1

Introduction to SBP:

Introduction:

The State Bank of Pakistan (SBP) is the central bank of Pakistan. After its nationalization
in 1974 the scope of its functions was considerably enlarged. There are two subsidiaries
of SBP namely State Bank of Pakistan-Banking Services Corporation (SBP-BSC) and
National Institute of Banking and Finance (NIBAF). The Governor SBP is chairperson of
Boards for both the subsidiaries.

SBP – BANKING SERVICE CORPORATION:

SBP-BSC (BANKING Service Corporation) came into existence after bifurcation of State
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Bank of Pakistan in January 2002 and since then has been working as the operational
arm of SBP for currency and credit management, facilitating inter-bank settlement
system, dealing in savings instruments of the government, collecting revenue and
making payments for and on behalf of government and operational work relating to
management of debt and foreign exchange. SBPBSC Board comprises of all the members
from the Central Board of SBP and the Managing Director of SBP-BSC.

VISION statement OF SBP - BANKING SERVICE CORPORATION

“To develop SBP into a dynamic and efficient organization equipped with
requisite technology and human resource capable of extending sustainable
support to the State Bank of Pakistan in achieving its objectives”

MISSION statement OF SBP – BANKING SERVICE CORPORATION

“To provide excellent banking and financial services to stakeholders besides

ensuring implementation of SBP policies in order to command their trust and
respect”

NIBAF – National Institute of Banking & Finance:

NIBAF was established by PBC and was taken over by SBP in 1997. NIBAF is the training
arm and is responsible for design, delivery, development and evaluation of trainings.

Vision of NIBAF is “to be apex institute of Human research development in field

of
Banking & Finance”

FUNCTIONS of STATE Bank OF PAKISTAN:

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Like a Central Bank in any developing country, State Bank of Pakistan performs both the
traditional and developmental functions to achieve macro-economic goals.

TRADITIONAL Functions:

● The primary functions including issue of notes, regulation and supervision of the
financial
● system, bankers’ bank, lender of the last resort, banker to Government, and
conduct of
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● monetary policy.
● The secondary functions including the agency functions like management of public
debt,
● management of foreign exchange, etc.
● Other functions like advising the government on policy matters and maintaining
close
● relationships with international financial institutions.

Promotional Functions:

● Development of financial framework.

● Provision of training facilities to bankers.
● Provision of credit to priority sectors.
● Islamization of the banking system.

Departments of STATE BANK OF PAKISTAN:

State bank of Pakistan is giant entity and has a very wide scope of operations which it
performs in variety of fields related to banking. For better management and efficient as
well as effective execution of these actions in different fields, State Bank of Pakistan has
formed number of departments. Each department is exclusively responsible for taking
care of all activities that belong to its department’s scope. A list of more functional
departments of SBP is given below:

1) Agricultural Credit Department

2) Banking Inspection (on-site) Department
3) Strategic and Corporate Planning
4) Human Resource Department
5) Banking Policy & Regulation Department
6) Banking Surveillance Department
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7) Business Support Services Department

8) Domestic Market & Management Department
9) Economic Analysis Department
10) Exchange Policy Department
11) External Relations Department
12) Financial Market Strategy & Conduct Department
13) Financial Stability Department
14) Information System & Technology Department
15) Housing Finance Department
16) Internal Audit\ Compliance Department
17) International Market and Investments Department
18) Islamic Banking Department
19) Monetary Policy Department
20) NIBAF Karachi & Islamabad
21) Off-site Supervision & Enforcement Department
22) Payment System Department
23) Research Department
24) Risk Management and Compliance Department
25) Micro Finance Department
26) SME Finance Department
27) Training and Development Department

During our visit to field office of SBP – BSC in Multan, our focus was on gathering
information in reference to Human Resource Department, Training and Development
Department, Information systems Department
apart from understanding organizational and Management structure that is being
practiced in State Bank of
PAKISTAN.
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Organizational Structure of SBP:

Organizational Structure:
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Chain of Command:
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ORGANIZATIONAL STRUCTURE in SBP – BSC, Multan:

In Field office of SBP – BSC, Multan Branch, there is one C.M (Chief Manager) (OG5
grade), who controls the whole setup in Multan Branch and directly answerable to
Managing director and Governor of SBP. There are four D.C.M’s (Deputy Chief Managers)
(OG4) under C.M and they are responsible for their respective department in SBP – BSC,
Multan.

