The document is an internship report by Abdul Baseer at the Treasury Cash Unit of the State Bank of Pakistan Banking Services Corporation (SBPBSC) North Nazimabad branch in July 2015. It summarizes the functions of the Treasury Cash Unit, including receiving soiled banknotes, examining them, cancelling defective notes, supplying fresh notes and coins to the public, and maintaining daily records of transactions. It also outlines the unit's hierarchy, vaults, counters, processes for box balances, evening collections, and vault closing procedures.

1. Internship Report
SBPBSC Summer Internship Program 2015
By: Abdul Baseer
July 2015

2. 1SBPBSC Internship Report
Executive Summary
The document contains internship report on the Treasury Cash Unit procedures how the work load is
divided in the department between the personnel. What are the functions of the unit and how they are
performed? The issue and exchange function of the unit, opening of office and vault. Receipts of soiled
and defective notes their examination process and then the cancellation of notes. The process for
cancelled notes and sell mechanism. Supply of fresh notes and coins to the general public and
maintaining the daily record of the transactions at the State Bank of Pakistan BSC North Nazimabad.

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Acknowledgment
I place on time gratitude to my Internship Coordinator Madam Saira Shahzad, Treasury Cash
Officer Mr. Tahir Mehboob and other people of have helped me out in the completion of this
Internship Report.

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Table of Contents
Vision of State Bank of Pakistan: ..................................................................................................................4
Mission of State Bank of Pakistan:................................................................................................................4
History of State Bank of Pakistan:.................................................................................................................4
Banking: ........................................................................................................................................................5
Facilities: .......................................................................................................................................................6
Governor:......................................................................................................................................................7
Central Board of Directors:...........................................................................................................................8
State Bank & Subsidiaries: ............................................................................................................................8
SBP Banking Services Corporation (SBP BSC):...............................................................................................8
Vision of SBPBSC: ........................................................................................................................................10
Mission of SBPBSC:......................................................................................................................................10
Field Offices:................................................................................................................................................10
SBPBSC North Nazimabad:..........................................................................................................................10
Core Functions: ...........................................................................................................................................11
Support Functions:......................................................................................................................................13
Special Functions: .......................................................................................................................................13
Treasury (Cash) Unit: ..................................................................................................................................14
Hierarchy of Unit:........................................................................................................................................15
Issue and Exchange Branch:........................................................................................................................16
Working strength of treasury (cash) unit:...................................................................................................16
Functions:....................................................................................................................................................16
Vaults: .........................................................................................................................................................17
Counters:.....................................................................................................................................................18
Box Balances: ..............................................................................................................................................19
Evening Collection:......................................................................................................................................19
PAD Box:......................................................................................................................................................20
Vault Closing: ..............................................................................................................................................20

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Introduction
Vision of State Bank of Pakistan:
To transform SBP into a modern and dynamic central bank, highly professional and efficient,
fully equipped to play a meaningful role, on sustainable basis, in the economic and social
development of Pakistan.
Mission of State Bank of Pakistan:
To promote monetary and financial stability and foster and financial system, so as to achieve
sustained and equitable economic growth and prosperity in Pakistan
History of State Bank of Pakistan:
Before independence on 14 August 1947, during British colonial regime the Reserve Bank of
India was the central bank for both India and Pakistan. On 30 December 1948 the British
Government's commission distributed the Reserve Bank of India's reserves between Pakistan and
India -30 percent (750 Mgold) for Pakistan and 70 percent for India.
The losses incurred in the transition to independence were taken from Pakistan's share (a total of
230 million). In May, 1948 Muhammad Ali Jinnah (Founder of Pakistan) took steps to establish
the State Bank of Pakistan immediately. These were implemented in June 1948, and the State
Bank of Pakistan commenced operation on July 1, 1948.
Under the State Bank of Pakistan Order 1948, the state bank of Pakistan 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".
A large section of the state bank's duties were widened when the State Bank of Pakistan Act
1956was introduced. It required the state 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". In February 1994, the State
Bank was given full autonomy, during the financial sector reforms.
On January 21, 1997, this autonomy was further strengthened when the government issued three
Amendment Ordinances (which were approved by the Parliament in May 1997). Those included
were the State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962 and Banks
Nationalization Act, 1974. 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. The amendments to the Banks

