Internship Report 2013

State Bank Of Pakistan BSC Faisalabad

STATE BANK OF PAKISTAN (BSC) FAISALABAD

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.Conclusion

17.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.VisionOur 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. MissionTo 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 BSC1. Currency management.2. Banking services.3. Foreign exchange.4. Finance policies.5. Public debts management.6. Implementation of SBPs finance policies.7. SBP development.8. Open market operations.Hierarchy of SBP BSC

Departments of SBP BSC

Refinance Schemes Unit 1OverviewExports 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) & part-ll (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:

EFS PART-lPart-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-llPart-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:

Currency Management Unit 2Overview: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 counterfeitScope:-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 penaltiesStructure:

On-site Verifications 3Introduction: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 4HistoryThe 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-BSCObjective: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 1960Rs.5, 10, 11Denominations Early 1999Rs.50, 100, 500, 1000, 5000, 10000, 25000Current DenominationsRs.100, 200, 750, 1500, 7500, 15000, 25000, 40000Security 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 Bond4). Sale of Prize Bond

Winning Prize BondWinning prize bonds are further divided into two parts. Small prize money Higher prize moneySmall Prize MoneyThe 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 MoneyThe 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 CertificatesII. Defense Saving Certificates

ObjectiveThese schemes are introduced by Government to encourage the saving in the public and to get internal finance for its projects.

Public Accounts Unit 5IntroductionThis 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 ObjectivesOur 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 PAUThe 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. Accounts1-Drawing Account:When an Officer of a Government Department is authorized to draw funds from Bankwithout 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

Cash Receipt Procedure:

Clearing Payment Procedure

Clearing Receipt Procedure

Foreign Exchange Operations Division 6Introduction

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 objectivesOur 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

Foreign Exchange Adjudication Department 7Introduction: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 exporterAdjudication 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 satisfactoryIf 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 3 courts Lahore 2 courts Faisalabad 1 court Sialkot 1 court Multan 1 court

Access to Finance Unit 8Mission 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 MicrofinanceAFU 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 sectorsResearch 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 FaisalabadThese research activities are performed in collaboration with universities and other institutes.

STATE BANK OF PAKISTAN (BSC) FAISALABAD

STATE BANK OF PAKISTAN (BSC) FAISALABAD

Deposit Accounts Unit 9Introduction 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 UnitThe 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 BSCStructure:As per banking Manual-2013, following Units are functioning in D1. Scheduled Banks SectionCurrent Account sectionOpening of Current Account in the name of Schedule BankCurrent accounts opening requirements:1) Account opening form.2) Specimen Signature card (S.S card).3) SBP licensed and permission letter4) 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 resolution12) 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 RatioCommercial 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 AccountPrincipal accounts of every commercial bank are maintained at HOK. Head Office of commercial bank maintains its accounts at SBP BSC HOK.Subsidiary AccountsSome 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 SectionAfter 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 SectionIn 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 SectionIt 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 RemittancesThe following types of remittances are issued by the offices of the State Bank SBP BSC:

5. Miscellaneous Sectiona) Loan and advances:b) Accounting Procedure of Overdrafts to Banksc) Government Treasury Bills Issued) Settlement of Auctione) Repo facility against Treasury Bills (3 Days Discounting)f) Scheme of Advances against Pledge of Billsg) 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 InstitutionSBP-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 GovernmentThe SBP-BSC performs additional services for government by providing loans and managing the government accounts as well as the other banks.

Reserve custodianSBP-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 BenefitThe 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 NetworkThe 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 & RegulationsThe 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 CompetenceThe 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 EnvironmentThe 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.

LRCSBP-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 NetworkThe 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 EffortsThe 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 PressureThe 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 NepotismThe 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 DistributionThe 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 BankingThe 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 FinancingBecause 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 GovernmentThe 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 theftThe 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 ComplaintsThere 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.

STATE BANK OF PAKISTAN (BSC) FAISALABAD

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. PoliticalStarting 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. EconomicalThe 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. SocialAs 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. TechnologicalTechnology 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