- CHIEF Manager (1)

- DEPUTY Chief Manager (5, including C.M)
– Assistant Chief Manager FOR their respective divisions (12, including 4 D.C.M)

Names of 8 divisions in SBP – BSC, Multan are mentioned in below:

1. Administration Division (Admin Department)

2. Audit Division (Admin Department)
3. Foreign Exchange Operations Division (Admin Department)
4. Banking Division (Banking Department)
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5. Issue and Treasury Division (Banking Department)

6. Prize Bonds Division (Banking Department)
7. Maintenance Unit (Engg.)
8. Adjudication Court (FEAD)

Moving Towards the Responsiveness:

For any organization to work successfully there is the need for efficiency and
responsiveness. But the important thing is that there are huge trade offs between
Responsiveness and Efficiency.

If any organization goes to become more efficient then he loses the responsiveness.
Similarly, if the organization goes to achieve more responsiveness then he loses the
efficiency. There there is a need of proper and perfect mix for both of them to achieve
the organization goals. So that organization could be run successfully.

As, far as SBP is concern, SBP is committed to high standards of Corporate Governance
and Management. In recent years major initiatives have been taken to improve corporate
governance and management structure at SBP. The Central Board reconstituted its
committees and to make them more responsive to changing needs of SBP. These
Committees comprise of non-executive directors and representatives from the
management in order to have a comprehensive review and analysis of various proposals
before they are considered by the Board. The composition of NIBAF Board-a subsidiary of
SBP on training- was changed in order to provide an opportunity to thoroughly deliberate
upon policy issues and quality of training programs at NIBAF by appointing prominent
economists and individuals from academia.

As being a responsive organization, now State Bank has the following focuses:

1. Improved R & D Dept.

2. More focus on HR Strategic Role
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3. Maximum Attention to the Workforce Development

4. More Support from IT to maximize the Efficiency
5. Flexible Payment System Department
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Human Resource Department of State Bank of

Pakistan:

Mission Statement:
To transform the State Bank of Pakistan into an “Employer of Choice” which nurtures
talent through its enabling culture.

Vision Statement:
We are committed to excellence at acquiring, developing and retaining the right talent
by:

• Aligning our HR policies with market

• Serving as a strategic partner to the line Departments

• Administering superior and prompt HR services

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The following three divisions of Human Resource Department team up for fulfillment of
the department’s Vision and Mission:

1. Regulations & Compliance

2. Reward Management & HRIS
3. Talent Management

Role and Functions of each division are as follows:

1. Functions of Regulations and Compliance Devision:

Disciplinary & Litigation Unit:

Handles employee discipline, initiates disciplinary actions to enforce organizational

standards and discourage infractions. Union affairs, resolution of conflict, arbitration and
conciliation processes.
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Absenteeism:

In State Bank an employee can take one leave after 6 days of work. Per year 28 leaves
are assigned to the employee’s quota. If employee is involved in absenteeism then
Disciplinary Approach is used by the supervisors to tackle the employee.

Conflict Resolution:

Any conflict whether between the Employees and Customers or Employees and
Employees is resolved by the HR professionals in the following manner:

a) Bi literal:

The first step in resolving the Conflict is through simple table talk between two conflicting
parties. If this step results nothing then the second step is used.

b) Conciliation:

The second step in Conflict handling is Conciliation where another person is taken into
account and that listens to both of the parties and after that he tries by himself so that
all the parties could end up getting the best way possible. If parties again disagrees to
come up on a point then they go on to the next level. The important point here is that
conciliator takes 15 days to resolve the issue.

c) Arbitration:

If bi literal negotiation and conciliation both gets failed then Arbitration is the next step.
Here again both parties chooses a person to moderate the issue. That person is called
Arbitrator. Arbitrator takes about 30 days to solve the issue. If the issue is not resolved
then the issue is taken to the court.

Misuse of Secret Information/Altering the Information:

Misuse of Secret information is one of the highly concerns of the State Bank. Any person
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involved in the misuse of Secret Organization information or Altering the information for
his own negative use is against the policy of the organization and such activity leads
towards the subjected person behind bars.

