In State Bank of Pakistan, the head is called “Chairman” or “President” of the Bank. And after President there is Five Broad of Directors. SBP has Seven Departments which control the working of the Divisions, Wing, Section and Regional of the state bank of Pakistan.

1. 4/22/2016
Prepared By:
Azhar Hussain
ACADEMIC
REPORT STATE BANK OF PAKISTAN

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Table of Contents
Acknowledgment................................................................................................................................3
Executive Summary............................................................................................................................4
1. Introduction....................................................................................................................................5
1.1 History/Background ..................................................................................................................5
2. Overview of Organization ...............................................................................................................5
2.1 Vision.......................................................................................................................................6
2.2 Mission.....................................................................................................................................6
2.3 Core Values ..............................................................................................................................6
2.4 Goals........................................................................................................................................6
3. Organizational Structure..................................................................................................................7
4. Departments of SBP........................................................................................................................7
4.1 Deposit Accounts Dept..............................................................................................................7
4.2 Currency Management Dept.......................................................................................................8
4.3 Prize Bond and Saving Certificate Dept ......................................................................................8
4.4 Internal Monitoring Dept ...........................................................................................................8
4.5 Public Accounts Dept................................................................................................................9
4.6 General Services Dept.............................................................................................................10
5 Monterey
policy…………………………………………………………………………………………………………
………………………11
6. SWOT Analysis ........................................................................................................................11
6.1 Strengths.................................................................................................................................11
6.2 Weaknesses ............................................................................................................................11
6.3 Opportunities ..........................................................................................................................12
6.4 Threats ...................................................................................................................................12
7.State Bank of Pakistan — Vision-2020............................................................................................13
8. Pakistan forex reserves..................................................................................................................13
9. Suggestions &
Recommendations……………………………………………………………………………………………
…………14
10 .Conclusion .................................................................................................................................14

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11. References..................................................................................................................................15
Acknowledgment
All praise to Allah, the most merciful, kind and beneficent, and the source of all
knowledge, wisdom within and beyond my comprehension. He is the only ALLAH, who
can help us in every field of life. All respect and possible tributes goes to my Holy
Prophet Mohammad (SAW), who is forever guidance and knowledge for all human
beings on this earth.
I am greatly indebted to my learned teachers, who have giving us this report. This report
reflects the knowledge which I have gained from my valuable teachers.

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Executive Summary
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. It monitors all the
commercial banks and maintains and manages the money supply in the country.
The reason why I choose this bank is because it is the central bank and the biggest bank
in Pakistan. There is a large no. of departments in this bank and one can learn a large
number of things in this bank. There are many departments in this bank but the
departments in which are the main are public account department, deposit account
department, currency management department, internal monitory department, prize bond
and saving certificate deparment, general services department. Public account department
perform many operations. It collects and gives payments on behalf of government. It also
performs clearing. It receives checques or sends checques to NIFT for clearing purpose.
Prize bond department issues prize bond to general public. It controls the overall system
of prize bond and prizes I have in the city. General services department perform services
like employee salaries, employ loan, NIBAF, etc. It provides all facilities to general
public which it can to help or facilitate them.

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1. Introduction
1.1 History/Background
State bank of Pakistan is the central bank of Pakistan. It was established in 1948. Initially
state bank of Pakistan was entrusted with the task 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" (SBP order,
1948). The headquarters are located in the financial capital of Pakistan, Karachi with its
second headquarters in the capital, Islamabad.
In financial sector reforms of 1994 State Bank of Pakistan got full autonomy. “On
January 21, 1997 this autonomy was further strengthened when the government issued
three Amendment Ordinances. These changes 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” (Wikipedia,
2010). Currently its primary functions include regulating banking sector, maintenance of
public accounts, devising monetary policy, management of public debt, issuance of
currency notes, and maintaining inflation.
State Bank of Pakistan Banking Services Corporation SBP-BSC was established in 2002
in order to perform operational functions of SBP (SBP website). SBP-BSC is subsidiary
of State Bank of Pakistan having 16 offices in major cities of the country and its key
functional and operational areas include currency management, foreign exchange
operations and adjudication, export finance scheme, payment & settlement systems, and
banking services to the government. While State Bank of Pakistan performs the important
function of policy making, SBP-BSCs handle most of the operational areas (SBP
website).
2. Overview of Organization
As we all know that state bank of Pakistan is a nonprofit making organization. Its main
objective is to manage or maintain the currency supply in country. Increase and decrease
in money supply can create inflation or deflation in country, so these things should be
handled immediately and state bank is doing this. The mission and vision of SBP is as
under.

