit and have been offering my services in this unit. My actual task was to hold
scheduled banks section of this unit but due to shortage of staff, I have been running
the whole unit for about 3 months.

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Below is a list of my practical work at DAU.
 Issuing daily a/c statements to commercial banks.
 Importing/ posting of data from different units.
 Scrutinizing and record keeping of daily vouchers.
 Transmission of daily inter-company statements and Govt. Balances to head
office, Karachi.
 Holding operations of remittances desk.
 Making payment orders, bank drafts & govt. drafts.
 Accepting deposits of commercial banks.
 Supervising fund withdrawals of commercial banks.
 Issuing cheque books to commercial banks.
 Making necessary adjustments in system.
 Submitting daily reports to Chief Manager after reconciliation.
 Making batch payments in Oracle software.
 Originating and responding all the correspondences related to the unit.
In short, I have learnt so much in this unit. DAU has never been run by a single
employee in the history of SBP-BSC, Faisalabad which I have done and that is the
biggest achievement for me here.

Chapter 5: SWOT Analysis of SBP-BSC, Faisalabad.

5.1 Strengths
 Being an operational wing of central bank of the country, there is no competitor
of SBP-BSC.
 Absolute authority over operations of all the commercial banks.
 Broad spread infrastructure.
 Job security and marvelous financial remunerations to employees.
 Strong internal control to avoid risk.

5.2 Weaknesses

 I.T. equipment needs up gradation.

 Shortage of Staff.
 Lack of innovation in operational procedures.

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5.3 Opportunities

 SBP-BSC in collaboration with commercial banks can initiate such economic

activities which can eradicate poverty from the society.
 SBP-BSC can associate its technology with commercial banks to monitor their
activities continuously.
 It can help agricultural and industrial sector to gain easy excess to money
through commercial banks.

5.4 Threats

 Political instability and social insecurity can hinder operations of SBP-BSC.

 Excessive Govt. borrowings.
 Inflation caused by fake currency in circulation.
 Commercial banks are much more advanced than its regulator.
 Recruitment is very slow in contrast to staff which is retiring at a rapid pace.

Chapter 7: Conclusion.
SBP is a highly dynamic organization working since 1948. Its main function is to
regulate all commercial Banks and control the money supply in the country by making
effective monetary policies. SBP has subsidiary called BSC (Banking Services
Corporation) which is performing as field offices of the SBP. These field offices have
different units working like divisions of SBP. These units reports to their divisions
located inside the SBP.
As we all know that State Bank is the central bank of Pakistan and it controls all the
commercial banks which operate in Pakistan. It is a monetary body which monitors all
the commercial banks and maintains and manages the money supply in the country.

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The reason why I choose SBP-BSC is because it is the operational arm of central bank
and the biggest bank in Pakistan. There are many departments in this bank and one can
learn so many things in this organization.
Different units like DAU, PAU, RSU, FEOU, CMU & PBU etc. are working in SBP
BSC, Faisalabad. Each unit has different functions to perform. Deposit accounts unit
perform depository services to all commercial banks by taking care of their excess cash
as well as performing as Banker’s Bank.
Public accounts unit performing services to the government sector organizations. This
unit works as a banker to the government. All receipt and payments of public sector
organizations are dealt with at this Unit.
Foreign exchange operation unit basically look after the foreign exchange dealers e.g.
authorized dealers on monthly basis. It keeps proper check and balance on operations
of Authorized dealers in foreign exchange.
Refinance scheme unit is working for the encouragement of small exporters. By
increasing exports in the country it helps to stabilize and strengthen the economic
condition of Pakistan. This unit facilitates the exporters by giving low markup rates.
Main function of any central bank is to control the currency in the country because if
there is excess currency in the market there will be inflation. So, to control the money
supply is the major function of the SBP & SBP-BSC.
Prize bonds unit works on behalf of the government. Prize bond is short term debt
instrument which helps the government to get debt on low markup rates by the public.
Everything has its pros and cons likewise SBP-BSC has also some pros and cons but in
short SBP BSC Faisalabad is fraud less organization because of its strong internal
control & monitoring.
At the end of report some recommendations are also given based on my observation
and study about SBP-BSC Faisalabad.

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Chapter 8: Suggestions & Recommendations.

 In my opinion there should be latest technology match with the other

commercial banks. By utilizing latest technology, SBP-BSC can continuously
monitor activities of commercial banks.
 Workplace needs interior renovation to separate different units from each other
which at the moment seem alike.
 Performance Management System needs review as most of the employees are
dissatisfied due to forced mechanism of performance appraisal.
 Air Conditioning of the building is not up to the mark. There should be same
level of temperature at all the floors of the office.
 Recruitment should be conducted on emergency basis so as to accommodate
shortage of staff which is resulting in overburden on all the employees.

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 SBP-BSC field offices are digitally interlinked with each other. This linkage is
much necessary with National Bank of Pakistan as NBP acts as a currency chest
of SBP-BSC.

THANK YOU…!

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