Equal Employment Opportunities:

State Bank focuses on EEO a lot. Whenever new job opportunities arrive the quota
system is maintained for each and every province of Pakistan. The sub quota consists of
different demographic factors like:

a) Age

b) Gender

c) Different technological backgrounds

But there comes some reverse discrimination when there are some more highly potential
workforce is there but quota is completed.

As far as age is concern, it focuses on the experience of the workforce. State Bank has a
mix of workforce with diversified Ages and experience levels. In genders, females also
have the quota but due to the less female workforce in the market the quota level is very
low for females. But now, in recent years the quota for females has been increased to
almost double. State Bank is a growing organization and requires employees qualified in
different specialized skills like:

a) Information Technology

b) Administration

c) Economics
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d) Management

e) Finance

f) Sociology

g) and a lot more...

So there is always a sub quota is maintained for all above mentioned skills.

Transfer & Posting Unit:

This unit reviews cases of Interdepartmental transfers as per policies and approvals.
Postings of officers in SBP (BSC) other national / international institutions on deputation.
There are two types of transfers in State Bank.

a) Short Term Transfers

b) Permanent Transfers

a) Short Term Transfers:

As State Bank is the growth oriented and talent sharing organization. Therefore it fills the
gaps in the different branches with respect to the men power they like. If in Karachi
branch there are two highly specialized skilled personnels appointed and in Multan there
is also a need of the same highly skilled professional then to fulfill the organization goals
the Administration would temporarily transfer the person to the Multan Branch to fill the
gap in short term.

b) Permanent Transfers:

There are different reasons for the permanent transfers. Usually permanent transfers are
made to Retain the employees those are migrating to another city. Sometimes employees
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wish to move to better location as there are more growth opportunities there. But before
transferring any employee from one location to another the Goals of the Organization are
always in mind and the HR is always consulted in this matter to conduct the need
analysis in subjected branch.

Employee Separation Unit:

This Unit process cases related to resignations by employees from the Bank’s service and
conduct exit interviews of outgoing employees. The case is later on submitted to higher
up for approval. From the HR perspective there are following roles of this unit to perform:

a) Retention Decisions

b) Exit Interviews

a) Retention Decision:

The responsibility of this unit is to retain the highly skilled employees. This unit identifies
the personnels with highly specialized skills and identify it to the Reward Management
Division and Internal Monitoring Unit so that it could take proper actions to retain them.

b) Exit Interviews:

Exit Interviews are like feedbacks to the organization. It the second most important step
that Employee Separation Unit takes is to conduct the Exit Interviews and submit that
interview to the main HR Division so that HR could decide whether to stop that employee
from leaving the job or not. If organization needs that employee then it tells the higher
management or Reward management Division and Internal Monitoring Unit about the
need of the person. Sometimes exit interviews also help to change the policies of the
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organization.

Internal Monitoring Unit:

Carry out audit of cases received from various Divisions of HRD and ensure compliance of
SBP policies and practices. Liaison with internal and external auditors for smooth
execution / completion of audit of HRD also falls under the scope of this unit. Creation of
all the reports and progress of HR Department is the responsibility of this department.

Business Planning & Budgeting Unit (Strategic HR Unit):

This unit also known as Strategic and HR Unit and formulates HR Department’s Annual
Business Plan and Budget that aligns with all HR issues and in greater sense all the
organizational goals. The major responsibility is to generates quarterly analysis of
Business Plan and monthly budget variance report. Keeps track of all the key initiatives
and developments being made in various Divisions of HRD.
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Admin & Co-Ordination Unit (Intra Communication Unit):

This department also know as Intra Communication Unit. Distribution of letters/Messages

etc in and outside the department. Also monitors other day to day administrative
activities of the Department.
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2. Reward Performance Management & HRIS Division:

State Bank uses the Performance Bell Curve in measuring the performance of the
organization. The Bell Curve Method is as follow:

What is Bell Curve System:

Bell curve system of appraisal is a forced ranking system imposed on the employees by
the management. Forced ranking has been defined as a workforce management tool
based on the premise that in order to develop and thrive, a company must identify its
best and worst performers, then nurture the former and rehabilitate and / or discard the
latter learning. Bell curve system rates the entire workforce by comparing the
performance of those engaged in similar activity and ranking them on the basis of their
performance. The entire workforce is segregated as the top performers, medium
performers and the poor performers. The percentile varies with the company policy; it
could be the top 10%, middle 80% and the bottom 10%.

