STATE BANK OF PAKISTAN BANKING SERVICES CORPORATION
(BANK) FAISALABAD
INTERNSHIP REPORT 2013 Submitted to: Mr. SAJJAD ALI SHAH Chief Manager State Bank of Pakistan BSC (Bank) Faisalabad Submitted by: Mr. Faisal Mahmood Tahir (Roll No. F-10810)
National University of Modern Languages (NUML) Islamabad Faisalabad Campus
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Preface
nternship is an integral part of our degree (MBA or M.Com). For the sake of internship the most initial thing is to have a practical experience. This effort may lead a student to get a practical experience if right organization is selected. During the internship, a student comes to practical knowledge. He/she learns what he has studied so far. As a MBA student I have also done my internship at SBP-BSC Faisalabad. Here I come to know a different and very interesting experience of learning and working with people. First of all I will tell you about Bank then operations of different department.
I STATE BANK OF PAKISTAN (BSC) FAISALABAD
Acknowledgement
To Him belongs the dimension of the Heavens and the earth, it is He who gives Life and death and He has power over all things. (Al-Quran) In the first week of my internship I was bit confuse because it was my first experience to be there at workplace. At workplace there were very nice personnel who helped me time and again for proceeding. I am highly indebted to my instructor Mr. Muhammad Rehan who always helped me whenever I got confused. He is full of God gifted qualities, he has been there to guide me during my internship span of six weeks. I am also thankful to Mr. Naeem-ul-Hassan, Miss Naila Iram, Mr. Muhammad Rafique and all other employees of SBP- BSC Faisalabad who remained supportive and cooperative during the work. They also helped me from the formative stages to the completion of this internship report. And how can I forget my honorable and beloved Sir Kashif and Sir Shakil who made me able to perform this task. And boost my morale at every time when I have disappointed and lost my hope. I am very thankful from the core of heart to both Sir Kashif and Sir Shakeel. My friends like Mr. Whaab, Mr. Israr, and Mr. Rehan and other friends also provided me guide lines for preparing this report I would like to say thanks to all these. May Allah bless them all and succeed them in every field of life. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Dedication
I dedicate this stuff to my beloved and supporting parents and caring brothers and sisters. A special feeling of gratitude is dedicated to my loving parents for their endless love, support and encouragement. I dedicate this work and give special thanks to my coordinator Mr. Muhammad Rehan for being there for me throughout the entire internship program.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Sr. No.
Title
1. Executive summary
2.
Introduction
3.
Structure of SBP BSC FSD
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
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Executive Summary
I choose the state bank of Pakistan BSC Faisalabad for my internship. 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 number 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 we were trained are public account unit, deposit account unit, currency management unit, prize bond unit, export refinance unit, foreign exchange operation division, foreign exchange adjudication unit, access to finance unit, onsite inspection unit, public account unit perform many operations. It collects and gives payments on behalf of government. It also performs clearing. It receives cheques or send cheques 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 learned a large number of things from state bank of Pakistan Faisalabad. It provides all facilities to general public which it can to help or facilitate them. At the end of report some recommendations are also given based on my observation and study of system of SBP-BSC Faisalabad.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Introduction SBP is the central bank of the country since September 1948.The bank carries out its 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
STATE BANK OF PAKISTAN (BSC) FAISALABAD
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. Vision Our 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. Mission To 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 BSC 1. 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Hierarchy of SBP BSC
Chief Manager (C.M) Deputy Chief Manager (DCM) Assistant Chief Manager (ACM) OG-2 OG-1 STATE BANK OF PAKISTAN (BSC) FAISALABAD
Departments of SBP- BSC FSD
1 Refinance scheme unit 2 Currency management unit 3 Onsite verification 4 Prize bond unit 5 Public accounts unit 6 Foreign exchange operations division 7 Foreign exchange adjudication department 8 Access to finance unit 9 Deposit accounts unit STATE BANK OF PAKISTAN (BSC) FAISALABAD
Refinance Schemes Unit Overview Exports play an important role in economic growth & development of a country. The export finance scheme (EFS) was introduced in 1973 with the objective to boost up exporters by providing Short term financing facilities to exporters through banks at concessional rates, for exports of manufacturing goods specially value added products (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.
1. Long term financing scheme (LTFF) Long term financing facility loan is available for imports of machinery (locally manufactured and imported). And this is granted for 3, 5, and then get up to 10 years. Grace period up to 2 years for these loans. The basic purpose for granting this loan is to boost up the exports by producing value added products through this imported machinery.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
2. Islamic export refinance scheme (IERS) In case of conventional banks interest rate is set by IH and SME finance department of State Bank of Pakistan. But in case of Islamic banking refinance, interest rate is different for each month that is set by the head office of that bank keeping in mind their fixed assets and as it is acceptable for SBP BSC, Refinance unit. Interest rate is also different from one Islamic bank to another. 3. Refinancing Facility for Modernization of SME
It was introduced to encourage the sponsors of SMEs to modernize their mills/units to produce quality products.
4. Financing Facility for Storage of Agricultural Produce
This scheme was introduced to encourage Private Sector to establish Silos, Warehouses and Cold Storages to store agricultural produce.
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).
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Structure
EFS Part-l Part-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. Direct exporter o Under part-l of the scheme is available to direct exports to the extent of 100% of the value a firm order/contract /LC at pre-shipment stage against eligible goods. Indirect exporter o Who supply inputs i.e. material & goods to direct exporter to be used for to be exported, are also eligible to avail finance from banks under the scheme at pre-shipment stage.
Refinance Scheme unit Part-1 Pre- shipment Post- shipment Part- II STATE BANK OF PAKISTAN (BSC) FAISALABAD
Schemes of part-l 1).Pre-shipment in which loan is taken before shipment & simply made contract & the exporter tells the bank & then bank provide the finance/loan. After getting loan exporter has to deliver shipment in 180 days. In case of late shipment fine will be charged. 30 days are provided to exporter to submit documents/shipment proofs to commercial banks &7 days are provided to commercial banks to submit these documents to SBP-BSC. Required documents The documents required to be submitted by the Direct /Indirect Exporters to the bank concerned are as under: D-P note Form-D Application (request) Annexure D EPRC (export proceeds realization certificate) 2). Post shipment is that in which after shipment loan is required. In 210 days after shipment exporter has to realize export proceeds. If he fails to do so then the fine will be charged. When amount is realized then amount will be submitted to SBP-BSC within three working days. Required document D-Form Demand Promissory Note Export procedure realization certificate (EPRC) Invoice Date of shipment STATE BANK OF PAKISTAN (BSC) FAISALABAD
Operations of the Scheme under PartI Finance from banks under PartI of the Scheme is available to Direct Exporters to the extent of 100% of the value of a firm export order / contract / letter of credit against eligible goods. Indirect Exporters who supply inputs to a Direct Exporter are also eligible to avail finance from banks under the Scheme at preshipment stage The Direct or Indirect Exporter shall approach his bank for availing facilities under EFS indicating his financial needs. After giving finance to exporters the commercial banks make an application to the SBP-BSC to indicate the particulars of exporter against which they intend to get refinance as per Form D. Each request for reimbursement for refinance will be accompanied by a Demand promissory note that is executed by exporter in favor of bank and then endorsed to SBP-BSC. The total amount of financing to both Direct and Indirect exporters shall not exceed the total amount of the firm export order / contract or letter of credit. The concerned office of the SBP BSC will grant refinance to the banker of the Direct Exporter or Indirect Exporter, as the case may be, and release the amount accordingly within 48 hours on receipt of the refinance claim as per Form D and D.P Note executed by the exporter. The scrutiny of documents to be submitted by exporter will be done by the bank concerned.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
EFS Part-ll Part-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. Types of limits There are two types of limit: Direct liability is the limit which is formed for ADs by Head office. Indirect Liability is the exporter limit which is formed by SBP-BSC through EE1 statement submitted by exporters through banks.
