Functions Of Human Resource Department Of State Bank Of Pakistan

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Introduction to SBP:

Introduction: 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

2 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 exchange. SBPBSC Board comprises of all the members from the Central Board of SBP and the Managing Director of SBP-BSC. VISION statement OF SBP - BANKING SERVICE CORPORATION “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” MISSION statement OF SBP – BANKING SERVICE CORPORATION “To provide excellent banking and financial services to stakeholders besides ensuring implementation of SBP policies in order to command their trust and respect”

NIBAF – National Institute of Banking & Finance: NIBAF was established by PBC and was taken over by SBP in 1997. NIBAF is the training arm and is responsible for design, delivery, development and evaluation of trainings. Vision of NIBAF is “to be apex institute of Human research development in field of Banking & Finance”

FUNCTIONS of STATE Bank OF PAKISTAN:

3 Like a Central Bank in any developing country, State Bank of Pakistan performs both the traditional and developmental functions to achieve macro-economic goals.

TRADITIONAL Functions:

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The primary functions including issue of notes, regulation and supervision of the financial

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system, bankers’ bank, lender of the last resort, banker to Government, and conduct of

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monetary policy.

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The secondary functions including the agency functions like management of public debt,

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management of foreign exchange, etc.

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Other functions like advising the government on policy matters and maintaining close

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relationships with international financial institutions.

Promotional Functions: ●

Development of financial framework.

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Provision of training facilities to bankers.

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Provision of credit to priority sectors.

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Islamization of the banking system.

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. For better management and efficient as well as effective execution of these actions in different fields, State Bank of Pakistan has formed number of departments. Each department is exclusively responsible for taking care of all activities that belong to its department’s scope. A list of more functional departments of SBP is given below: 1) Agricultural Credit Department 2) Banking Inspection (on-site) Department 3) Strategic and Corporate Planning 4) Human Resource Department 5) Banking Policy & Regulation Department 6) Banking Surveillance Department

5 7) Business Support Services Department 8) Domestic Market & Management Department 9) Economic Analysis Department 10) Exchange Policy Department 11) External Relations Department 12) Financial Market Strategy & Conduct Department 13) Financial Stability Department 14) Information System & Technology Department 15) Housing Finance Department 16) Internal Audit\ Compliance Department 17) International Market and Investments Department 18) Islamic Banking Department 19) Monetary Policy Department 20) NIBAF Karachi & Islamabad 21) Off-site Supervision & Enforcement Department 22) Payment System Department 23) Research Department 24) Risk Management and Compliance Department 25) Micro Finance Department 26) SME Finance Department 27) Training and Development Department During our visit to field office of SBP – BSC in Multan, our focus was on gathering information in reference to Human Resource Department, Training and Development Department, Information systems Department apart from understanding organizational and Management structure that is being practiced in State Bank of PAKISTAN.

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Organizational Structure of SBP:

Organizational Structure:

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Chain of Command:

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ORGANIZATIONAL STRUCTURE in SBP – BSC, Multan: In Field office of SBP – BSC, Multan Branch, there is one C.M (Chief Manager) (OG5 grade), who controls the whole setup in Multan Branch and directly answerable to Managing director and Governor of SBP. There are four D.C.M’s (Deputy Chief Managers) (OG4) under C.M and they are responsible for their respective department in SBP – BSC, Multan.

- CHIEF Manager (1) - DEPUTY Chief Manager (5, including C.M) –

Assistant Chief Manager FOR their respective divisions (12, including 4 D.C.M)

Names of 8 divisions in SBP – BSC, Multan are mentioned in below: 1. Administration Division (Admin Department) 2. Audit Division (Admin Department) 3. Foreign Exchange Operations Division (Admin Department) 4. Banking Division (Banking Department)

9 5. Issue and Treasury Division (Banking Department) 6. Prize Bonds Division (Banking Department) 7. Maintenance Unit (Engg.) 8. Adjudication Court (FEAD)

Moving Towards the Responsiveness: For any organization to work successfully there is the need for efficiency and responsiveness. But the important thing is that there are huge trade offs between Responsiveness and Efficiency. If any organization goes to become more efficient then he loses the responsiveness. Similarly, if the organization goes to achieve more responsiveness then he loses the efficiency. There there is a need of proper and perfect mix for both of them to achieve the organization goals. So that organization could be run successfully. As, far as SBP is concern, SBP is committed to high standards of Corporate Governance and Management. In recent years major initiatives have been taken to improve corporate governance and management structure at SBP. The Central Board reconstituted its committees and to make them more responsive to changing needs of SBP. These Committees comprise of non-executive directors and representatives from the management in order to have a comprehensive review and analysis of various proposals before they are considered by the Board. The composition of NIBAF Board-a subsidiary of SBP on training- was changed in order to provide an opportunity to thoroughly deliberate upon policy issues and quality of training programs at NIBAF by appointing prominent economists and individuals from academia. As being a responsive organization, now State Bank has the following focuses: 1. Improved R & D Dept. 2. More focus on HR Strategic Role