The employees belonging to the higher grade contribute significantly to the enterprise.
They are showered with rewards like restricted stock options, bonuses, etc so as to
motivate them to continue their excellent services to the business entity. The middle
percentile employees are significant in number and their presence ensures uninterrupted
work flow within the organization. They generally have some weakness which is negated
by the training facilities offered by the company. Similarly training is also provided to
enrich their key skills to utilize in a way profitable to the entity. The bottom ranking
consists of those whose performance needs significant improvement and whose is
unsatisfactory. The ranking acts as a warning system that tells the employee where he
stands in relation to his peers. The employees belonging to the lower strata are at times
given the opportunity to improve their efforts or are renounced from the system.
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The bell curve system of appraisal provides the momentum to the employees to push
them forward, aiming higher. This system also states the criteria that are essential to
drive the organization forward. For instance, it is stated that GE has identified as the
measuring standards, namely, high energy level, the ability to energies others towards
the company goals, the edge to take crucial yes/no decisions, and the skill to execute
and deliver the promises on time. These standards help the company to recognize the
key talents who contribute to the overall objective of the organization.

The greatest disadvantage of the system is that it is dependent on the supervisors who
judge the capability and contribution of the employee. The supervisor is to keep a day-
to-day physical record of the favorable and unfavorable tasks performed by the
employee. But as it is a time consuming task, many supervisors record them just before
the submission of the appraisal sheet to the HR leaving ample room for errors and
omissions. This system is also open to the bias and prejudice of the supervisors. Ranking
based on favoritism is a failure.

It is assumed that the bottom performers are replaced every year on account of their
unsatisfactory performance by fresh talents who can add up to the output of the
organization. This is impractical as the replacement is always an expensive affair, and the
high attrition rates can reflect a negative outlook towards the goodwill of the company.
The likelihood of the presence of poor performers amongst the new additions is another
possibility which can adversely affect the success of this system.

A single system of appraisal has high chances of giving out false reports leading to
dispirited workforce. However the bell curve system backed by other measures of
performance appraisal can be an added advantage.
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Bell Curve System in State Bank:

State Bank today use a bell-curve for performance evaluation process. They
reward
a small percentage of top performers, encourage a large majority in the middle to
improve,
and lay-off the bottom performers. Companies believe that such pay-for-
performance
system encourages employees to perform better.

In State Bank every evaluation period – 12 months in the case of State Bank –
employees are categorized into three buckets: top 10% as high performers,
middle 80% as normal or middle performers and bottom 10% as low performers.
State Bank calls this a pay-for-performance system where the high performers get
a big reward (bonus or salary raise), the middle performers get some reward, but
the low performers are often laid off or given a clear signal that their job may be
affected. Many companies that use the bell-curve for performance
evaluation today.

Let us now turn to the dynamics. Figure below shows that when an individual
receives a
low performance rating (evaluated performance), they feel the pressure to
perform better to
maintain higher performance rating. The causal hypotheses in Figure models what
a
manager expects every time the employee performance falls. A corollary to this
expectation is that other forces such as reward or reputation to keep up the
performance of a high-performer once they receive a good evaluation.
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So what is the effect of pressure on performance? Figure 4 shows the relationship

we
derived from our interviews. When there is no pressure to perform, an employee
may slack.
As the pressure mounts, the performance improves. However, there is a limit to
performance. If the pressure becomes unbearable, the performance fall below the
best possible level, as people are stressed and being to cut corners2. This is the
tipping point
beyond which the company should try not to operate.
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The Division Reward Performance and HRIS manages issues related to the grant of
employee recognition awards and up to date incorporation of employee record in Oracle
database. Following units/areas of work are included in this division

Compensation & Benefit Planning Unit:

It is responsible to carry out all activities related to developing best market strategies
regarding compensation and benefits for our employees. As we have already mentioned
that State Bank use Bell Curve System to measure the performance of the individual
employees. So, the employees lying on the top of the curve are provided with maximum
compensation and benefits and bank never want to lose these high performers. So we
can say that the compensation and benefits are awarded to the employees those are on
the top of the bell curve. State Bank provides the following types of Compensation and
benefits to its potential employees.

a) Free Medical Facilities

b) Salary and Maximum Increments (Performance Based)

c) Free Medical Facilities for Employee’s Parents and Family

d) Promotions (Performance Based)

e) Fringe benefits (Performance Based)

f) Transportation and Patrol (Performance Based)

g) Bonuses (Performance Based)

h) Easy Loan facilities

I) annual Increments

Performance Based benefits are provided only to the high performers.