Difference b/w EF-1& EE-1 statement
EF statement only used in part-2 shipment. EE-1Statement is used part-1 or as well as part-2 statement. Thats why in EE-1 Statement the amount is greater than the EF statement. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Required documents for Loan disbursement Procedure in part-1 DP Note (demand promissory note) Form D (all detail & information about the exporter and bank Overdue certificate (detail about EE-1 & export overdue Request letter from party (detail about new or old scheme) Required documents for Loan disbursement Procedure in part-2 DP Note (demand promissory note) Request letter Form EB (only place or amount is mentioned) Schedule to form EB Form DE-3 UT-DE II Rollover scheme Exporters availing financing facilities under PartII of the scheme shall continue to submit EF1 statement duly verified by the respective offices of FEOD, SBPBSC within two months from the completion of the financial year, as at present. However, while applying for rollover of loans under Part II after completion of the initial 180 days or at an earlier date, exporters shall be required to submit a statement showing details of shipments of eligible goods [as per Form EP ] to the extent of 70% of the refinance already availed against which roll over is being sought. SBPBSC shall not allow the rollover facility unless shipments to the extent of 70% of refinance availed is established.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Calculations for rollover 1. Average of loans from 1 st July 1, by adding minimum and maximum loan grant divide by 2 2. Performance / average*100 3. This average should be minimum 70% for rollover granting loans. 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Linkage of Overdue Export Proceeds with EFS To streamline the procedure for availing financing under EFS, a condition of maximum overdue exports proceeds as 5% of last year exports has been laid down for the exporters. Accordingly, if overdue export position of an exporter is greater than 5% of the previous years exports shown in EE1 statements, the exporter would not be entitled to avail the EFS facility till such time that the overdue position is reduced to the 5% benchmark level. Each exporter is required to give a Certificate on a prescribed Form showing consolidated position of overdue export bills outstanding against all bank(s). If an exporter becomes eligible for EFS by repatriating the proceeds to the level of 5% benchmark in the intervening period prescribed for submission of certificate, he would be allowed to submit a request along with a new certificate for availing the EFS facility. Any misreporting/misstatement shall attract imposition of fine on bank/exporter at the rate prescribed under the Scheme.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Types of penalties
Penalties being charged under the Schemes on account of Various Irregularities Various Fines are charged under EFS to both borrower and bank on account of different kinds of irregularities at rates given below:
Fines under EFS part I In case of Non-shipment the fine will be charged Paisa 37 per day per Rs.1000 or part thereof. Calculated as: Non shipment fine = amount of loan*.37*no. of days/1000 Types of Fines Non-shipment Short/Delayed shipment Late/less repayment Late submisiion of shipping documents Non-submission of EPRC Mistake /misreporting in EPRC Wrong information/misreporting Irregular shipments Non-performance Any defaulter by banks/exporter Exsess availment of loan STATE BANK OF PAKISTAN (BSC) FAISALABAD
In case of Short/delayed shipment the fine will be charged as Paisa 28 per day per Rs.1000 or part thereof. Calculated as: Short/delayed Shipment = amount of loan*.28*no. of delayed days/1000 For the case of Late/less repayment the fine will be Paisa 42 per day per Rs.1000 or part thereof. Calculated as: Late/less repayment = less paid amount*.42*no. of days in late repayment/1000 For the late submission of shipping documents there will be fine of Rs.2000 for the default and Rs.100 per day for each day of default. Fine for wrong information and incorrect reporting / entry in any Statement required to be furnished to State Bank of Pakistan will be Rs. 100/ per such wrong /incorrect reported entry. Fine for nonsubmission of EPRC by bank within prescribed period will be Rs.20, 000/, 25% of which i.e. Rs.5, 000/, would be non-refundable even on late submission of EPRC. In case of any mistake in EPRC the fine will be charged as Rs. 100/- per such mistake not more than Rs.1000/-. In all preshipment/postshipment loans cases where it has been noticed that shipment(s) was made before/after (in case of postshipment) disbursement of finance, the shipment has to be treated as in order subject to recovery of fine at the rate of Rs.2, 000/ and Rs.100/ per day for the period for which the refinance loan remains outstanding on the part of the bank or up to the date of factual position conveyed to concerned SBP BSC Office, whichever is earlier. Fines under EFS part II In case of non-performance, fine shall be charged at the rate of Paisa 37 per Rs.1000/- or part thereof (product). However, where the performance is in excess of the 50% of the prescribed level, fine will be charged at the rate of Paisa 28 perRs.1,000/- of the shortfall or part thereof. STATE BANK OF PAKISTAN (BSC) FAISALABAD
For any other default by exporter/bank the fine will be charged at the rate of Paisa37 per day per Rs. 1,000/- or part thereof. However depending upon the nature of irregularity by the exporter and / or bank or both, in administering the Scheme, such as misuse of the facilities, utilization of the Scheme on fraudulent and or tempered documents etc., SBP may also consider to place an embargo for a period of one year on the bank and / or exporter or both for availing financing facilities under EFS. Any other Forms required to be submitted to SBP the fine will be as Rs.100 per wrong entry. In case of excess availment the fine will be charged as paisa 37 per day per Rs.1000/-. Conclusion All the functions in refinance schemes unit are performing very well. All the transactions are verified and updated one by one. The only problem is that the system is very slow to retrieve and update data. So the system should be replaced with high speed system for quick access and update data to make the working more efficient.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Currency Management Unit Overview 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 counterfeit Scope 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. STATE BANK OF PAKISTAN (BSC) FAISALABAD
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 penalties Structure
Currency managment unit Remittances Cash monitering and examination unit Fresh Cash issuance Forged notes processing Claim counter/Clearly payable notes STATE BANK OF PAKISTAN (BSC) FAISALABAD
(A) Remittances
Remittances (Chest basis) It means physically movement of funds from one place to another. It may be inflow of remittances or outflow of remittances. Designated branch of NBP perform treasury functions on behalf of SBP BSC where no field office of SBP BSC is located. NBP perform its own banking operations as well as function of SBP BSC. Chest Branch NBP branch at district level which is designated by SBP BSC is known as Chest branch. Currently 17 chest branches are working in Faisalabad region. Every chest has holding cash according to value of business/government payments/receipts. Sub-Chest Branch NBP branch at Tehsil level which is designated by SBP BSC is known as Sub-Chest branch. Total sub chest branches are 224. Both chest and sub-chest branches submit daily report to SBP BSC according to their region. There are 2 possibilities in chest & sub-chest branches regarding their holding capacity: Cash exceeds from its holding capacity. Cash below from its holding capacity.