6. 5SBPBSC Internship Report
Nationalization Act brought the end of the Pakistan Banking Council (an institution established
to look after the affairs of NCBs) and allowed the jobs of the council to be appointed to the Chief
Executives, Boards of the Nationalized Commercial Banks (NCBs) and Development Finance
Institutions (DFIs). The State Bank having a role in their appointment and removal. The
amendments also increased the autonomy and accountability of the chief executives, the Boards
of Directors of banks and DFIs.
The State Bank of Pakistan also performs both traditional and developmental functions to
achieve macroeconomic goals. The traditional functions may be classified into two groups:
1- 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.
2- 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 islamisation of the banking system.
Banking:
The State Bank of Pakistan looks into a lot of different ranges of banking to deal with the
changes in economic climate and different purchasing and buying powers. Here are some of the
banking areas that the state bank looks into;
1- State Bank’s Shariah Board Approves Essentials and Model Agreements for Islamic
Modes of Financing
2- Procedure for Submitting Claims with SBP In Respect of Unclaimed Deposits Surrendered By
Banks/Dfis.
3- Banking Sector Supervision in Pakistan
4- Micro Finance
5- Small Medium Enterprises (SMEs)
6- Minimum Capital Requirements for Banks
7- Remittance Facilities in Pakistan

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8- Opening of Foreign Currency Accounts with Banks in Pakistan under new scheme.
9- Handbook of Corporate Governance
10- Guidelines on Risk Management
11- Guidelines on Commercial Paper
12- Guidelines on Securitization
13- SBP Scheme for Agricultural Financing
Facilities:
Agriculture credit
Audit
Banking Inspection
Banking Policy & Regulations
Banking Supervision
Corporate Services
Economic Analysis
Financial Monitoring Unit
Monetary Policy
Research
Statistics and Data Warehouse
Exchange Policy
Human Resource
Information Systems & Technology
Islamic Banking
Legal Services
Library
Payment System

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Real Time Gross Settlement System (RTGS System)
Small and Medium Enterprises
Training and Development Department (TDD)
Treasury Operations
Strategic & Corporate Planning
Microfinance
Pakistan Remittance Initiative
Governor:
The principal officer of the SBP is the Governor. The current Governor of State Bank of Pakistan
is Mr. Ashraf Mahmood Wathra
.1. Zahid Hussain, 10-06-1948 TO 19-07-1953
2. Abdul Qadir, 20-07-1953 TO 19-07-1960
3. Shujaat Ali Hasnie, 20-07-1960 TO 19-07-1967
4. Mahbubur Raschid, 20-07-1967 TO 01-07-1971
5. Shahkur Ullah Durrani, 01-07-1971 TO 22-12-1971
6. Ghulam Ishaq Khan, 22-12-1971 TO 30-11-1975
7. S. Osman Ali, 01-12-1975 TO 01-07-1978
8. A G N Kazi, 15-07-1978 TO 09-07-1986
9. V.A. Jaffrey, 10-07-1986 TO 16-08-1988
10. I.A. Hanfi, 17-08-1988 TO 02-09-1989 (first term), 01-09-1990 TO 30-06-1993 (second
term)
11. Kassim Parekh, 05-09-1989 TO 30-08-1990
12. Mohammad Yaqub, 25-07-1993 TO 25-11-1999
13. Ishrat Husain, 02-12-1999 TO 01-12-2005
14. Shamshad Akhtar, 02-01-2006 TO 01-01-2009
15. Syed Salim Raza, 01-01-2009 TO 02-06-2010

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16. Yasin Anwer(acting), 02-06-2010 TO 08-09-2010
17. Shahid H. Kardar, 08-09-2010 TO 18-07-2011.
18. Yaseen Anwar, 20-10-2011 TO 31-01-2014
19. Ashraf Mahmood Wathra, 31-01- 2014 TO Present
Central Board of Directors:
Dr. Waqar Masood Khan
Mr. Mehmood Mandviwalla
Mr. M. Nawaz Tiwana
Mr. Iskander Mohammed Khan
Mr. Khawaja Iqbal Hassan
Mr. Muhammad Hidayatullah
Mr. Zafar Masud
Miss. Sahar Z. Babar
State Bank & Subsidiaries:
SBP Banking Services Corporation (SBPBSC):
The Banking Services Corporation (BSC), being an operational arm of SBP, continued to further
improve its service delivery mechanism in an automated environment. The SBP-BSC undertook
various initiatives to better discharge its core responsibilities assigned in the SBPBSC Ordinance
2001. The Bank aggressively pursued a talent management strategy with focused approach on
recruitment and selection. The process started with the induction of 24 cash officers for the field
State Bank of Pakistan
NIBAF
Banking Services Corporation (BSC)