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Ongoing Programs for Reward and Employee's Motivation Level:

Recognizing the importance of employee recognition and reward as a tool to motivate

employee as well as to inculcate a positive, productive and innovative organizational

culture, State Bank of Pakistan has introduced an on-going program for Employee

Recognition and Reward. This program is aimed at fostering a culture of

acknowledgment and appreciation amongst employees for introducing innovative

business practices, showing extra ordinary efforts for achievement of goals and

enhancing Bank’s corporate image. Using various methods of recognition ranging from

simple “Thank you” letters to elaborate celebrations and monetary rewards, we endeavor

to motivate employees, encourage optimum performance and instill professional

commitment and loyalty throughout the Bank.

Formally, the Employee Recognition Policy and Program encompasses four types of

recognition levels, based on the achievement of the individuals/teams. These are:

Level 1 - Individual Contribution Award, an informal way of recognition at individual

level, which includes simple Thank you notes / emails / letters

Level 2 - Departmental Commitment Award, includes a cash award of Rs. 5,000/-, a

recognition certificate & department wide recognition

Level 3 - Organization Competence Award, includes cash award of Rs. 15,000/-, a

recognition certificate & shield and Bank wide recognition

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Level 4 - Excellence Award, includes cash award of Rs. 30,000/-, a recognition

certificate & shield and Bank wide recognition

In order to effectively realize the benefits of this highly beneficial program, all employees

in general and particularly departmental and divisional are encouraged to recognize

employees who through their effort promote organizational values or are high achievers

on an ongoing basis to create an environment of mutual support and respect. By

adopting

the practice of recognizing and recommending each others positive behaviors for reward

we will develop and achieve an organization wide culture of mutual trust and

appreciation which will contribute towards making SBP a better place to work with

highly motivated employees proud of their association with the organization.

HRIS in State Bank (Human Resource Information System):

State Bank has a Human Resource Information System to manage all the employees in
the organization. This Division focuses on Oracle Human Resource Information System
and to solve the issues in smooth implementation and management of HRIS. The
employees Database Unit is responsible for maintaining & updating employee data
and HR Broadcast of various messages/ circulars/ orders etc. for prompt
communication to Bank’s employees. The Service Record & Compliance Unit maintain
and update employees’ personal files, verify employees’ particulars, and ensure
timely confirmation of eligible employees in the Bank’s service. HR Automation unit
works for customization of Oracle HRMS with merging needs of HR processes.
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State Bank HRIS Model:

The HRIS Model clearly shows that in State Bank from workforce planning to benefit

system all the stuff is maintained by the HRMS database. HRMS database also
interacts with the external accounting records and external human resource research
system and Intelligence sub systems to get the external information and then
combines all the internal and external structures to form the complete HRIS Model.
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Internal Structure and Working of HRIS:

Employees Database Unit:

This Unit is responsible for maintaining & updating employee data and HR Broadcast of
various messages/ circulars/ orders etc. for prompt communication to Bank’s employees.
Above there is an example of internal working of the Employee's database unit. That
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clearly holding the record for the Employee's Attendance, Performance, Working,
Transactions, Job Type, Salary, Compensation and all other type of stuff. On top of all, all
the information is linked properly and the data flow is quite clear.

Service Record & Compliance Unit:

This Unit maintains and updates employees’ personal files, verify employees’ particulars,
and ensure timely confirmation of eligible employees in the Bank’s service.

HR Automation Unit:

This Unit focuses on Oracle Human Resource Information System and to solve the issues
in smooth implementation and management of HRIS. HR Automation unit works for
customization of Oracle HRMS with emerging needs of HR processes.

HRIS and Performance Measurement:

In State Bank sub branches the Employees itself do a research on his/her work and try to
identify the new ways of doing his work that is more efficient and less time consuming.
All the new progress made by the employee is then stored into the HRIS and at the end
of the year when the higher authorities checks the Performance of the Employee then on
the basis of the performance of the employee and how innovative he tried to make his
job, the promotions are made.
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3. Talent Management and Training Division

This Division is responsible for fresh induction of SBOTS batches and other professionals
through a rigorous induction process in order to ensure presence of quality professionals.
Following units and areas of work are the part of this division.