Cash exceeds from its holding capacity If issue office Lahore found that any chest branch has cash more than its holding capacity then Currency officer Lahore issue order to chest branch to transfer their surplus funds to SBP BSC Faisalabad.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Cash below from its holding capacity If any chest branch has cash balance below of its holding capacity then currency officer Lahore issue order to SBP BSC FSD to replenish it as and when needed. Remittances (Intra field offices) There are 16 field offices of SBP-BSC working in Pakistan. On the order of SBP Head office Karachi, SBP-BSC field offices also send and receive remittances. Field office having surplus cash transfers it to field office which has shortage of cash. Example If SBP-BSC Faisalabad has shortage of cash and SBP-BSC Multan has surplus of cash then HOK send order to SBP-BSC Multan to transfer it to SBP-BSC Faisalabad. Documents Order From HOK by post/mail( CM Approval) Letter to Railway for delivery (Station Master) Letter to DPO for police squad Remittances order to Vault Credit note issued to Railway which collect freight from HOK Boxes are packed in the presences of an authorized person who is responsible till the delivery at destination; he will be responsible to tally the cash which is loaded in box and what is received at the receiving SBP-BSC office. Police squad is responsible for number of boxes. Police strength varies according to value of cash.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
(B) Cash Monitoring & Examination Unit Operations Following are the major operations perform by cash & monitoring & examination unit: SBP-BSC is rigorously following clean note policy from last many years. In addition to regular supply of fresh notes, the following have also contributed to improved quality of banknotes in circulation. o Speedy disposal of soiled notes o Automation of cash processing activities o Discontinuation of the practice of stapling banknotes has all. SBP-BSC issued instructions to commercial banks to sort out banknotes into issuable and non-issuable categories. Only clean banknotes are to be issued to public. To ensure that only clean notes remain in circulation, the field offices of SBP-BSC vigilantly kept on withdrawing the unfit notes from circulation. To implement clean note policy monitoring activities continue throughout the year. Then monitoring team submits report to SBP-BSC. This report is submitted to HOK and also examine by SBP-BSC (FSD).penalty is charged which is calculated by SBP- BSC (FSD). On the complaint of general public examination is also conducted by SBP-BSC (FSD). All the commercial banks are restricted to provide services to general public e.g. Commercial banks provide facility to public to submit their utility bills from 9.00 to 5.30. Commercial banks are also bound to exchange notes of general public. Banks should provide Prize Bonds to general public. They should have coins in sufficient quantity. They should provide coins against currency notes and currency notes against coins on the demand of customer. STATE BANK OF PAKISTAN (BSC) FAISALABAD
(C) Issuance of Fresh Cash Policies are prepared by the Head Office Karachi (HOK) for the issuance of fresh cash. Fresh cash issued by the SBP-BSC for the general public from their counters within the Office and some specific branches are also chosen for the general public to issue the fresh notes. Commercial Banks are also get bundles according to their limit for their account holders to facilitate them. SBP-BSC HOK gives distribution plan for issuance of fresh notes. Sometimes they give the policy and allot the limit to the commercial banks and other institutions and sometimes the HOK gives the liberty to the field offices that they maintain limit for Financial Institutions (FI). This time HOK gives the liberty to maintain limit for each and every FI according to their perception and requirements. Variations may be made among city branches for fresh notes. Inspection team will also check that where these fresh notes are used. Documents required for fresh notes
Submission of Request letter Report about how many fresh notes consumed. Report about where fresh notes are used. (D) Forged Notes Processing Counterfeit money is currency that is produced without the legal sanction of the state or government; counterfeit government bonds are public debt instruments produced without legal sanction, with the intention of "cashing them in" for authentic currency or using them as collateral to secure legitimate loans or lines of credit. Forgery is common in currency notes medium denomination.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Procedure When any currency is captured by Policy which is fake /forged, police will register FIR against the person from whom they recovered fake currency notes by getting clarification from SBP for these fake notes. Forged notes series and number will be mentioned in FIR.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
(E)Clearly Payable & Claim Counter It refers to the claim of notes in the case of old, Torne or any other case due to which that particularly note cannot circulate in the open market. There are two main types of notes presented over the counter.
Clearly Payable These notes are paid on the same day through one window operation to presenter if: Security features are present on the note. Note is not soiled. Note is intact. More than 75% of the note is available including the portrait of Quaid-e- Azam. Accepting Authority Notes of denomination of Rs.10-20 is signed and passed by Senior ACO. Notes of denomination of Rs.50 is signed by TO & ACM. Notes of denomination Rs.100 is signed and passed by TO & ACM (CASH). Claim Counter Clearly payable Claim notes STATE BANK OF PAKISTAN (BSC) FAISALABAD
Notes of denomination Rs.500-1000 is signed and passed by TO, DCM. Notes of denomination Rs.5000 signed and passed by DCM & CM jointly. Claim Notes These notes are paid to presenter after examination by cash department. Notes are claimed if: They are oily, Washed, Burnt. Note is not less than 50%. Portrait of Quaid-e- Azam is destructed intentionally. Security features are not clearly visible. Mutilated More than hale intact. Full cut. Eaten by insects. Discolor/rusty. Undecided and unclaimed cases are sent to double lock in vault where kept for 1 day. Procedure Claim application is filed by customer along with the claim notes. If the note is accepted then it is paid to the presenter next day. If it is rejected, then the note is kept by the cash department and a letter is issued to the claimant that the note has been rejected. The rejected notes are kept for a period of 6 months. The claimant can make an appeal for the note within these 6 months. If appeal is received then they are kept for another 6 months and they are destroyed on the 10th of each month.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
One Window Operation Denominations of Rs.10, 20, 50, 100 are presented over the counter then payment is made on the same day if the value of presented notes is not more than Rs.1000. If the value of presented notes is more than 1000 then the payment will be made on next day. Next Day Payment Denominations of Rs.500, 1000, 5000 will be paid on the next day. There is no limit on the value of presented currency notes. Suggestions Public awareness should be created to attain the clean note policy. Remittance sending procedure should be changed due to much complicated steps are followed like railway time, police dealing and very long procedure of sending a remittance which cost much time wasting (Manual updating). Proper staff backup should be provided to every Unit in case of their absence, rotation or transfer. So the other employees can perform effectively at their post.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Public Account Unit Introduction This 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 Objectives Our 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 PAU The 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. STATE BANK OF PAKISTAN (BSC) FAISALABAD
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. Accounts 1 - Drawing Account When an Officer of a Government Department is authorized to draw funds from Bank without limit such an account is called Drawing Account. Example NSO etc.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
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 b 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Cash Payments & Receipts This section deals with the direct receipts and payments of government accounts. In PAU only the payments will be made against Provincial Government & Federal Government cheques. If the entire particular are correct & verified. He will attached token with cheque then he will place the stamp of signature verification and pass it. Drawing and Disbursement Officer (DDO) or its representative specimen is already kept by PAU. If new DDO is appointed than following document along with its specimen signature card (SSC) has to provide to PAU.
