One of the fundamental responsibilities of the State Bank is regulation and supervision of the financial system to ensure its soundness and stability as well as to protect the interests of depositors. The rapid advancement in information technology, together with growing complexities of modern banking operations, has made the supervisory role more challenging. The institutional complexity is increasing, technical sophistication is improving and technical base of banking activities is expanding. All this requires the State Bank to endeavor to keep pace with the fast-changing financial landscape of the country. As a response to these challenges and considering the international best practices, SBP has adopted a Risk Based Supervisory approach. The Banking Supervision Department-1, Banking Supervision Department-2 and Banking Supervision Department-3 conduct supervisory activities through supervisory teams, which encompass off-site supervision, on-site assessments and enforcement actions. The intensity of supervisory activities commensurate with the risk profile of supervised institutions.