The HR Planning, Job Analysis & Design Unit:

This unit is responsible to develop annual manpower plan for SBP, conduct job analysis,
prepare job descriptions, and conduct job evaluation process.

In details This division looks after the department’s Budget & Business Planning process
through its Budget Management & Administration Co-ordination Unit. The Manpower
Planning Unit is also a part of this Division, which is responsible to develop annual
manpower plan for SBP, prepare job descriptions, and conduct job evaluation process.
Further, this division is also responsible for catering to the training needs of HRD
officers in co-ordination with the Training & Development Department.

The Recruitment Planning & Organizational Development Unit:

This unit is responsible for attracting, selecting and recruiting the right people from the
market. The unit firmly works on adopting latest organizational theories & change
management processes to bring in efficiency.

The Recruitment Operations Unit:

This unit deals from placing job advertisements to timely recruitment of competent
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personnel by using modern selection techniques.

The Assessment Centers Unit:

This unit systematically observes & measures employee’s/candidate’s performance for

the purpose of recruitment, selection and promotions.

The Employee Orientation Unit:

This unit facilitates in establishing successful productive working relationships through

effectively orienting new employees to their respective departments/divisions and to their
positions.

The Internal Job Posting Unit:

This unit encourages employees to seek promotion/transfers to fill internal openings and
meet employees’ personal objectives.

Informal Employee Training in Sub Branches:

In Sub Branches of State Bank the most high performer worker also acts as the
Supervisor and also train the other employees in their work.

The Overall Recruitment Process Adopted in State Bank:

State Bank recruitment is responsible for attracting, selecting and recruiting the right
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people from the market.

State Bank of Pakistan is proud of its highly professional, transparent and objective
approach in its recruitment and selection processes. After applying the eligibility criteria,
which depends on the Job grade, a series of selection procedures are applied before
hiring employees. Normally the candidates go through the process of test, group
discussion and interview. The Interview is conducted by a team of internal as well as
external professionals of the related area. Sophisticated recruitment and selection
tools like oracle based data management system; online application and behavioral based
interviewing techniques have been introduced.

1. Advertisement in News Papers for recruitment.

2. Only on Qualification basis.

3. 65% + academic record.

4. High communication skills.

5. Interview, Group discussions,.

6. Medical Test, Selection.

7. Top 60 go to NIBAF for further training (3-6 months).

8. Promotion on basis of abilities or improved Qualification.

9. Performance-based rewards.

The Performance Management Unit:

This unit manages and implements PMS in the Bank, advises the annual merit increase
and facilitates the promotion process accordingly.
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The Reward & Recognition Unit:

This unit in order to foster a culture of acknowledgment and appreciation amongst

employees for introducing innovative business practices, showing extra ordinary efforts
for achievement of goals and enhancing Bank’s corporate image uses various methods of
recognition ranging from simple “Thank you” letters to elaborate celebrations and
monetary rewards.

The Succession Planning Unit:

This unit assesses and audits talents in SBP through provision of potential successors. It
also helps in identifying training & development needs of potential successors.

The Employee Motivation & Retention Unit:

This unit works on conducting motivation surveys and developing market based
employee satisfaction & retention strategies. While talking to different State Bank
Employees we have come to know that the main Motivation forces for the maximum
performance are as follow:

a) Great Corporate Culture

b) EEO (Everyone is Equal No Cruel Politics, Equal Opportunities for all Employees)

c) Totally Performance Based Salary and Rewards no Discrimination

d) Career Plan

e) Glass Ceiling

f) Job Security

g) Very Professional Training

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The Job Evaluation Unit:

This unit is responsible for conduction evaluation of positions and grades to ascertain
their position in the grade structure

Training Facilities to Bankers:

Keeping in view an acute shortage of trained bankers at the time of the

independence, the State Bank introduced "Bank Officers Training Scheme" within
one month of its establishment. On July 2 1948, the Central Board of Directors of
the Bank approved a comprehensive scheme for university graduates especially
with mathematics, economics and commerce backgrounds. For clerks, State Bank
introduced departmental examinations system in 1950 to enhance the capabilities
of the existing staff in the banking industry.