3 Signatures on SSC Cover letter Attested photocopy of staff order Attested photocopy of charge report Attested photocopy of relieving report Attested photocopy of CNIC of DDO . In case of cash receipts, General public and Banks can deposit payments drawn on them in cash. Banks are also issued cheque book against their accounts in SBP (BSC). Cash is received with the challan form. It is entered in system and after proper verification of it with the systematic report; if there is no mistake then vouchers are prepared. Account of concerned bank is debited against the receipt. And hence amount is transferred to concerned account.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Cash Payment Procedure
Cash Receipt Procedure
PREPARATION OF VOUCHERS & DELIVERED TO DAU TALLYING WITH SYSTEMATIC REPORT RECEIVING OF INSTRUMENTS FROM CASH COUNTER RECIEVE MONEY FROM CASH PAYMENT COUNTER AUTHORIZATION ENTRY/INPUT SCHEDULE VERIFICATION (FROM LIST OF RESPECTIVE DEPTT.) TOKEN ISSUED AFTER SCURITNY PRESENTING CHEQUE ON RECEPTION DIRECTLY CASH ACCEPT ALONG WITH CHALLAN FORM CASH DEPARTMENT INPUT/ AUTHORIZATION TICKING WITH SYESTMATIC REPORT IN PAU PREPARATION OF REPORTS & ABSTRACT VOUCHERS TRANSFER OF PAYMENT TO TREASURER STATE BANK OF PAKISTAN (BSC) FAISALABAD
Transfer Payments & Receipts Cheque is presented on window along with Challan form/ Transfer form. Party receives token from concerned officer, if cheques have been passed then instruments are sent to District Account Office on the next day. In case of receipts all the commercial Banks are operating their current account with SBP and they deposit their challan through their cheques in SBP, Govt. accounts are credit and concerned bank will be debited. Types of Accounts (Major Heads) It deals with the fallowing types of accounts Central-I (Non Food) Provincial-I ( Non Food) Central II (Food) Provincial-II (Food) Central III (C/A Railway.) Provincial-III (Zakat from central VIII) Central VIII( Zakat) Provincial-IV (District Govt. accounts)
Central XI (Railway Lahore receipt) Central XVII (Pay and pension railways) Central XVIII (PSDP development projects)
Clearing Payments & Receipts Cheques are delivered to PAU by NIFT. When a cross cheque is issued by Provincial or Federal Government to an individual or big firm, that firm or individual will present to his bank, bank will hand over that check to NIFT which will bring that cheque to PAU clearing section. Clearing Services Offered By NIFT Overnight clearing (24 hours) Same Day/high value Clearing (3 hours) Intercity clearing ( 48 hours) Countrywide local US dollar clearing (not deal in this bank) STATE BANK OF PAKISTAN (BSC) FAISALABAD
Intercity Transfer Clearing
If cheque is presented in a bank other than FSD but it is issued by Faisalabad Account Office then it will come in SBP-BSC FSD office for clearance. Such clearing is called intercity clearing. Same Day Clearing
Same day clearing is also done through this department. This includes urgent clearance with some extra charges. There is a limit on the amount that can be consider for same day clearing i-e cheques of 100,000 or more. Clearing Payment Procedure
Receipts through Clearing NIFT perform the clearing function for SBP. If a customer has to pay a bill against Provincial or Federal Government through any Commercial bank then PAU department will send it to concerned bank through NIFT for clearance. After clearance the concerned bank account is debited according to receipt amount. BANK CHEQUE PRESENTED BY NIFT SCURITNING OF INSTRUMENT INPUTTING/ AUTHORIZATION & PASS WITH LIMIT TICKING INSTRUMENT AFTER VERIFICATION ABSTRACT PREPARATION DESPATCH VOUCHERS TO RESPEFTIVE TREASURER STATE BANK OF PAKISTAN (BSC) FAISALABAD
Clearing Receipt Procedure
Suggestions
To avoid the mistakes and time wastage you should have to make computerized schedules. Procedure should be under one cabin to save the time of employees and customers both. In this way more customers will be served.
DEPOSITED THROUGH BANK COLLECTION BY NIFT INPUTTING/ AUTHORIZATION TICKING WITH CHALLAN ABSTRACT VOUCHERS TO DAU DISPATCH TO TREASURER STATE BANK OF PAKISTAN (BSC) FAISALABAD
Prize Bond Unit History The bank is responsible for the management of the public debt. The working related to issue, Supply, Sale, Encashment and handling of prize bonds. Holding draws thereof and other saving instruments of federal government was transferred to SBP-BSC. Objective 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. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Denominations Early 1960 Rs.5, 10, 11 Denominations Early 1999 Rs.50, 100, 500, 1000, 5000, 10000, 25000 Current Denominations Rs.100, 200, 750, 1500, 7500, 15000, 25000, 40000 Security 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 STATE BANK OF PAKISTAN (BSC) FAISALABAD
Bond Issuance Process
Issuance process of the Prize Bonds is as follows:
1).Printing & Supply of the National Prize Bond
Prize Bonds are printed by the Pakistan Security Printing Corporation (PSPC) in such forms which are approved by the Central Government in consultation with the State Bank of Pakistan. The PSPC will ensure that paper, ink and material which are used for printing of Prize Bonds such as are not easily available to facilitate forgery.
2).Delivery of Prize Bond By The Pakistan Security Printing Corporation Limited
The Currency Management Department decides the demand of prize bonds and give instructions to the PSPC to print the required denominations of the prize bonds or as ordered. The PSPC after completing the printing, move those bonds to Public debt offices situated in Lahore and Karachi. The Public Debt Offices will be responsible for the supply of Prize Bonds to other Offices of the State Bank of Pakistan under their jurisdiction. Prize Bonds will be issued by the Offices of the State Bank of Pakistan at Karachi, Lahore, Quetta, Peshawar, Islamabad, Hyderabad, Multan, Faisalabad, Rawalpindi, Sukkur, Bahawalpur, D.I. Khan, Gujranwala, Sialkot, and Nazimabad. Lahore PDO office covers the SBP (BSC) of Punjab and Khyber Pakhtunkhawa, and Karachi PDO office covers the SBP (BSC) of Sindh and Baluchistan.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
3). Receipt & Examination Of Prize Bond
The Prize Bonds will be received at PDO offices after 100 % examination and counting they are moved to the Field offices same inspection and counting is also done over there and responsibility is then shifted to them. After the prize bonds have been subject to cent percent examination and will be taken in the Stock Account in the Stock register of the Fresh Prize Bonds.
4). Sale of Prize Bond
Prize Bonds are sold against cash and no formalities or documents are required for issuance of the Prize Bond and no need of registration here. Printed Prize Bonds are stamped at the time of issuance; stamp may be manually or automated. That stamp indicates the date and place of issue; this stamp is of tri color Red, Blue and Green in automated format.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Draw Process
Drawing process contains the following steps:
Draw Schedule
Draw schedule is prepared/Announced by National Savings Ministry of Finance Government of Pakistan. Prize money of draw is decided by the National Savings Ministry of Finance Government of Pakistan. Each denomination draw held on 1st and 15th of each month. National Savings give prize of the Bonds by closing the sale of the Prize Bonds for 2 months of that denomination and that 2 months period is called Shut Period.
Denomination (Rs.) Date Month 1500 1 st January April July October 750 15 th January April July October 7500 1 st February May August November 25000 1 st February May August November 1500 15 th February May August November 40000 1 st March June September December 200 15 th March June September December
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Draw Committee Drawing committee consists of 6 members that are following:
Person nominated by Government (chairman) DCM of SBP-BSC office (secretary ACM) Assistant Chief Manager of SBP-BSC office Regional Head offices Joint Director of National Savings of respected city 2 Executive members of Chamber of Commerce of respected city.
Winning Prize Bond Winning prize bonds are further divided into two parts. Small prize money Higher prize money Small Prize Money The 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 3 rd prizes of Rs100, 200, 750, 1500.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Small Prize Money Procedure Higher Prize Money: The 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 1 st and 2 nd 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. Verification of Denominations Rs.100, 200, 750, 1500, 1 st and 2 nd prizes signed by OG2, ACM and DCM Rs.7500, 15000, 25000, 40000 third prizes signed by OG2,DCM and ACM Rs.40000 1 st prizes Rs.7500, 15000, 25000, 400002 nd prize signed by the OG2, ACM, DCM, & CM
Form PB-23 ID card of the claimant Origional/photo copy of bond Directly payment to claimant STATE BANK OF PAKISTAN (BSC) FAISALABAD
Claim Payments
Prize up to 18500 is paid at the same day at counter. Prize above 18500 is paid in 10 working days. Prize up to 500000 is paid in 15 working days. Above 500000 is paid in 20 working days.
Higher Prize Money Procedure
National Saving Scheme (Securities) There are two schemes which are operated in SBP (BSC) these are: I. Special Saving Certificates II. Defense Saving Certificates Fill PB-23 form attatch original & copy of priza bond, ID card copy submitted to receipt & payment counter sent to related PDO for confirmation Receive confirmation Generate register of payment/draw PO Sent to IMU unit for pre-audit system generated authorization On surrender of receipt on due date PO is handed over to claimant STATE BANK OF PAKISTAN (BSC) FAISALABAD
Objective These schemes are introduced by Government to encourage the saving in the public and to get internal finance for its projects. 1. Defense Savings Certificate
The Government of Pakistan introduced Defense Savings Certificate scheme in the year 1966. The scheme has specifically been designed to meet the future requirements of the depositors. This is 10 years' maturity scheme with built in feature of automatic reinvestment after the maturity. These certificates are available in the denominations of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/-
Who Can Invest?