10. 9SBPBSC Internship Report
offices of Muzaffarabad and D.I. Khan to meet their specific needs. The Bank’s Board also
approved a management trainee scheme (OG-2) titled ‘Young Professionals Induction Program’
(YPIP) to induct young officers on regular basis. Further, realizing the need for supportive and
capable middle management to steer the reform process, the Bank advertised OG-3 level
positions. To improve the skill sets of existing staff, training opportunities were provided. Also
the use of IT and Globus in BSC has improved timing in service delivery. For ensuring effective
internal controls in an automated environment, risk register, system based check lists have been
introduced in some areas. The remaining areas of operations risk registers are developed on a fast
track basis.
Besides its core responsibilities, BSC with its enhanced mandate in line with the new vision for
its 16 field offices played a significant role to make them focal points for dissemination and
implementation of SBP policies/initiatives. As a result, during FY10 this not only helped to
improve financial awareness but also resulted in healthy feedback from stakeholders.
A number of projects are completed to improve physical infrastructure including renovation and
refurbishing of various floors of BSC head office and its field offices to uplift the face of State
Bank of Pakistan and to provide efficient services in a better working environment.

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Vision of SBPBSC:
To develop SBP-BSC into a dynamic and efficient organization equipped with requisite
technology human resource capable of extending sustainable support to the SBP in achieving its
objectives.
Mission of SBPBSC:
To provide excellent banking and financial services to stakeholders besides ensuring
implementation of SBP policies in order to command their trust and respect.
Field Offices:
There are 16 field offices of State Bank of Pakistan Banking Services Corporations.
1. Karachi
2. Lahore
3. Peshawar
4. Quetta
5. Rawalpindi
6. Islamabad
7. Sialkot
8. Faisalabad
9. Multan
10. Hyderabad
11. Sukkur
12. D I Khan
13. North Nazimabad
14. Muzafarabad
15. Bhawalpur
16. Gujrawala
SBPBSC North Nazimabad:
The State Bank of Pakistan Banking Services Corporation (SBP BSC) North Nazimabad,
Karachi, has set up Customer Facilitation Centre to ensure smooth and uninterrupted functioning
of Automated Teller Machines (ATMs) of commercial banks, disbursement of loans and
advances, facilitates inter-bank settlement system and deals in prize bonds in the District Central,
Karachi.

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Core Functions:
Treasury (Cash) Unit:
 Sale / Encashment of Prize Bonds / Payment of Prize Money claims
 Sale / Encashment / Reinvestment / Payment of profit on SSC and DSC schemes.
 Collection of revenue on behalf of Central, Provincial Govt, local Govt. Authority, Banks
and SBP BSC field Offices etc.
 Issuance / Exchange of all denominations of Currency Notes.
 Exchange of all denominations of clearly payable defective / claim Notes.
 Issuance / Exchange of all denominations of Coins.
 All type of payments /Receipts from / to employees.
Banking:
Deposit Accounts Unit
 Compiles all transactions, executed in the Office and manage to send information to BSC
HOK.
 Issuance of Pay orders, M.T, B.D & D.D.
 Manage Retired Employees Fund Scheme.
 Maintain Current A/Cs and Government Accounts.
 Preserve record of mandatory accounts etc.
Public Accounts Unit
 Collect Revenue on behalf of Central / Provincial Govt. & local Govt.
 Make Payments on behalf of Government.
Try (Cash) Banking Prize Bonds
National
Saving Scheme
Currency
Management

13. 12SBPBSC Internship Report
 Keep close liaison with Accountant General, District Accounts/Treasury Officers and
help in reconciliation of Government payment receipt accounts.
 Zakat collection (Central VIII)
 Preserve record of all pertinent accounts.
Prize Bonds Unit:
P.B. local Govt. A/C (Accounts/Payment)
 Preserves sale / encashment record of fresh / reissue Prize Bonds and defective Prize
Bonds.
 Prepare lists of unsold reissuable Prize Bonds numbers (PB-35), get duly audited and
preserves it in safe custody of Chief Manager before the draw fall on such Prize Bonds.
 Prepare lists of all retained Prize Bonds.
 Taking of prize money from the Prize Bonds kept in the custody of Bank and affording
credit of the amount of Prize Money of Prize Winning Bonds to Government.
Prize Money Unit
 Entertain Claims for Prize Money above Rs.1000/-.
 Maintenance of record of Prize money of all denominations Prize Bonds.
National Saving Scheme:
Special Savings/Defense Savings Certificates Unit
 Sale / Encashment / Reinvestment / Payment of profit of SSC and DSC.
 Deduction of Zakat (CZ-50) & with holding Tax on SSC / DSC.
Currency Management Unit:
 Issuance of Currency Notes and Coins.
 Collects / dispatches remittances from / to Commercial banks / SBP BSC Offices
 Entertain claim notes cases.
 Preserve all pertinent record of balances up to date.