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2.1 Vision
To develop SBP-BSC into a dynamic and efficient organization equipped with requisite
technology and human resource capable of extending sustainable support to the State
Bank of Pakistan in achieving its objectives (SBP website).
2.2 Mission
To provide excellent banking and financial services to stakeholders besides ensuring
implementation of SBP policies in order to command their trust and respect.
2.3 Core Values
 Highest standards of Integrity.
 Institutionalizing teamwork and performance culture.
 Excellence in service.
 Advancement of skills for tomorrow’s challenges.
 Awareness of social and community responsibility.
 Value creation for all stakeholders.
2.4 Goals
To enhance profitability and maximization of SBP share through increasing leverage of
existing customer base and diversified range of products.
Excellence in Direction
Excellence in Growth
Excellence in Performance
Excellence in Management
Excellence in Achievement

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3. Organizational Structure
In State Bank of Pakistan, the head is called “Chairman” or “President” of the Bank. And
after President there is Five Broad of Directors. SBP has Seven Departments which
control the working of the Divisions, Wing, Section and Regional of the state bank of
Pakistan.
4. Departments of SBP
Following are various units at SBP:
4.1 Deposit Accounts Dept
Main functions of the Deposit account unit are;
1. SBP acts as a banker to banks. Commercial banks open their accounts with state
bank. There are accounts of 41 banks and these accounts are maintained at deposit
account unit.
2. Handles export refinance scheme.
Chairman
Deposit
AccountsDept.
Currency
Management
Dept.
Public Accounts
Dept.
Prize Bond and
Saving
Certificate Dept.
Internal
Monitoring
Dept.
General Services
Dept.
IT Department
President’s
Secretariat
Board of
Directors
Secretary Board
of Directors

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3. The facility of remittance of government payments is provided through this
department.
4. Account reconciliation.
5. Also facilitate public remittances and fee is charged for that whereas no fee is
charged from the government.
4.2 Currency Management Dept
Currency management cycle involves a wide range of activities including:
 Ensuring adequate supply of good quality notes across the country.
 Forecasting annual increase in currency demand.
 Timely placement of printing orders with Pakistan Security Printing Corporation.
 Examination and storage arrangements on receipt of fresh notes from PSPC.
 Maintenance of sufficient balances of currency notes/coins.
 Supply of notes in the country.
 Withdrawal of soiled/defective notes from circulation and their destruction under
appropriate control mechanism.
4.3 Prize Bond and Saving Certificate Dept
The Prize Bond scheme is the part of national saving scheme. The SBP provides
management services to the government for this scheme. SBP can decide about the terms
and conditions of the scheme can increase or decrease the amount of prize money and can
change the denomination. Prize bond unit perform the following functions.
 Sale and purchase of Prize bonds.
 Maintenance of the prize bond stock.
 Giving the prize money.
 Help in organizing draws.
Apart from prize bond this unit is involved in the management of defense saving
certificates and special saving certificates. These two instruments are dealt with in the
interest bearing account and the prize in non-interest bearing account of the unit.
4.4 Internal Monitoring Dept
Internal auditing is a profession and activity involved in helping organizations achieve
their stated objectives. Internal monitoring unit is an independent appraisal function

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established within SBP to examine and evaluate its activities as a service to the
organization.
Main functions and responsibilities;
 Conducting pre-audit of all accounts of the Office.
 Pre audit the cases and vouchers received from various units under SBP
Expenditure regulation, budgetary limit and head of accounts.
 Prize Bonds’ Payment cases.
 Export Refinance Cases before making payment to banks
4.5 Public Accounts Dept
Under Section 21 of the State Bank of Pakistan Act 1956, the SBP has been entrusted to
Perform banking services on behalf of the federal and provincial governments and also to
carry out their exchange, remittance and other banking operations including the
management of public debt.
The banking services provided by SBP to the federal, provincial and local governments
Includes following services.
 Collection of revenue on behalf of government departments.
i.e. property tax, income tax, sales tax and all other receipts of Govt. of Pakistan.
 Making payments on behalf of government departments.
 The Public Accounts Department of SBP is responsible for maintenance of:
 The Federal Govt. A/C
 Provincial Govt. A/C
 Local Governments
 Zakat Accounts.
 Defense A/C
The data pertaining to government transactions carried in various accounts is reported to
Accountant General of the provinces, Accountant General Pakistan Revenue (AGPR),
Pakistan Railways and other concerned departments on daily/ periodic basis.