These certificates can be purchased by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly.
How to Purchase?
These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Offices (PPO), Authorized branches of Scheduled Banks and State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the Computerized National Identity Card (CNIC) or in case of a foreign national, a copy of the Passport is required to be attached with the application form.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Mode of Deposit
These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.
Investment Limit
The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in this scheme.
Encashment
These certificates are cashable at par any time after the date of purchase. However, no profit is payable if encashment of DSC is made before completion of one year. Further, certificates purchased on or after 15-11-2010 cannot be automatically reinvested.
Return (Profit)
In this scheme the profit is paid on maturity or encashment for completed years. Every Rs.100, 000/- will become Rs.106,000/-.after one year income tax is deducted @10% on profit payment.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Tax & Zakat Status
At present withholding tax @ 10% is deductible at source on the profit(s) earned. The Zakat is collected at source as per options.
2. Special Savings Certificates (Registered)
Keeping in view the periodic needs of depositors, this three years' maturity scheme was introduced in February, 1990. These certificates are available in the denomination of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=. Profit is paid on the completion of each period of six months.
Who Can Invest?
These certificates can be purchased by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly.
How to Purchase?
These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Office (PPO), Authorized branches of Scheduled Banks branches and the offices of State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the Computerized National Identity Card (CNIC)
STATE BANK OF PAKISTAN (BSC) FAISALABAD
or in case of a foreign national, a copy of the Passport is required to be attached with the application form.
Mode of Deposit These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.
Investment Limit
The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in the scheme. Tax & Zakat Status The profit retained on these certificates is paid after the deduction of 10% withholding tax at source. Zakat is collected at source as per rules the rate of zakat is 2.5%. Suggestions Change internal environment make it more comfortable. Proper furniture sitting and air condition system. Save time & efficiency in work due to increase the number of employees Proper couching classes and training Specially focused workshop, seminar and awareness programs Access to data easy
STATE BANK OF PAKISTAN (BSC) FAISALABAD
On-site Verifications Introduction 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Ways of Onsite Verification The concerned SBP Office will undertake random onsite checking of refinance cases at banks and will examine the entire documents. Verification team of SBP BSC Offices will verify at least 70% of the amounts of refinance disbursed under each part, ensuring coverage of all types of cases i.e. Small, Medium and large, during the verification process. In case irregularities are pointed out involving recovery of fine on account of any default in processing of case or scrutiny of shipping documents, fines levied upon banks for such irregularities shall not be refunded. However, where such irregularities / deviations were found to have been willfully suppressed by the employees of bank the concerned institution shall be at discretion for taking such punitive actions as considered appropriate by the management of the bank.
The concerned SBP-BSC Office will nominate their representative officers for the verification of EFS cases at any particular branches of bank. The SBP-BSC Office will issue a letter to the concerned bank at least 15 days prior to schedule visit for verification of EFS cases without intimating the actual date of visit to the concerned bank. The bank shall extend all possible help for the smooth checking of the cases and the officials of the bank shall cooperate with the authorized officers to carry out their work expeditiously. Such verification shall be in addition to the regular inspection of the bank conducted by our Banking Inspection Department. As such checking by Export Refinance Section of SBP-BSC Office, shall not absolve bank from its responsibilities under the Scheme.
In case of transfer of limit/performance under EFS PartII the NOC issuing SBP BSC office will conduct onsite verification of EE-1/EF-1 statements and relevant documents during onsite verification of the bank even if no loan has been availed by the exporter at that bank. Any violation observed therein will be communicated to the NOC receiving office, in order to charge fine for violation under the provision of EFS. On site verification of documents against EE1/EF1 statements will also be carried out at STATE BANK OF PAKISTAN (BSC) FAISALABAD
bank who issued NOC in favor of other banks within one centre for the purpose of transfer of exporters limit/performance.
Part 1 Loans: Verification will be of: Annexure D EPRC (Export Proceeds Realization Certificate) Contents of Annexure D: Name and address of the Direct Exporter Name and address of the Indirect Exporter ELC/FEO against which finance was obtained No. Amount Date ILC/SPO against which finance was obtained No. Amount Date No. of ELC/FEO against which shipment was effected Name of the commodity exported Commodity supplied Date of shipment (As per B/L) Date of Supply Amount Date
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Particulars of relevant E forms Nos. in case of shipment by DE No. Amount GRN / Truck receipts Railway Receipts in case of supplies by IDE Amount Date Date /Amount of finance availed by exporter Date / Amount of refinance obtained from SBP by financing Bank Amount/ Period of refinance utilized in the name of DE Amount/ Period of refinance utilized by IDE Profit/Return charged from DE Profit/Return charged from IDE Date of realization expected Contents of EPRC E-Form No. Description commodity exported B/L and date and country of destination No. and date of invoice with value Amount realized Foreign currency Pak rupees Date of realization Freight Commission Insurance Net FOB value Foreign currency Pak rupees STATE BANK OF PAKISTAN (BSC) FAISALABAD
Date of submission of triplicate copy to the SBP Statement in which transaction has been (will be reported) to SBP Wholly payment, advance/partially All these particulars are verified through: SWIFT letter (for date of realization of export proceeds) Utilization certificate (how much amount of finance is used for export). Part 2 loans Verification will be of: EE 1 Statement EF 1 Statement Through checking their shipments from FEOD (Foreign Exchange Operations Division) because it receives the monthly returns from authorized dealers.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Foreign Exchange Operations Division Introduction
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 objectives Our 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 STATE BANK OF PAKISTAN (BSC) FAISALABAD
Sections of Foreign Exchange Operations Division
1).Returns The main function of this department is to Record and monitor all the Foreign transactions. All types of returns are received in this section. In this section documents with different forms are separated. Documents with E Forms are sent to the Export section and documents with Form- I are sent to the Import section. FEOD will further record the transactions on summary statements. S1 is for buying and selling
FEOD Returns Export Overdue DLTL section Miscelleneous Import/export STATE BANK OF PAKISTAN (BSC) FAISALABAD
Export Returns (Inward Remittances)
In export section Inward Remittances are recorded on JO-3 Schedule In case of Exports Payment Due reporting would be done on Schedule A-1/O-1 and E- forms are also checked to check the Correctness of Shipment. At the front side of the form-E following particulars are checked. 7digit code (this code is allotted by SBP) National Tax Number, I D card number Date of issue Place of issue Origin of Goods Name and Address of AD Name of Beneficiary Description of goods Quantity Invoice Value Port of Shipment Date of shipment
At the backside of the E Form following particulars are verified: Coding of transaction by AD/ SBP Country to which exports are made Country code Amount in figure and Amount of words Quantity Mode of transportation STATE BANK OF PAKISTAN (BSC) FAISALABAD
In case of Advance or Partial Payment Recording would be done on A2/O2 form. The only difference between these two is that in case of advance payment E- form is not required so exporter can utilize it for his future exports while in case of partial payment E-form in should be mentioned. Similarly if amount of Trade is more than USD 10,000 then it is recorded on Form R while if it is lower than that then it is recorded on IRV (Inward Remittances Voucher).