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Support Functions:
Special Functions:
Human Resource
Management
Loan/Advances
Procurement
Audit
•Pre audit / Post audit
•Compliance / Follow up
Security
•Bank Premises
•Hostels / Ground
Engineering
•Maintenance
•Contract / Agreement

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Unit Details
The unit described in this report is Treasury (Cash) Unit. The duties are descried the way they
are being performed by the working unit in general.
Treasury (Cash) Unit:
The Treasury (Cash) Unit is placed in immediate charge of a Currency Officer who is
responsible to the Bank for the full management of the Issue & Treasury (Cash) Unit and for the
strict observance of all rules and orders applicable to the working of Issue Department as laid
down in Issue Department Manual or issued by SBP from time to time. He should be particularly
careful to apply all the checks which have been prescribed for ensuring the safe custody and
integrity of the balances and the correctness of the daily accounts. It is the duty of the Currency
Officer to pay frequent visits to the public counters and the halls where notes or coins are being
examined and to see that work is carried on properly and efficiently as contemplated in the
Manual and without inconvenience to the public or any wastage of Staff.
Treasury (Cash) Unit
Issue Branch Exchange Branch

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Hierarchy of Unit:
ACM (Cash)
Senior TO
TO
ATO
Senior Assistant
Assistant
Seal ManVault Peon

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Issue and Exchange Branch:
The two main branches of the Treasury (Cash) Division/ Unit in an office of the SBP BSC are
Issue and Exchange Branches.
Issue Branch attends to
• The receipt, safe custody and issue of fresh notes to the Exchange
• Branch and currency chests within the circle as also to other circles;
• The receipt and disposal of non-issuable notes from chests under the circle;
• The taking over from the Exchange Branch of cancelled notes pending verification.
Exchange Branch deals with
• The exchange of notes and coin over the counters.
• The examination of incoming remittances of non-issuable notes.
• The receipt and examination of inward coin remittances.
• The dispatch of remittances of fresh & issuable notes, coin and small coin.
• The cancellation of notes received and examined in the office.
• Small Coin Depot transactions and Government Stock of Surplus Rupee Coins.
• The exchange of small coin & un-current coins and other transactions between the
Banking and Issue Departments.
Working Strength of Treasury (Cash) Unit:
Functions:
• Sale / Encashment of Prize Bonds / Payment of Prize Money claims
Grade Strength
OG-3 01
TO 18
ATO 21
Senior Assistant 05
Clerk Cash 05
Vault Peon 09
Total Strength 59

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• Sale / Encashment / Reinvestment / Payment of profit on SSC and DSC schemes.
• Collection of revenue on behalf of Central, Provincial Govt, local Govt. Authority, Banks
and SBP BSC field Offices etc.
• Issuance / Exchange of all denominations of Currency Notes.
• Exchange of all denominations of clearly payable defective / claim Notes.
• Issuance / Exchange of all denominations of Coins.
• All type of payments /Receipts from / to employees.
Vaults:
Following vaults are in the SBPBSC North Nazimabad.
Prize Bond Vault
This vault holds the prize bond which are not yet issued to the general public and also the prize
bonds that are being cashed by the general public on the counters.
Exchange Vault
This vault contains the notes that are in the circulation for the general public, the notes that are
being exchanged for small or big denomination are kept in this vault.
Fresh Note Vault
This vault holds the notes that are not in the circulation, it only contains the fresh note currency.
Once the notes are withdrawn from this vault than it cannot be kept again in the vault it should
be transferred to the exchange vault.
Prize Bond
Vault
Exchange
Vault
Fresh Note
Vault
Bonded
Note Vault

