Circulars/Notifications - Banking Policy Department  
 BPD Circular No.11
April 5, 2003  

The CEOs/Presidents
All Banks/DFIs

Dear Sir/Madam,

Assessing the Fitness and Propriety of Key Executives

 


As you are aware, the State Bank of Pakistan, for promoting good corporate governance in the financial sector, has already issued “Fit & Proper Test”(FPT) for the directors and chief executive officers of banks/DFIs. To further enlarge the scope of good governance it has now been decided that banks/DFIs shall follow the guidelines contained in the “Fit and Proper Test’ at Annexure I for appointment of key executives particularly those having the following functional responsibilities:

 

a)                  Chief Financial Officer/Head of Finance/Head of Accounts

b)                  Head of Internal Audit

c)                  Country Treasurer

d)                  Head of Credit/ Risk Management

e)                  Head of Operations

f)                   Head of Compliance

g)                  Head of Human Resource

           

2.                   It may please be noted that no prior approval is required from State Bank for aforementioned appointments and each bank/DFI shall itself be responsible to ensure that FPT guidelines have been followed in letter and spirit. The banks/DFIs shall report only brief information of such appointments, as and when made, as per format given at Annexure II to the Director Banking Policy Department for information and record within 7 days from the date of joining of these executives.

 

3.                   In case it is found at subsequent stage/during the course of inspection that guidelines of FPT have not been followed or the incumbent is not a fit and proper person, strict punitive action will be taken under the relevant provisions of Banking Companies Ordinance, in addition to directing the banks/DFIs to dispense with the services of concerned officer if recruited afresh; and in case of existing employee, the same to be transferred from the post immediately.

 

4.         The banks/DFIs not meeting the Fit and Proper Test in respect of their existing key executives may regularize the position within 180 days from the date of issuance of this circular. A compliance report may please be furnished in this regard by October 15, 2003 positively. In the meantime, the particulars of incumbents in the above mentioned positions may please be furnished on the enclosed Annexure II within 30 days from the date of issue of this circular.

 

5.         Please acknowledge receipt.

Encl: As above
Attachment Anex-1
Attachment Anex-2


Yours faithfully,
(Muhammad Kamran Shehzad)
Director

BPD Circulars/ Circular Letters issued in 2002
       
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