Import Returns (outward Returns)
In Import section all the imports Returns of the those importers are recorded who get the finance from the Commercial Banks whose been licensed by the SBP. The importers are allowed 120 for the import of the goods; the imported commodities will have to be brought in to the boundaries of Pakistan. These imports can be made either through the documentary credit or through the advance payment made by the importer. In case of the advance payment, the importers are required to submit A Performa invoice of the deal and An Undertaking form signed by the exporter regarding the agreeing upon the deal of 120 days for the accomplishment of the consignment otherwise he will be penalized with a certain percentage of the consignment Reporting of Import is done on E2/P2 Schedule If Foreign Exchange is to go out of country for travelling than that would be recorded on E3/P3 Schedule. While if the FE is to go out for the purpose other than trade than that would be recorded on E4/P4 Schedule.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Miscellaneous returns Under this section of the unit, the record about all the private remittances except the imports and exports of a particular country is being maintained. The categories of these miscellaneous returns are as below Family remittances Educational fees of Foreign Universities. Commission Charges and etc. The form to be submitted by the person is called as M-Form and is recognized by its red color. In Summary S6 if the Commercial Bank sells the Foreign Exchange then it would be recorded on Schedule JO3 and if they purchase the FE to make payments then that would be recorded on Schedule C. 2. Export Overdue section
Under FERA-1947 the exporter is bound to bring in the foreign exchange earned through a particular international trade within 180 days after the granting of the date of shipment. If the exporter fails to do so he will be given a show cause notice. The reporting is done under Export overdue Reporting System (EORS). In this all the Ads submit the report all the unrealized Export bills to SBP (BSC) on V-16 statement and to HOK via electronic Media.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Statements For Export Bills Overdue
Procedure for Filing the Complaint against the Exporter After 180 days or due date, the AD will provide a V-16 form to the SBP (BSC). While AD and exporter is given a show cause notice Show cause notice for A.Ds: To submit all the documents within 21 days. Show cause notice for exporter: To submit the justification for non-realization of 21 days If exporter or A.Ds do not respond to the show cause notice then Legal notice is given to A.Ds and Exporter to submit the above mentioned documents within 21 days. If the exporter or A.Ds still do not respond to the legal notice then outstanding then a complaint is lodged against the Exporter/AD in Foreign Exchange Adjudication Court.
V-15 Statement for Realized + outstanding Export Bills. V-16 Statement for un Realized Export Bills. V-17 Statement for Realized Cases. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Procedure for Filing the Complaint against the Exporter
When bill becomes overdue and case is referred to adjudication, we have a format of launching complain: Attach documents collected from AD Attach notices sent to AD and exporter Then case is closed after adjudication decision and penalties are charged to AD or exporter, whoever is defaulter. Penalties charged by Adjudication For authorized dealer: Rs.5000 for first day and Rs.2000 per day case outstands till the default exist. Penalty for Exporter: It is up to 5 times of export proceeds. 4. Draw-Back Local Taxes And Levies Section
DLTL was established to facilitate the exporters of the country. When an exporter exports some eligible goods, govt. gives subsidy to him to encourage exports from the country. The rebates for different exported commodities are mentioned below: STATE BANK OF PAKISTAN (BSC) FAISALABAD
Procedure for Availing DLTL
First of all The Exporter has to provide the Following Documents to the SBP through his Bank to get that Rebate. The documents are: Annexure 3: Exporters Claim Annexure 4: Banks undertaking to SBP Appendix 2: Association Certificate. Appendix 3: Exporters Undertaking Copy of the Invoices Copy of the E-Form with Prescribed Stamp. 1 copy of the E-form would be for Exporter 1 would be for AD ( commercial Bank) 1 would be for SBP. Copy of the GD form while in case of old GD form Examiners Report is also required. Shipping Documents (B/L or Airway bill). FEOD after verifying all these documents, credit DLTL to the banks account and the bank will credit it to the exporters account according to the Schedule of Government of Pakistan.
1% on Processed Fabric 2% on Home Textile 3% on Garments STATE BANK OF PAKISTAN (BSC) FAISALABAD
Moreover, if SBP find any discrepancy, forgery or any other fault then it will impose the penalty to that AD and that penalty would be KIBOR+4% penal interest.
5. Miscellaneous Section
This section is actually for currency Companies so it will involves In this Advance Section: Advance Payments would be there and for that all the Shipping Documents would be required for Re-imported Goods. In case of Excess payment following things would come under this: Foreign Exchange companies Receipts and Payments. Banks Guarantees Letter of Credits.
Sections of Miscellaneous
5 sections come under this head. Miscellaneous Export Cases Import Cases Advance Payments Foreign Exchange Companies EE/FE statements.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Miscellaneous Export Cases
It is further divided into following Sections: Return of Consignment Change of the Buyer Import-Cum-Export cases Time Barred Advance Payment Export of gold jewelry
1. Return of Consignment
As we are sitting in the buyer Market so thats why there arise some situations like demand gets down, quality mismatch or importer goes to liquidation in which the importer refuses to accept the consignment. So in that case there would be no other way except to bring back that consignment the Exporter need to submit the following documents to get approval from SBP. Exporters Request ADs Forwarding letter GD 1 Copy E-Form Copy Commercial Invoice Correspondence Between importer/Exporter and Foreign Bank.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
2. Change Of Buyer &Discount
If exporter has to change the Buyer then again permission would be taken from the SBP along with the reason of the refuse from the previous importer. The documents required would be: Exporters Request ADs Forwarding letter GD 1 Copy E-Form Copy Commercial Invoice Shipping Documents (GD-1, E-Form, Advices, and B/L). Revised Contract. Sometimes exporter offers discount on nominal defected goods to importer. In such case up to 10% discount of invoice value is allowed. For offering more discounts, approval from SBP BSC is required. 3. Import-Cum-Export cases
Sometimes if importer doesnt get satisfied with the quality of the goods imported then he send back the consignment to the exporter and then the Exporter removes all the discrepancies and make that goods according to the contract between them. So such cases would be reported under this head. 4. Time Barred Advance Payment
According to the new regulation of FE Manual the Advance payment must be utilized against the proper head for which it has accepted and it get expired within 1 year. So following documents are required: Request letter of the exporter STATE BANK OF PAKISTAN (BSC) FAISALABAD
ADs Forwarding letter Original and Advance payment vouchers Explanation of the purpose for which payment has accepted. If Remitting Party is other than the original Remitter then NOC would be required from the original Remitter.
5. Export of Gold Jewelry
Export of gold jewelry is always by hand. It is required to bring foreign currency in Pakistan equivalent to the value of gold exported. For less foreign currency, remaining gold will be brought back. Shortness of foreign currency is reported by AD to SBP BSC and then penalties are charged accordingly.
Import cases
In case of Import cases the following documents are required Reason of advance payment for import approved by SBP. Importers request Contract Copy Correspondence between importer/exporter. In 120 days the importer is bound to bring the things in the country and need to submit the Bill of entry issued by Custom Office. Commercial Invoice In case of import of machinery Request letter by the owner Forward Letter/ contract Performa invoice ( Expenses+ Fault+ Repairing Time) STATE BANK OF PAKISTAN (BSC) FAISALABAD
1) Establishment of L/C
If there comes any amendment in the payment clauses of the L/C then it must be approved from SBP and permission is required only if there is extension in payment terms. If there is contraction in the payment terms then there is no need to get approval from SBP for that. While following documents are required: Request letter ADs Forwarding letter L/C Copy Revised Contract Correspondence between Importer/Exporter.
2) Advance Payment for imports
Advance payments based on the following documents: Contract basis (up to $10,000 advance payment allowed) LC basis (100% advance payment allowed)
3) Excess payment
Payment can be in excess the amount certified on I-Form against imports due to any reason. SBP-BSC allows the A.D that they can approve excess payment up to 5% for import purpose. When the amount of excess payment exceeds 5% then A.D is bound to get permission from SBP-BSC.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
4) Bank guarantee for Umrah services
It provides services for hajj & Umrah to travelling agents that are registered by ministry of Saudi Arabia religious affairs.