Institute of Bankers Pakistan:

On the initiative of the Bank's Governor, the Institute for Bankers Pakistan (IBP)
was established for conducting examinations in prescribed banking courses for
augmenting the strength of qualified banking staff in the country. The Institute
started functioning from September 17, 1951. The Governor was elected the first
president of the council of the Institute of Bankers Pakistan. The Institute
contributed significantly towards the improvement of operational efficiency of
commercial banking system and providing better facilities for training and
education in banking. All the branches of SBP (BSC) have local offices of the
Institute which organize seminars and short courses on current and important
issues in banking industry of Pakistan. The institute also conducts annual essay
competition on various economic issues and awards prizes to the four best essays.
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Training Department/Division:

State Bank also strengthened its training area. Training courses on central and
commercial banking for both domestic and international participants were
designed. Under the domestic training programme, the in-service training schemes
have always remained on high priority in the training strategy of the Bank. During
1981-82, two Training Units were established - one each at Karachi and Lahore to
cater to the training needs of the Bank's staff of different categories attached to
various offices. The Training Department of the Bank also tries to secure training
placements for Bank officials in different training institutions both at home and
abroad like NIPA, PIDE, IMF, ADB, IDB, World Bank, etc. Recently Training
Department has been merged with Human Resource Department in order to make
human resource managements more efficient at SBP.

NIBAF:

In 1997, with the abolition of Pakistan Banking Council, the State Bank assumed
the charge of National Institute of Banking and Finance (NIBAF), Islamabad. At
NIBAF excellent training facilities are available for participants on commercial
banking, central banking and other areas related with the financial sector. The
NIBAF was converted into an independent subsidiary of SBP in 2003 under a full time
Managing Director. It operates two campuses – one at Islamabad and the
other at Karachi (North Nazimabad). In pursuance of the Bank's objective to
promote technical cooperation among developing countries, international training
courses for the benefit of bankers from Afro-Asian, Latin American,
Commonwealth and Central Asian States are also organized each year at NIBAF.

Training on Islamic Banking:

The NIBAF has also designed a module on Islamic banking and finance in its
 36

training courses designed for State Bank’s officers. Courses of the Institute of
Bankers, Pakistan have been revised to include topics on Islamic economics,
banking and finance.

SEANZA Courses:

The Bank also hosted the 5th and 20th SEANZA Central Banking Courses held at
Karachi during January-March, 1964 and October-November, 1994 respectively.
The former was attended by 23 participants and the latter was attended by 29
participants from 17 countries. Formed in 1956, SEANZA is a group of 17 central
banks in South East Asia Region comprising Australia, Bangladesh, China, India,
Indonesia, Iran, Japan, Korea, Malaysia, Nepal, New Zealand, Pakistan, Papua
New Guinea, Philippines, Singapore, Sri Lanka and Thailand. State Bank of
Pakistan is one of its five founding members.

Scholarships for PhD:

The Bank has also started scholarships for PhD in economics and finance in order
to meet its needs for professionally qualified personnel in these fields. These
scholarships are available to those candidates who are able to get admissions in
top ranked universities of the world. For domestic candidates, one scholarship is
also available for PhD student of Pakistan Institute of Development Economics
(PIDE).

Training for Rural Finance:

Recently the SBP has launched a unique training program for not only bankers
involved in rural and agricultural credit but also farmers and other potential clients
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of rural financial service providers. Such trainings are held at different offices of
SBP (BSC). The objective of such training programs is creating awareness among
the farming community and sharing of knowledge and experience with
stakeholders.
The participants of these training courses include local/ regional nominees,
preferably mobile credit officers/agricultural credit officers from Zarai Taraqiati
Bank Ltd., five big commercial banks, provincial co-operative banks, domestic
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private banks, chambers of agriculture, farmers association / abadgars / growers
association and SBP (BSC) officers of Local Credit Advisory Committees.

