Mission Statement
Our Mission is “to promote soundness and stability
of the Banking System through proactive off-site supervision
and prompt enforcement actions”.
Vision
Statement
Our Vision is “to transform Off-Site Supervision &
Enforcement Department into a highly professional and dynamic
department fully equipped to proactively supervise banks and
other financial institutions under purview of the SBP and initiate
prompt enforcement actions.
About
Us
Off-Site
Supervision & Enforcement Department (OSED) is one of the
newly created departments emerging in the wake of re-organization
of former Banking Supervision Department under recent SBP restructuring.
OSED is responsible for off-site supervision of the financial
institutions coming under regulatory purview of the State Bank
of Pakistan (SBP). The department also ensures effective enforcement
of regulatory and supervisory policies, monitors risk profiles,
evaluates operating performance of individual banks/DFIs and
takes necessary enforcement actions against institutions for
their non-compliance (with laws of the land and regulations
put in place by the SBP) as identified by, the inspection teams
of BID during their onsite examination, and/or by the supervisors
of this department based on submitted returns, interaction with
financial institutions and market information.
Currently,
over 50 financial institutions are supervised by the State Bank
of Pakistan. These include banks, Development Finance Institutions
(DFIs), and Microfinance Banks/institutions. Banks operating
in the country include locally incorporated public and private
sector banks and branches of foreign banks. The nature of business
is becoming diversified overtime.
To
effectively discharge its functions, the department has prescribed
returns of varied frequencies for regular submission by the
financial institutions. Based on these returns, the department
monitors risk profiles of individual institutions, evaluates
their operating performance under CAELS/IRAF frameworks, and
checks their compliance with the prescribed parameters (i.e.
ratios, levels, etc) on quarterly basis. The CAELS is an off-site
supervisory framework used for assigning banks, on quarterly
basis, a composite rating on a scale of 1 (best) to 5 (worst)
comprising of Capital (C), Asset Quality (A), Earning (E), Liquidity
(L) and sensitivity to other Risk (S). Besides, the department
has instituted an all-embracing technology driven Institutional
Risk Assessment Framework (IRAF) for continuous monitoring of
banks by integrating off-site assessment, on-site assessment,
self-assessment by banks’ board of directors/ management,
assessment by the external auditors and rating agencies and
market information.
The
Department also monitors the Cash Reserve Requirement (CRR),
and Statutory Liquidity Requirement (SLR) of the banks and DFIs
on weekly basis and takes corrective measures and imposes penalty.
Moreover,
supervising officers at OSED examine the violations of institutions
under its purview as contained in the inspection reports prepared
by the BID inspection teams, and take necessary enforcement
actions against concerned financial institutions including imposition
of penalties, enforcement letters, signing MOUs, advising immediate
compliance and submission of time bound action plans. Besides,
the supervising officers keep close watch on the banks’
operating performance in the interim period between onsite examinations
for any violation and takeover the issues/ violations with the
concerned institutions. Further, a report, on the condition
of banks inspected in a particular quarter, is prepared on quarterly
basis and submitted to Ministry of Finance. In addition, the
department facilitates other departments of SBP as and when
required through provision of bank-related or consolidated information
and coordinate on Reported Chart of Account (RCOA) with Data
ware House project team for automation and rationalization of
returns submitted to SBP.
To
achieve operational efficiency in the discharge of entrusted
functions, the Department has been structured into divisions
and units.