5) Re-export of imported goods
For the re-export of imported goods importer must have to take approval from SBP through their ADs.
Pre & post licensing
EPD (Exchange Policy Department) give licenses to the Companies and do inspection and submit the reports to the SBP. FEOD conducts pre and post licensing inspections of those companies.
Verification of EE/EF statements
All the Ads submit their EE/FE statements to FEOD which will verify those statements and after this verification those Ads submit these statements to Export Refinance Department and get limit from them.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Foreign Exchange Adjudication Department Introduction 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 exporter
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Adjudication 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 satisfactory If 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Adjudication Courts In Pakistan Karachi 3 courts Lahore 2 courts Faisalabad 1 court Sialkot 1 court Multan 1 court Appointment Of Adjudicated Office Adjudicated officers are now delegated with Governors notification published in Gazette of Pakistan. First they were appointed with Presidents notification. Conclusion After visiting the Foreign Exchange Adjudication Department, we have learnt about how the export overdue cases are dealt. Adjudication department mostly endeavors to be very lenient with the authorized dealer or exporter while making the decision because its basic purpose is not to charge penalty but to repatriate the export proceeds. This department plays very important role for settling the cases between exporter/authorized dealer and Foreign Exchange Operations Department. STATE BANK OF PAKISTAN (BSC) FAISALABAD
TAYYEBA BASHIR (University of the Punjab) Page 77
Access to finance unit Mission 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. Development Finance Support Services DFG (Development Finance Group) is the parent department of the DFSD and AFU. The main objective of the DFG is to create or develop an inclusive financial system in the country under the umbrella of SBP-BSC. The DFG make policies and strategies to promote the financing schemes of the SBP. It is the way to strengthen the economic growth of the county by creating awareness about the financial services and availability of these services to the rural and lower income groups. The presence of DFG at the SBP HOK facing difficulties in disseminating information at grass root levels so DFSD unit was formed at the Karachi field office and later AFU units were established at 13 field offices.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Reorganization of DFSD Development Finance Group (DFG) was established in SBP and simultaneously DFSD and its field units have been set up in the 13 offices of SBP Banking Services Corporation (BSC). Later on in year 2011, the functions of Export Finance Division (EFD) and DFSUs have been merged to Development Finance Division (DFD) and DFSD renamed as AFU.
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-BSC 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Core functions of AFU 1 Focus Group Meeting Focus Group meetings are also being conducted by the AFU and the meeings conducted in that particular way. 2 Biannual Meetings
AFU provides and interactive forum to meet with the stakeholders and that is instrumental both in terms of disseminating the Polices and getting their feedback regarding different issues they faced. So meetings are called in which Area Manager/ Chief Managers along with the Representatives of different Groups are invited and their feedback is obtained. If the issues are of operations level then they get resolved by the BSC itself But if the issues are of Regulatory level then that issue is forwarded to Headquarters.
3 Awareness programs on development finance One of the major objective of DFSD is to disseminate DFG-SBP polices &programs the DFSD & its affiliate AFUs organized 93 awareness sessions in which more than 7,000 individuals were approached in various parts of the country. The awareness programs have helped in reducing communication gap & provide a platform to stakeholders to discuss the issues they have to face. 4 Exhibition, Melas AFU conducts such events every year by interacting with a commercial bank deciding the targeted Group. Before conducting an event at a particular place, the AFU arranges the meetings between the stakeholders of all the sectors. STATE BANK OF PAKISTAN (BSC) FAISALABAD
5 Seminars/workshops Seminars and workshops are also conducted by the AFU for the awareness of the stake holders. 6 Seminars & workshops It is another effective tool for finding more practical ways of efficient use of development finance& making it compatible with the cultural norms and resource availability of the respective region. 7 Capacity Building Programs It also provides the training to the employees of the commercial banks so that they may understand the techniques and procedures of granting loan. It can be said that these steps are to build up the experience and capacity of those employees to perform their functions better than before. 8 Development of linkages with academia The missing linkages between industry and academia remain one of the reasons behind inadequate supply of human resources with the required skill set. Therefore, developing relationships & establishing links with educational and research institutions is much needed as through these links the educational institutions get oriented about emerging development finance activities.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Research Activities It also conducts research activities and carrying sectorial assessment studies to know about the potential of every sector. It collects regional and/or branch-wise data from Data Warehouse or DFG Departments for assessing banks performance as well as to study regional trends in growth and development of SMEs, Micro and Rural Finance. Monitoring & Evaluation AFU monitor the targets of agriculture financing as per plans finalized by ACAC (Agriculture Credit Advisory Committee). Firstly the Targets assigned were Mandatory and those were finalized by SBP but now Indicative Targets are assigned to Banks by the mutual negotiation between SBP and Banks AFU monitor banks performance towards achievement of their regional and branch-wise targets of development finance using the BSC field offices. It also develops and maintain province-, region- and district-wise development finance database. This will help us optimally target our resources to increase outreach of financial services in un-banked/under-banked areas/sectors. Liaison with Stakeholders AFU liaison with Stakeholders and coordination with Regional chiefs and General Managers of Commercial Banks regarding Development Finance related matters.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Customer facilitation center AFU also deals with all the Complaints of the customers regarding Commercial Banks. These complaints are normally of misbehavior and excessive service charges. Complaint handling Procedure First of all the customer will have to write an Application to SBP and further he will have to attach the Copy of his CNIC. Then AFU will write the letter to the Regional Branch of that Bank and refer that case to them and further impose them to solve that issue within 7 days. Then the Regional Branch will address to that Branch about which the complaint have been filed. That branch will resolve the matter and get the letter of Satisfaction from that Customer. Then the Regional branch will send that letter to the SBP-BSC.
Some Support Functions Preparation of business plan of local offices Management of Customer Facilitation Center(Complaint handling) Management of IBP local center functions
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Major Sectors Focused by AFU Major sectors that are focused by AFU for promotion are Agriculture SMEs Islamic banking Microfinance AFU 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 sectors Research 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 Faisalabad These research activities are performed in collaboration with universities and other institutes.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Feedback of the Stakeholder Feedback of the stake holder plays the key role for all the promotions and development programs because it gives the knowledge how much people understand the concepts of the financing schemes and financing facilities. Feedback from the stakeholders is also important to amend and improve existing policies and formation of new policies for the development of our priority sectors. Suggestions SBPBSC should take more attention towards awareness programs because there is still lacking in the information which could reach properly to those communities who actually require such development programs. For resolving the complaints of customers SBP should have to make a sub field unit to solve the issues of long distance areas.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Deposit account unit Introduction 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 Unit The 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
STATE BANK OF PAKISTAN (BSC) FAISALABAD
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-BSC. Structure As per banking Manual-2013, following Units are functioning in DAU:
Deposite Accounts Unit Scheduled Banks Section Clearing Section Foreign Currency Section Remittances Section Miscellaneous Section STATE BANK OF PAKISTAN (BSC) FAISALABAD
1. Scheduled Banks Section
Current Account section Current account section deals with commercial banks therefore it is called Bankers bank. It provides daily statement of accounts to commercial banks for their accounts. It allows commercial banks to transfer funds from one city to other through T.T. Every schedule bank is required to maintain an account at field Office of SBP-BSC to perform and run their operations. There are 37 Current Accounts maintained at Faisalabad and all are operational. Opening of Current Account in the name of Schedule Bank Scheduled banks approach the Office of the SBP BSC (Bank) for opening their branch as provided in the Scheduled Banks Regulations. The following documents are required to be submitted to the office of the Bank in connection with the opening of accounts by Scheduled banks through their regional or Head office.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Current accounts opening requirements 1) Account opening form. 2) Specimen Signature card (S.S card). 3) SBP licensed and permission letter 4) 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 resolution 12) 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 Ratio Commercial 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. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Principal Account Principal accounts of every commercial bank are maintained at HOK. Head Office of commercial bank maintains its accounts at SBP-BSC HOK. Subsidiary Accounts Some 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. Operation Inputting of entries in the respective menus. Authorization of all the above input entries. Retrieval of Reports of Day Books Final reports of Other Scheduled Banks Retrieval of balance statement of National Bank of Pakistan Inputting of non-Globus instruments received from various sections. Authorization of various Non-Globus entries emanating from different Units Issuance of daily Bank balances to Scheduled Banks.