10 3. Maximum Attention to the Workforce Development 4. More Support from IT to maximize the Efficiency 5. Flexible Payment System Department

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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

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Serving as a strategic partner to the line Departments

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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 & HRIS 3. Talent Management

Role and Functions of each division are as follows:

1. Functions of Regulations and Compliance Devision:

Disciplinary & Litigation Unit: Handles employee discipline, initiates disciplinary actions to enforce organizational standards and discourage infractions. Union affairs, resolution of conflict, arbitration and conciliation processes.

13 Absenteeism: In 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:

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.

Misuse of Secret Information/Altering the Information: Misuse of Secret information is one of the highly concerns of the State Bank. Any person

14 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:

a) Age b) Gender c) Different technological backgrounds

But there comes some reverse discrimination when there are some more highly potential workforce is there but quota is completed.

As far as age is concern, it focuses on the experience of the workforce. State Bank has a mix of workforce with diversified Ages and experience levels. In genders, females also have the quota but due to the less female workforce in the market the quota level is very low for females. But now, in recent years the quota for females has been increased to almost double. State Bank is a growing organization and requires employees qualified in different specialized skills like:

a) Information Technology b) Administration c) Economics

15 d) Management e) Finance f) Sociology g) and a lot more...

So there is always a sub quota is maintained for all above mentioned skills.

Transfer & Posting Unit: This 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.

a) Short Term Transfers b) Permanent Transfers

a) Short Term Transfers: As State Bank is the growth oriented and talent sharing organization. Therefore it fills the gaps in the different branches with respect to the men power they like. If in Karachi branch there are two highly specialized skilled personnels appointed and in Multan there is also a need of the same highly skilled professional then to fulfill the organization goals the Administration would temporarily transfer the person to the Multan Branch to fill the gap in short term.

b) Permanent Transfers: There are different reasons for the permanent transfers. Usually permanent transfers are made to Retain the employees those are migrating to another city. Sometimes employees

16 wish to move to better location as there are more growth opportunities there. But before transferring any employee from one location to another the Goals of the Organization are always in mind and the HR is always consulted in this matter to conduct the need analysis in subjected branch.

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) Exit Interviews

a) 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.

b) Exit Interviews: Exit Interviews are like feedbacks to the organization. It the second 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. Sometimes exit interviews also help to change the policies of the

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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.

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 initiatives and developments being made in various Divisions of HRD.

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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. The percentile varies with the company policy; it could be the top 10%, middle 80% and the bottom 10%.

The employees belonging to the higher grade contribute significantly to the enterprise. They are showered with rewards like restricted stock options, bonuses, etc so as to motivate them to continue their excellent services to the business entity. The middle percentile employees are significant in number and their presence ensures uninterrupted work flow within the organization. They generally have some weakness which is negated by the training facilities offered by the company. Similarly training is also provided to enrich their key skills to utilize in a way profitable to the entity. The bottom ranking consists of those whose performance needs significant improvement and whose is unsatisfactory. The ranking acts as a warning system that tells the employee where he stands in relation to his peers. The employees belonging to the lower strata are at times given the opportunity to improve their efforts or are renounced from the system.

20 The bell curve system of appraisal provides the momentum to the employees to push them forward, aiming higher. This system also states the criteria that are essential to drive the organization forward. For instance, it is stated that GE has identified as the measuring standards, namely, high energy level, the ability to energies others towards the company goals, the edge to take crucial yes/no decisions, and the skill to execute and deliver the promises on time. These standards help the company to recognize the key talents who contribute to the overall objective of the organization.

The greatest disadvantage of the system is that it is dependent on the supervisors who judge the capability and contribution of the employee. The supervisor is to keep a dayto-day physical record of the favorable and unfavorable tasks performed by the employee. But as it is a time consuming task, many supervisors record them just before the submission of the appraisal sheet to the HR leaving ample room for errors and omissions. This system is also open to the bias and prejudice of the supervisors. Ranking based on favoritism is a failure.

It is assumed that the bottom performers are replaced every year on account of their unsatisfactory performance by fresh talents who can add up to the output of the organization. This is impractical as the replacement is always an expensive affair, and the high attrition rates can reflect a negative outlook towards the goodwill of the company. The likelihood of the presence of poor performers amongst the new additions is another possibility which can adversely affect the success of this system.