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4.6 General Services Dept
The major functions of GSU are;
 Disbursement of monthly salaries and allowances.
 Making other payments like pension, retirement.
 Making business plans, preparation of annual budget.
 Assessment of employee loans.
 Procurement of office furniture, stationary, vehicles etc.
 Activation and deactivation of employee medical facilities.
5. Monetary Policy:
To enhance the efficacy of monetary policy, the central bank decided in September 2009 to
increase the frequency of monetary policy decisions to six times in a fiscal year. Hence, it was
decided that monetary policy decisions would be announced in the last week of July, September,
November, January, March, and May. It was also decided that the January and July decisions
would be accompanied by a detailed statement and press conference, whereas the rest of the
monetary policy decisions would be announced through a press release only. Hence in FY10,
SBP issued four brief monetary policy decisions and two monetary policy statements. The
monetary policy stance went through several stages during the year, from easing in the first half,
to maintaining status quo in the second half. Striking a balance between improvements in various
macroeconomic indicators and ongoing economic challenges, SBP eased the policy discount rate
as well in FY10.
The first move towards easing the stance was in consideration of the improvements in
Macroeconomic indicators. And the central bank decided to lower the policy rate by 100 bps
w.e.f. August 17, 2009, as detailed in the monetary policy statement for July-September 2009. At
that point in time, CPI inflation showed a declining trend, government borrowing remained
within the quarterly limits specified in the IMF SBA, and SBP‟s foreign exchange reserves
exhibited a rising trend. The positive indicators, in turn, were reflected in a contraction in
aggregate demand; much needed fiscal consolidation, and improved balance of payments
position. However fiscal and real sector performance remained tenuous during the year. Lending
to the private sector remained subdued and structural issues specifically electricity shortages
diluted the optimism of a steady recovery. Sustainable recovery of the real sector of the economy
was not possible without a revival of the business environment and availability of credit to the
private sector. Structural weaknesses in the economy continued to pose a threat to inflation in the
presence of uncertainty regarding outcome of ongoing fiscal consolidation and timing of official

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foreign inflows. This led to keeping the policy rate of the central bank unchanged in the MPS
announced at the end of September 2009.
Although the cumulative flow of credit to the private sector showed retirement during the
initial months of FY10, it witnessed significant improvements in the second quarter. This
was in consonance with the growth in Large Scale Manufacturing (LSM). Throughout this
period, the central bank strived to maintain monetary stability without jeopardizing real
economic activity. In this perspective, SBP decided to lower the policy discount rate by 50
bps in November 2009. However, inflation outlook in January 2010 turned vulnerable due to
delays in fiscal consolidation and re-emerging international commodity price pressures.
After careful evaluation of associated uncertainties in the economy, policy rate was kept
unchanged at 12.5 percent. In the subsequent months, inflation showed some persistence due
to increases in electricity tariffs, adjustments in the prices of domestic petroleum products,
and administered prices of commodities. In addition to this, uncertainties pertaining to fiscal
and quasi-fiscal indicators (in terms of government meeting its tax mobilization targets), the
central bank maintained the policy discount rate at this level in the MPS for March and May
2010
6. SWOT Analysis
6.1 Strengths 6.2 Weaknesses
 Strong internal control for transactions
therefore no fraud has ever been done
 Job security, good salary packages and
benefits for employees attract and retain
 Technological backwardness.
 Latest procedures and best practices are
not adopted.
 Staff is not well trained in IT.

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talent.
6.3 Opportunities 6.4 Threats
 Investment in IT and latest technology.  Political instability and pressure can
harm the operations of SBP.
 Excessive government borrowings.
 Circulation of fake currency.
7.State Bank of Pakistan — Vision-2020
The State Bank of Pakistan (SBP) announced of its five-year financial strategy – SBP Vision-2020 – for
strengthening and stabilizing financial system of the country.
Governor State Bank, Mr. Ashraf Wathra while speaking at the ceremony at SBP head office, said that
innumerable sacrifices were made by the leaders and common masses for achieving independence. The real
freedom is to become a self-reliant nation. He also said that,
“It is our collective responsibility to play our roles in transforming Pakistan into a strong, prosperous and
thriving country. This may require some sacrifices on our part. If we keep the principles taught by our great
leaders in mind, we will have the vision to see that such sacrifices affect great advancement for the future of a
nation.”
Strong institutions build strong economic system, which is a key to progress. Every growing nation requires a
robust financial system and strong economy. In early days of freedom, Pakistan managed to establish its
central bank and a viable economic system. Despite our economy has seen many ups and downs, but we are
headed towards the right direction. SBP on the auspicious occasion of the 68th
Independence Day launched its
five year strategic plan named as “SBP Vision 2020”.The plan is devised by the SBP officials keeping in view
the Government of Pakistan’s Vision 2025 program.