2. Clearing Section
After 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. STATE BANK OF PAKISTAN (BSC) FAISALABAD
3. Foreign Currency Section
In 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 Section It 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.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Types of Remittances The following types of remittances are issued by the offices of the State Bank SBP BSC:
Online Transfers As and when an application for online transfer is received, the concerned official will immediately scrutinize it to ensure that: 1. The application has been made in the form prescribed by the Bank 2. All the requisite particulars have been filled in the application form; 3. Rs.1000/ and Rs.100/- per transaction have been recovered on exchange and fax charges respectively. 4. In case OT is required by a Government Department no exchange will be charged, Remmittances Online Transfer For Banks only Mail Transfer For Employees Bank Draft For Employees Government Draft For Govt. Departments STATE BANK OF PAKISTAN (BSC) FAISALABAD
5. The purpose of remittance should be clearly stated.
Mail Transfers (M.T.) In case a Mail Transfer is required by an employee, he will apply on the prescribed form. It facilitates the employees of SBP BSC free of charge. It is the fastest way of fund transfer. Transfer of funds between the employees of State Bank of Pakistan and its subsidiaries. It benefits the employees in the fallowing ways; Fastest way of money transfer Employee can avail it free of charge Physical movement of funds is avoided Example An employee of SBP-BSC Faisalabad wants to send cash to SBP-BSC Lahore, then he fills in an application mentioning the name of beneficiary in Lahore and deposit cash, DAU after finalizing formalities, send fax advice to SBP-BSC Lahore then SBP-BSC LAHORE generates system copy of payment order and gives it to employee concerned of Lahore Office. Bank Draft (B.D) It can be drawn on SBP-BSC or NBP. This is only for staff. An application is filled in and deposit cash at SBP BSC. Then the drawer SBP BSC gives the B.D to employee and sent advice to the NBP branch only on which B.D is drawn. That employee receives the cash after presentation of B.D.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Government Draft (G.D) Government draft is issued only for Government Departments. All Government accounts are maintained at SBP-BSC offices. Provincial departments move funds freely with in the province. If Provincial departments transfer funds to other province, then commission is charged on prescribed rates. An application is made for submission of Government draft. Govt. Draft (G.D) is supplied to the departments who apply for G.D. G.D advice is sent to respective branch of NBP. When G.D is presented the officers NBP branch compare the G.D amount and other particulars with the record.
5. Miscellaneous Section
Loan and advances The State Bank is authorized to make loans and advances to Local Authorities, Scheduled and Cooperative Banks, Federal and Provincial Governments repayable in accordance with the terms and conditions of the loan against securities specified in the Act. The State Bank has formulated policies under which advances are granted to Scheduled and Cooperative Banks against proper securities.
Accounting Procedure of Overdrafts to Banks Separate overdraft account will be opened in Globus through HOK for each bank utilizing the facility. Withdrawals from overdraft account will be allowed by means of cheque and will be STATE BANK OF PAKISTAN (BSC) FAISALABAD
restricted to twice a week. Separate cheque books will be issued to each bank for the purpose. Interest on overdraft accounts will be calculated on the basis of daily products and will be recovered by debit to the current account of the borrowing bank at the end of each month or at the time of final repayment of the overdraft whichever is earlier. Government Treasury Bills Issue Apart from the floatation of new loans on behalf of the Federal and Provincial Governments in Pakistan, the State Bank of Pakistan is required to hold periodical auctions of the Government Securities namely Treasury Bills/Bonds in the manner approved by the Government. The objective of holding auctions is to raise funds for the Government from the market. Treasury Bills auction are held on fortnightly basis by Domestic Markets and Monetary Management Department whereas bond auction schedule is intimated by the Federal Government.
Settlement of Auction On receipt of the realized amount of the Treasury Bills from the successful bidders in response to the advice issued to the primary dealer, the entries will be passed by the Globus. A statement showing the Treasury Bills issued and discharged will be sent to the following through Globus. 1. The Director, Domestic Markets and Monetary Management Department, State Bank of Pakistan, Karachi. 2. The Director, Finance Department, State Bank of Pakistan, Karachi. 3. Domestic Markets and Monetary Management Department will send the same statement to Secretary, Ministry of Finance, and Government of Pakistan. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Repo facility against Treasury Bills (3 Days Discounting) The State Bank provides access to Repo facility against Government of Pakistan Market Treasury Bills when offered by Scheduled banks maintaining a Current Account as well as Subsidiary General Ledger Account (S.G.L.A.) with the State Bank. Open Market Operations may be conducted by State Bank of Pakistan in two ways: 1. Firstly, Outright purchase and sale of Government Securities. 2. Secondly, Repo transactions. (Purchase and ReSale and Sale and RePurchase Contracts).
Scheme of Advances against Pledge of Bills In addition to the Demand Promissory Note and Agreement, the bills lodged by scheduled banks for taking advances will also be accompanied by the certificates signed by the borrowing bank and the drawer of the bills respectively. The Demand Promissory Note and Agreement will remain good and valid for a period of 3 years as in the case of advances against Government Securities. Advances will be granted after allowing a margin of 5% over the amount of bills tendered.
T.T. /D.D. Discounting Facilities In addition to the financial accommodation allowed to scheduled banks by way of Demand Loans, facilities for discounting of T.T.s. /D.Ds. are also made available to them against the collateral of Government Securities. The Banking Policy and Regulation Department SBP- BSC fix the limits for discounting of T.Ts. and D.Ds. STATE BANK OF PAKISTAN (BSC) FAISALABAD
Exchange on T.T. /D.D. discounted is charged at the rate of 0.036%. Fax charges at a uniform rate of Rs.100/are also to be recovered (in case of T.T.) from the bank concerned. Purchase of Demand Drafts The offices / branches of the Bank may purchase at par demand drafts, cheques and other analogous documents payable at sight at places where an office/branch of the Bank is conducting banking business. The facility of purchase of demand drafts etc. is restricted to the permanent employees of the Bank and the cheques so tendered are drawn at a place where there is an office of the State Bank of Pakistan. It may also be ensured that the employees utilize this facility only for their bona fide personal purposes and the amount involved should not exceed one month take home salary of the employee. Cheque should not be drawn on a bank situated in the same city. Suggestions about Deposit Accounts Unit It was observed: In this Unit there should be a substitute of an employee in case of his absence or leave so that it would not create burden on other coworkers.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
Glossary
Balance of Payments The balance of payments (BOP) is a statistical statement that systematically summarizes, for a specific time period, the economic transactions of an economy with the rest of the world.
Currency in Circulation Currency in circulation refers to currency held by public i.e currency outside the banking system.
Non-Performing Loan A non-performing loan is a loan that is in default or close to being in default. Many loans become nonperforming after being in default for 90 days, but this can depend on the contract terms.
Reserves Assets
Reserve assets consist of those external assets that are readily available to and controlled by monetary authorities for direct financing of payments imbalance. In BOP, they cover monetary gold, SDRs, reserve position in the fund, foreign currency reserves and other claims.
STATE BANK OF PAKISTAN (BSC) FAISALABAD
References
Employees of each Division in the Finance Department. 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