SBP

Copyright © 2010 Pearson Education, Inc.

State Bank of Pakistan

Submitted to: Madam Erum Shaikh

Copyright © 2010 Pearson Education, Inc. Slide 1-2

Introduction to SBP:

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.

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 Board comprises of all the members from the Central Board of SBP and the Managing Director of SBP-BSC.

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VISION statement OF SBP

“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”

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MISSION statement OF SBP

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“To provide excellent banking and financial services to stakeholders beside sensuring implementation of SBP policies in order to command their trust and respect”

Strategic Objectives of SBP

1. Maintaining Price Stability with Growth 2. Broadening Access to Financial Sector 3. Ensuring Soundness of Financial Sector 4. Exchange Rate and Reserve Management 5. Strengthening Payment Systems

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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. In SBP have more than 27 departments, some major departments is given bellow:Human Resource Department

Monetary Policy Department

Financial Market Strategy & Conduct Department

Economic Analysis Department

Research Department

Micro Finance Department

SME Finance Department

Training and Development DepartmentSlide 2-7

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 & HRIS3. Talent Management

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Functions of Regulations and Compliance Devision:Disciplinary & Litigation UnitHandles employee discipline, initiates disciplinary actions to enforce organizational standards and discourage infractions. Union affairs, resolution of conflict, arbitration and conciliation processes.

AbsenteeismIn 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:

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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.

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Misuse of Secret Information/Altering the Information Misuse of Secret information is one of the highly concerns of the

State Bank. Any person 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.

Age Gender Different technological backgrounds

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State Bank is a growing organization and requires employees qualified indifferent specialized skills like: Information TechnologyAdministrationEconomicsManagement Finance Sociologyand a lot more...So there is always a sub quota is maintained for all above mentioned skills.

Transfer & Posting UnitThis 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.Short Term Transfers:Permanent Transfers:

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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) b) Exit Interviews 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. Exit Interviews: Exit Interviews are like feedbacks to the organization. It the second

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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.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

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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 initiative sand developments being made in various Divisions of HRD.

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.

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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.

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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.

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a) Free Medical Facilitiesb) Salary and Maximum Increments (Performance Based)c) Free Medical Facilities for Employee’s Parents and Familyd) Promotions (Performance Based)e) Fringe benefits (Performance Based)f) Transportation and Patrol (Performance Based)g) Bonuses (Performance Based)h) Easy Loan facilitiesi) annual Increments

Performance Based benefits are provided only to the high performers

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HRIS in State Bank (Human Resource Information System):

State Bank has a Human Resource Information System to manage all the employees in the organization.

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.

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.

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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 descriptionsconduct job analysis, prepare job descriptions and conduct job evaluation process.

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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 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.

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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.

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The Overall Recruitment Process Adopted in State Bank:State Bank recruitment is responsible for attracting, selecting and recruiting the right people from the market. 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 base d 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.

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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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FINANCE DEPARTMENT OF SBP: Maintenance of books of accounts and preparation of financial

statements of the Bank in accordance with the IAS, as adopted by the Bank.

Coordination and facilitation for budgeting function in the Bank and periodic reporting to the management and to the Board of Directors.

Maintenance of foreign currency accounts/ investments and execution of International payments and receipts.

Maintenance of accounts relating to International Organizations and Donor Agencies like IMF, IBRD, ADB, Asian Clearing Union (ACU) etc.

Currency issuance and its overall management.

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SWOT Analysis:STRENGTH: Strong internal control for transactions therefore no fraud has

ever been done The structure of verification, authorization, checking and counter

checking of transactions is very sophisticated, reliable and strong. This is the major reason why fraud and false payment cases are rare in SBP-BSC.

Job security, good salary packages and benefits for employees attract and retain talent.

Employees of SBP-BSC enjoy good salary packages and benefits. For example interest free loans are given for building house and buying car etc. employees feel secure because of the permanent nature of job.

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WEAKNESS: Latest procedures and best practices are not adopted:Just like computing technology, the procedures are not updated and

best practices of the similar organizations are not adopted, which is causing stagnation. SBP-BSC has to work with other institutes and conduct regular research to develop and modify their procedures.

Staff is not well trained in IT:SBP-BSC employees in general and imputers should be trained at

least for improving their typing speed. It will speed up the payment process and entry system.

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OPPORTUNITIES: Investment in IT and latest technology: There is a great opportunity for SBP-BSC to invest in latest

technology. By replacing the present system of physical movement of cheque for clearance with image based clearance system like Cheque Truncation System (CTS) SBP can enable commercial banks to offer new products and services. It could be a source of earning for SBP and would also help achieve its goal of providing a facilitating financial market.

THREATS:Political instability and pressure can harm the operations of SBP:Frequently changing governments and their policies harm the

functionality and consistency of SBP-BSC policies.

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Excessive government borrowings:

Excessive borrowings of the present government is making difficult for SBP to maintain foreign exchange reserves.

Circulation of fake currency:A huge amount of fake currency is floating in the market which is causing inflation in the economy and is devaluing rupee. Fake money makers have improved the quality of their fake notes and it is hard for general public to distinguish them from original currency notes.

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From above 75 % employess are strongly satissfied with work condition of SBP and 25% just satisfied

from sample of 4 employees


From above 100 % employees are strongly satissfied communication within SBP

from sample of 4 employees


SBP

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