A single system of appraisal has high chances of giving out false reports leading to dispirited workforce. However the bell curve system backed by other measures of performance appraisal can be an added advantage.

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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-forperformance system encourages employees to perform better.

In State Bank every evaluation period – 12 months in the case of State Bank – employees are categorized into three buckets: top 10% as high performers, middle 80% as normal or middle performers and bottom 10% as low performers. State Bank calls this a pay-for-performance system where the high performers get a big reward (bonus or salary raise), the middle performers get some reward, but the low performers are often laid off or given a clear signal that their job may be affected. Many companies that use the bell-curve for performance evaluation today. Let us now turn to the dynamics. Figure below shows that when an individual receives a low performance rating (evaluated performance), they feel the pressure to perform better to maintain higher performance rating. The causal hypotheses in Figure models what a manager expects every time the employee performance falls. A corollary to this expectation is that other forces such as reward or reputation to keep up the performance of a high-performer once they receive a good evaluation.

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So what is the effect of pressure on performance? Figure 4 shows the relationship we derived from our interviews. When there is no pressure to perform, an employee may slack. As the pressure mounts, the performance improves. However, there is a limit to performance. If the pressure becomes unbearable, the performance fall below the best possible level, as people are stressed and being to cut corners2. This is the tipping point beyond which the company should try not to operate.

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The Division Reward Performance and HRIS manages issues related to the grant of employee recognition awards and up to date incorporation of employee record in Oracle database. Following units/areas of work are included in this division

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. So, the employees lying on the top of the curve are provided with maximum compensation and benefits and bank never want to lose these high performers. So we can say that the compensation and benefits are awarded to the employees those are on the top of the bell curve. State Bank provides the following types of Compensation and benefits to its potential employees.

a) Free Medical Facilities b) Salary and Maximum Increments (Performance Based) c) Free Medical Facilities for Employee’s Parents and Family d) Promotions (Performance Based) e) Fringe benefits (Performance Based) f) Transportation and Patrol (Performance Based) g) Bonuses (Performance Based) h) Easy Loan facilities I) annual Increments

Performance Based benefits are provided only to the high performers.

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Ongoing Programs for Reward and Employee's Motivation Level: Recognizing the importance of employee recognition and reward as a tool to motivate employee as well as to inculcate a positive, productive and innovative organizational culture, State Bank of Pakistan has introduced an on-going program for Employee Recognition and Reward. This program is aimed at fostering a culture of acknowledgment and appreciation amongst employees for introducing innovative business practices, showing extra ordinary efforts for achievement of goals and enhancing Bank’s corporate image. Using various methods of recognition ranging from simple “Thank you” letters to elaborate celebrations and monetary rewards, we endeavor to motivate employees, encourage optimum performance and instill professional commitment and loyalty throughout the Bank.

Formally, the Employee Recognition Policy and Program encompasses four types of recognition levels, based on the achievement of the individuals/teams. These are:

Level 1 - Individual Contribution Award, an informal way of recognition at individual level, which includes simple Thank you notes / emails / letters

Level 2 - Departmental Commitment Award, includes a cash award of Rs. 5,000/-, a recognition certificate & department wide recognition

Level 3 - Organization Competence Award, includes cash award of Rs. 15,000/-, a recognition certificate & shield and Bank wide recognition

25 Level 4 - Excellence Award, includes cash award of Rs. 30,000/-, a recognition certificate & shield and Bank wide recognition

In order to effectively realize the benefits of this highly beneficial program, all employees in general and particularly departmental and divisional are encouraged to recognize employees who through their effort promote organizational values or are high achievers on an ongoing basis to create an environment of mutual support and respect. By adopting the practice of recognizing and recommending each others positive behaviors for reward we will develop and achieve an organization wide culture of mutual trust and appreciation which will contribute towards making SBP a better place to work with highly motivated employees proud of their association with the organization. .

HRIS in State Bank (Human Resource Information System): State Bank has a Human Resource Information System to manage all the employees in the organization. This Division focuses on 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. The Service Record & Compliance Unit maintain and update employees’ personal files, verify employees’ particulars, and ensure timely confirmation of eligible employees in the Bank’s service. HR Automation unit works for customization of Oracle HRMS with merging needs of HR processes.

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27 State Bank HRIS Model: The HRIS Model clearly shows that in State Bank from workforce planning to benefit

system all the stuff is maintained by the HRMS database. HRMS database also interacts with the external accounting records and external human resource research system and Intelligence sub systems to get the external information and then combines all the internal and external structures to form the complete HRIS Model.

