STATE BANK OF PAKISTAN - VARIOUS DEPARTMENTS (Contd.):Human Resources Department

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Management of Financial Institutions - MGT 604

Lecture # 10

STATE BANK OF PAKISTAN - VARIOUS DEPARTMENTS (Contd.)

Exchange Policy Department

(EPD) one of the core departments of the State Bank is responsible for overall stability of

the foreign exchange market and is engaged in the process of policy formulation and

implementation. It reviews on continuous basis, the existing rules and regulations, to

facilitate foreign exchange activities in the country. Foreign exchange business in Pakistan

is governed / regulated under Foreign Exchange Regulations Act, 1947 (FERA, 1947).

Exchange Policy Department is structured into three divisions namely:

1. Policy Division:

Policy Division is responsible primarily for dealing with policy matters in the areas of

export/ import transactions, issuance of Authorized Dealer's license, Foreign Exchange

Exposure Limits, Foreign Currency Accounts Scheme, Exchange Risk Cover Fee on

Medium & Long Term Loans, etc

2. Investment Division:

This division primarily facilitates implementation and compliance of policy of the

Government for investments in Pakistan and abroad. This is carried out by offering

feedback on matters of varied natures, reviewing and updating of investment related policies

and activities and operational management

3. Exchange Companies Division:

Policy formulation for establishing Exchange Companies & ensuring adequate framework

for licensing, operating, effective supervision & monitoring thereof are the prime

responsibilities of Exchange Companies Division. These activities are carried out in close

coordination with other the Field Offices of SBP-BSC and concerned government

functionaries etc. It also organizes training and development activities for the respective

financial institutions and concerned bodies.

Banking Policy & Regulations Department

Due to major fundamental changes in the scope and orientation of financial systems in

1990, and the subsequent need to put in place a more prudent regulatory framework to cope

with the changing conditions, Prudential Regulations were put in place first in 1992.

Since then, the Prudential Regulations have been reviewed many times and the latest

version relates to three different sets covering the areas of Corporate, SMEs and Consumers

financing.

Basic Purpose of Prudential Regulations

Prudential Regulations have been issued by State Bank of Pakistan to put in place a prudent

regulatory framework for ensuring safety and soundness of the financial system besides

protecting the interests of users of financial services.

Human Resources Department

Divisions of HRM Department

1. Compensation & Benefits Division

Management of Financial Institutions - MGT 604

2. Employee Relations Division

3. Human Resource Information System Divisions

4. Performance Management Division

5. Planning & Development Division

6. Recruitment Division

Information Systems & Technology Department

ISTD with its capabilities, methodologies, and experience aims at technological

advancement in SBP, focusing on solutions that intend to reduce operating costs, improve

end-user performance, and meet overall business goals. Success competitiveness in today's

marketplace requires extra effort centered upon ISTD's value to provide high-quality

solutions and services, effective communication, and smooth 24/7 operations.

Audit Department

The prime objective of audit department is to examine and evaluate whether the SBP's

frame work of risk management, control, and governance processes, is adequate and

functioning properly. In addition, the objectives of audit department include advising and

recommending senior management for improvements in internal control and risk

management systems. Audit Department is performing two types of functions i.e. Financial

& Operational Audit and I.T Audit. Currently, Audit has three dedicated teams for Financial

& Operational audit and one team for I.T audit. In addition to this, the Department has one

Compliance Cell and one Services Unit

Off-site Supervision & Enforcement Department

(OSED) is one of the newly created departments emerging in the wake of re-organization of

former Banking Supervision Department under recent SBP restructuring. OSED is

responsible for off-site supervision of the financial institutions coming under regulatory

purview of the State Bank of Pakistan (SBP). The department also ensures effective

enforcement of regulatory and supervisory policies, monitors risk profiles, evaluates

operating performance of individual banks/DFIs and takes necessary enforcement actions

against institutions for their non-compliance (with laws of the land and regulations put in

place by the SBP) as identified by, the inspection teams of BID during their onsite

examination, and/or by the supervisors of this department based on submitted returns,

interaction with financial institutions and market information. Currently, over 50 financial

institutions are supervised by the State Bank of Pakistan. These include banks,

Development Finance Institutions (DFIs), and Microfinance Banks & institutions.

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