Library Services:

In order to cater to information needs of the bankers, researchers, students and

general public, a main library was setup in 1949 at Central Directorate of State
Bank of Pakistan, Karachi. The library has a rich collection of books, technical
reports, Government documents, periodicals and magazines mainly relating to the
subjects of economics, banking, finance, management, commerce, etc. Besides,
sufficient reading material on Islam (in English, Urdu, Arabic, and Persian
languages) and literary works in national and regional languages are also available
in the library. Over the years, the library has grown into one of the biggest and
well-stocked libraries of the country on these subjects. The library facilities have
been so designed that the latest as well as archival materials on the subjects related
to economics, banking, finance and allied subjects are within easy access of the
readers.
The State Bank library has been financed adequately through annual budget as
well as special grants for procurement of books and periodical literature. All out
efforts are made to ensure the availability of standard reading material in the
library. Besides purchases, the library receives publications of central banks,
United Nations, IMF, the World Bank, ADB, etc., and others international
organizations like OPEC, OECD, Islamic Development Bank, Bank for
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International Settlements, etc., local public/private sector banks, financial &

industrial institutions, government’s departments and research organizations on
complimentary or exchange basis.
In addition to a large collection of books, journals and other documents, the library
is also maintaining clipping files on about 180 subjects relating to economics,
banking, commerce, finance, politics, etc., since 1951. Interesting news items,
features, articles, policy statements issued by the Government functionaries,
speeches / addresses of presidents and prime ministers, etc. appearing in the
national dailies are regularly clipped and maintained properly in the relevant files,
which serve as valuable sources of information to those who are interested in
historical research on issues relating to these subjects.
The SBP Library is open to scholars, students and others who wish to avail its
facilities. A Friends of SBP Library Program provides access for outsiders to our
Library resources.

Development of Specialized Financial Institutions:

The State Bank has actively participated in setting up a number of specialized

credit institutions designed to meet the long and medium-term financing needs of
various sectors of the economy. These institutions include Pakistan Industrial
Credit and Investment Corporation of Pakistan (PICIC), Industrial Development
Bank of Pakistan (IDBP), National Development Finance Corporation (NDFC),
Agricultural Development Bank of Pakistan (ADBP), Federal Bank for Cooperatives
(FBC) and House Building Finance Corporation (HBFC). These
institutions were established to provide credit to industrial, agricultural and other
sectors. The Bank also subscribed to the share capital of the People's Finance
Corporation - renamed subsequently as Small Business Finance Corporation
(merged in to the present Small and Medium Enterprise Bank), the Equity
Participation Fund and Banker's Equity. These institutions were designed to
provide finance to small businesses and the major sectors of the economy.
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Summary:

State bank of Pakistan is central bank of Pakistan, which makes it central authority in

banking sector of Pakistan. It has various obligations like formulation of economic

policies, monitoring of banking sector, issuance of notes, providing banking services to
Government as well as other banks and many more. Mission of State bank of
Pakistan is “to provide excellent banking and financial services to stakeholders besides
ensuring implementation of SBP policies in order to command their trust and respect.”

Central Bank was established very soon after independence of Pakistan by father of
Nation, Quaid-e-Azam and was nationalized in 1974, after which scope of its functions
and activities was considerably enlarged. SBP was further divided in to two subsidiaries
named SBP-BSC and NIBAF in 2002. Currently it has 16 field offices working in different
cities of Pakistan and has over 28 departments to look after its wide range of functions.

State Bank of Pakistan is centralized in its organization and management, but recently it
has undergone number of programs to make itself more flexible in its management
approach. SBP is headed by Governor SBP. Managing director and Chief Managers of their
respective field offices are answerable to Governor SBP. Meetings are held on monthly
basis to get views of all employees on different problems and decisions of bank. SBP has
made efforts to make its decision making recently but setting up committees for different
fields on different levels. Human resource and training department is one of major
strength of SBP. These departments hire employees with very systematic procedure.
NIBAF and Training department not only conduct programs for newly hired employees but
also initiate programs to bring flexibility in management practices. I.T department works
for better and easily adoptable communication system in organization apart from
maintaining and securing data. I.T department is also behind strong online banking
system of SBP. Transparent reward recognition program of SBP distinguishes it from
other organizations. This program encourages employees and motivates them by
awarding them in different ways on different levels.

HRM department, I.T department, Islamic banking system, banking services to

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Government could be considered as strengths of SBP. It would not be false to state that
SBP has played a strong role in development of prospering banking sector of Pakistan.
The positive is that they are trying to bring even more improvements in their
organization by introducing different programs and establishing new departments. The
only way for SBP from here is forward!