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A sound and stable financial system has a direct bearing
on economic growth and development of a country. The
State Bank of Pakistan (SBP)-being the regulator of
the banking and financial system-has always endeavored
to ensure a sound and robust financial sector capable
of efficiently catering to the needs of the public and
regulated institutions. To achieve this coveted objective,
SBP has to strike a right balance between its important
goals i.e. to strive and support the development of
a market based financial system and to have an adequate
and enabling regulatory framework. Banking Policy &
Regulations Department (BPRD) of SBP has been assigned
the task for endeavoring to achieve the regulatory objective
through incorporating required improvements in the existing
regulatory environment; besides responding to the need
for adaptation of the international best practices for
our banking industry. The Banking Policy & Regulations
Department ensures a close liaison with the Banking
Surveillance, Off-site Supervision & Enforcement,
Banking Inspection (On-site), SME & Microfinance
Departments and all other departments of SBP to ensure
that policies formulated by it are being implemented
in letter and spirit.
The
support given by SBP in the recent years to the banking
sector with regard to innovation and diversification
in its activities, has also necessitated, a more composite
and dynamic role of the Banking Policy & Regulations
Department. The department endeavors to put in place
a regulatory environment that does not make it difficult
for the industry to innovate and diversify; and at the
same time to ensure that their activities do not affect
the soundness and stability of the banking system. The
department has also been entrusted with the responsibilities
to develop different schemes that are part of the developmental
role of the State Bank of Pakistan.
Being the regulatory arm of SBP, the department has
developed a new set of Prudential Regulations (PRs)
for various sectors such as Corporate, SMEs, and Consumer
Financing in consultation with Pakistan Banks Association
(PBA) and other stakeholders. To facilitate the banking
industry a more liberal branch licensing policy is adopted.
In order to enforce the stringent standards for the
corporate governance envisaged by SBP the department
implements the “Fit and Proper Test” criteria
for appointment of key executives in the banks. The
department has been managing various schemes started
by SBP along with Corporate Industrial Restructuring
Corporation (CIRC) and Committee for Revival of Sick
Industrial Units (CRSIU) for handling the problems of
non-performing loans (NPLs) in the banking sector.
To
fulfill the above responsibilities the department has
been divided into different divisions on the basis of
relevant work streams. Each Division is sub-divided
into different units. A brief description of each division
is given hereunder;
Banking
Regulation Division
The division is responsible for continuous reviewing
and proposing changes/amendments in the banking laws
and Prudential Regulations for the development of an
effective legal and regulatory framework; to promote
prudent, sound banking practices to ensure healthy financial
sector in Pakistan. The division is also responsible
for capacity building of the personnel of the department
through arrangement of training courses, seminars, and
conferences both at foreign and local levels. In addition
to this, it is also facilitating in the implementation
of Performance Management System (PMS) in the Department
Licensing
and Corporate Governance Division
The division looks after the policy issues regarding
licensing of new banks, branch licensing, authorization
of booths, installation of Automated Teller Machine
(ATM), evaluating schemes of amalgamation/merger of
banks/DFIs/NBFCs, privatization of Public Sector Banks/DFIs,
preparation and management of various Schemes for addressing
the problems of Non Performing Loans (NPLs) and respond
to any other issue regarding banking practices. This
division is also responsible for the accessing the “Fit
& Proper Test” for the President/Chief Executive
and Board of Directors of the banks/DFIs/MFIs.
Support
and Liaising Division
The main responsibilities entrusted to this division
are to have a close liaison with foreign central banks,
International Financial Institution and trade bodies
on issues of bilateral and multilateral interests, deal
with the cases of unclaimed deposits, liaising with
National Accountability Bureau (NAB), to recommend names
of loan defaulters on requests of banks/DFIs for placement
on Exit Control List (ECL) and respond to the queries
of the government and legislative bodies. The division
is also handling the issue of introduction of Deposit
Insurance Scheme (DIS) in the country. Other responsibilities
of the division include monitoring of funds flow of
ADB funded Program of Technical Assistance for Banking
Sector; and preparation, consolidation and monitoring
of the BPRD Annual Business Plan. The unit of internal
audit is also working under this division.
Complaints
Redressal & Services Division
The division works to have the amicable settlement of
various public grievances against the commercial banks
and also performing the ex-officio functions of Deputy
Custodian of the enemy property (Indian Banks). Moreover,
the function of the division is to provide support services
to BPRD in achieving its goals by providing logistic
support in time and coordinating the administrative
matters of the staff/officer in an efficient manner.
All the employees of the department while performing
their duties in a professional manner are expected and
encouraged to exhibit the core values (Trust, Teamwork,
Problem solving approach, Commitment to excellence,
Courage, Openness) of the Organization. |