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Mr. Ashraf Wathra also said,
“Our aim is for SBP to be a role model for best corporate practices in Pakistan and to deliver effective and
efficient outcomes at every level. We need to empower all staff members to help delivering SBP Vision-2020
and driving the organisation’s change.”
He added that, SBP is also focusing on further deepening of our core values of integrity, accountability, team
work, courage, excellence and result orientation in our organization’s culture.SBP Vision-2020 is knitted
around the six strategic objectives which are; increasing the effectiveness of monetary policy, strengthening
the financial system stability regime, improvement in efficiency, effectiveness and fairness of the banking
system, increasing financial inclusion, developing modern and robust payments systems and strengthening
SBP’s organizational efficiency.Around 50% of Pakistan’s adult population does not utilize financial services
such as formal savings, payments, deposits, credit or insurance. Despite efforts, the level of financial inclusion
had remained very low. Due to which a new comprehensive national strategy is much needed, he
added. Governor SBP also said the SBP Vision-2020, with respect to increasing financial inclusion, is closely
associated with the implementation of the National Financial Inclusion Scheme (NFIS). The NFIS will guide
efforts for promoting financial inclusion over the next five years.State bank is also playing and important role
in preserving our cultural heritage. SBP Museum and Art Gallery are two of its important chapters in this
regard.State Bank of Pakistan is one of the few institutions who are the pride of the nation, in spite of many
hazards and challenges; we have achieved so much and taken the economy of the country to the new
heights.On the occasion, the governor was also given guard of honour by police and SBP guards, after which
he hoisted the national flag.
8 Pakistan forex reserves
- Governor State Bank Ashraf Mahmood Wathra on Monday said that foreign exchange
reserves have crossed the limit of 20 billion dollars. Addressing a ceremony at Pakistan
Stock Exchange (PSX) in Karachi this morning,

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He said that economic growth witnessed significant increase in the country during past two
years.He said budget deficit is in control and praised the role of Pakistan Stock Exchange in
economic growth of the country.
Wasthra said that there is no threat to Pakistan’s economy now as the situation has
significantly improved in the last two years
.He said that there is visible reduction in inflation rate due to SBP’s positive steps.It may be
mentioned here that remittances from Pakistanis abroad rose 6.07 percent to $12.714 billion
in the first eight months of the 2015/16 fiscal year, from $11.986 billion during the same
period last year. The fiscal year runs from July to June. At present, the Pakistan economy is
benefitting from the drop in global oil prices, its biggest import. The central bank has also
been cutting interest rates while its IMF programme is clamping down on corruption.
GDP growth is also expected to be 5.5 percent for the year to June 2016.
9. Suggestions & Recommendations
It was observed that the major blockage in payment system is the physical movement of
the instrument. Cheque is the most widely accepted Instrument to settle transactions in
the world. Paper cheques provide consumers and businesses critical alternative payments
mechanism. Today billions of cheques are written and processed each year, and
consumers and businesses remain confident and satisfied with writing cheques.
 Cheque Transaction System.
 Online data usage to save time.
 Token issuing and cash counters should be placed together.
 Proper display on all counters.
 Software’s should be updated.
 Removing communication gap.
10 .Conclusion

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SBP greatest strength is their financial background, which happens to be so strong that
even in current market situation they are still in the position to lend loans to other banks
and have also reported profits in the previous quarter.
SBP has gathered large amount of the market for itself. They need to put in systems such
as a strong Employee Monitoring System which provides transparency in all their
processes and employee activity. They can and must learn from the best case practices of
other bank international as well.
11. References
 www.sbp.gov.pk
 www.wikipidia.com
 www.google.com.pk
 www.sbp.org.pk/spd/Strategic.pdf
 http://www.financeworld.pk/state-bank-of-pakistan-vision-2020/
 http://dunyanews.tv/en/Pakistan/327527-Pakistan-forex-reserves-cross-20-billion-
mark-SB

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