19. 18SBPBSC Internship Report
Counters:
The following counters are available in the banking hall of the SBPBSC North Nazimabad for
entertaining the general public.
Defective Note Counter
This counter entertains the general public by exchanging the defective notes and giving them
fresh or re-issuable notes to anyone who appears on the counter. There is only one counter for
this purpose in the hall.
Exchange Note Counter
This counter entertains the general public by exchanging the denomination of the notes. For
example people bring notes with big denominations and gets notes of small denominations.
There is only one counter for this purpose in the hall.
Coins Counter
This counter facilitates the general public by providing them coins against the exchange of notes
or providing notes against of coins. There are two counters one is for receipts and other is for
payments.
Prize Bond Encashment Counter
This counter entertains the general public having bonds and willing for encashment of the face
value of their bonds. The counter provides cash against the bonds at any time one appears on the
counter. There is one counter for this purpose in the hall.
Prize Bond Sells Counter
This counter entertains the general public by selling them bonds of different denominations.
There two counters for this purpose, first counter sells the Rs. 100,750,15000 and 40000
denominations’ bonds and the second counter sells Rs. 200, 7500, 1500 and 25000
denominations’ bonds.
Government Challan Counter
This counter entertains the general public by receiving the tax on the behalf of FBR from them
and challans.
Fresh Notes Counter
This counter facilitates the general public when the Eid ul Fitr and Eid ul Azha in about to come.
The public requires fresh note for the purpose for giving eidi to children therefore the SBPBSC
provides the fresh notes on the time.

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Box Balances:
Following are the box balances at the back office of the Treasury (cash) Unit in the SBPBSC
North Nazimabad
Exchange Box
This box contains the notes that are being used for the purpose of exchange on the counters, the
officer keeps the box in his custody and provide notes to the counters as per requirement.
Banking Box
This box contains the notes that received from the general public as payment of government
challans, saving certificates and prize bonds.
Prize Bond Box
This box specially contains the notes that are received from the sales of prize bonds to the
general public.
Evening Collection:
At the end of the day a Treasury Officer nominated as Incharge Evening Collection for the
purpose shall examine the unspent balance of all Treasury Officers handling each counter in
Prize Bond Vault Exchange Vault Fresh Note Vault
Prize Bond Box Exchange Box Fresh Note Box
PB Encashment
PB Sales Counter
Defective Counter
Coins Counter
Exchange Counter
Govt Challan
Fresh Note Counter

21. 20SBPBSC Internship Report
detail. For the purpose of this verification he will be assisted by Tellers who should recount the
full packets in the immediate presence of the Incharge Evening Collection and put their dated
signatures on the front of the first and back of the last note of the packet. Full packets of Rs.100
and above shall be checked by the Incharge Evening Collection by clip system. Chit packets of
all denominations shall be counted by him in detail. Thereafter, the individual Treasury
Officers’ balances shall be combined by the Incharge Evening Collection so that only one chit
packet of each denomination in each category remains. The combined balance shall then be
conveyed in a separate box to the concerned Vault by him. The Vault Officers shall also at the
close of the day, verify the balances by packets and bundles and count the chit packets, if any, in
detail.
PAD Box:
At the end of the day all amounts must be rounded to Rs. 5000 therefore this box is used the
amount that excess in the rounding is kept in this box for the rounded purpose of the next day.
Vault Closing:
The balances are done then the box balances are transferred to the vaults in the custody of the
ACM (Cash) and ACM (IMU) both. They both have to sign the report generated by the Globus
System so that the next day balance is prepared.
Examination Halls
In examination halls as discussed above the balances are examined in different manner such as
examination under special procedure, sorting of Notes into uninsurable and reissue able notes, as
also examination for passing of defective notes etc.

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Recommendation
These recommendations are not only limited to the unit discussed in this report, they are for the
whole bank:
 Use of extra power energy.
The bank is using old type of tube lights in the premise. It can be replaced with LED lights
strips. They are currently using 40watts and they are around 40 in number in one corner of
the premise. Besides the LED lights single strip can be used in the whole corner it consumes
only 20 watts. It can save a handsome amount of energy.
 Use of old computer equipment.
The bank is using outdated computer systems. They are using dual core or quad core
processor computers in the premise. They are operating windows 7 which is the loadiest
operating system. It can also a solution if Win XP is installed on these PCs it can be runned
more efficient than Win 7. Because it produces customer frustration long rush on the
counters.
 Fresh note dealers.
There a lot of people out there in the market making black money through the assets of SBP
this is not legal. Therefore it must be discouraged by bringing electronic use. It can be linked
with the NADRA smart cards so that people at the time of Eid-ul-Fitr and Eid-ul-Adha can
easily withdraw fresh notes through ATM machines located in there locality so the chances
of being robbed can also be minimized and dealership also. But the SBPBSC will be required
to make sure the flow of fresh notes to the bank branches.
These are the lagging points that I observed in my six weeks Internship Program in the
SBPBSC North Nazimabad. I hope if they are employed the bank will operate more efficient
and effective than before.