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Internal Structure and Working of HRIS:

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. Above there is an example of internal working of the Employee's database unit. That

29 clearly holding the record for the Employee's Attendance, Performance, Working, Transactions, Job Type, Salary, Compensation and all other type of stuff. On top of all, all the information is linked properly and the data flow is quite clear.

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 descriptions, and conduct job evaluation process.

In details This division looks after the department’s Budget & Business Planning process through its Budget Management & Administration Co-ordination Unit. The Manpower Planning Unit is also a part of this Division, which is responsible to develop annual manpower plan for SBP, prepare job descriptions, and conduct job evaluation process.

Further, this division is also responsible for catering to the training needs of HRD officers in co-ordination with the Training & Development Department.

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

31 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.

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.

The Overall Recruitment Process Adopted in State Bank: State Bank recruitment is responsible for attracting, selecting and recruiting the right

32 people from the market. State Bank of Pakistan is proud of its highly professional, transparent and objective approach in its recruitment and selection processes. After applying the eligibility criteria, which depends on the Job grade, a series of selection procedures are applied before

hiring employees. 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 based 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. 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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The Reward & Recognition Unit: This unit in order to foster a culture of acknowledgment and appreciation amongst employees for introducing innovative business practices, showing extra ordinary efforts for achievement of goals and enhancing Bank’s corporate image uses various methods of recognition ranging from simple “Thank you” letters to elaborate celebrations and monetary rewards.

The Succession Planning Unit: This unit assesses and audits talents in SBP through provision of potential successors. It also helps in identifying training & development needs of potential successors.

The Employee Motivation & Retention Unit: This unit works on conducting motivation surveys and developing market based employee satisfaction & retention strategies. While talking to different State Bank Employees we have come to know that the main Motivation forces for the maximum performance are as follow:

a) Great Corporate Culture b) EEO (Everyone is Equal No Cruel Politics, Equal Opportunities for all Employees) c) Totally Performance Based Salary and Rewards no Discrimination d) Career Plan e) Glass Ceiling f) Job Security g) Very Professional Training

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The Job Evaluation Unit: This unit is responsible for conduction evaluation of positions and grades to ascertain their position in the grade structure

Training Facilities to Bankers: Keeping in view an acute shortage of trained bankers at the time of the independence, the State Bank introduced "Bank Officers Training Scheme" within one month of its establishment. On July 2 1948, the Central Board of Directors of the Bank approved a comprehensive scheme for university graduates especially with mathematics, economics and commerce backgrounds. For clerks, State Bank introduced departmental examinations system in 1950 to enhance the capabilities of the existing staff in the banking industry.

Institute of Bankers Pakistan: On the initiative of the Bank's Governor, the Institute for Bankers Pakistan (IBP) was established for conducting examinations in prescribed banking courses for augmenting the strength of qualified banking staff in the country. The Institute started functioning from September 17, 1951. The Governor was elected the first president of the council of the Institute of Bankers Pakistan. The Institute contributed significantly towards the improvement of operational efficiency of commercial banking system and providing better facilities for training and education in banking. All the branches of SBP (BSC) have local offices of the Institute which organize seminars and short courses on current and important issues in banking industry of Pakistan. The institute also conducts annual essay competition on various economic issues and awards prizes to the four best essays.

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Training Department/Division: State Bank also strengthened its training area. Training courses on central and commercial banking for both domestic and international participants were designed. Under the domestic training programme, the in-service training schemes have always remained on high priority in the training strategy of the Bank. During 1981-82, two Training Units were established - one each at Karachi and Lahore to cater to the training needs of the Bank's staff of different categories attached to various offices. The Training Department of the Bank also tries to secure training placements for Bank officials in different training institutions both at home and abroad like NIPA, PIDE, IMF, ADB, IDB, World Bank, etc. Recently Training Department has been merged with Human Resource Department in order to make human resource managements more efficient at SBP.

NIBAF: In 1997, with the abolition of Pakistan Banking Council, the State Bank assumed the charge of National Institute of Banking and Finance (NIBAF), Islamabad. At NIBAF excellent training facilities are available for participants on commercial banking, central banking and other areas related with the financial sector. The NIBAF was converted into an independent subsidiary of SBP in 2003 under a full time Managing Director. It operates two campuses – one at Islamabad and the other at Karachi (North Nazimabad). In pursuance of the Bank's objective to promote technical cooperation among developing countries, international training courses for the benefit of bankers from Afro-Asian, Latin American, Commonwealth and Central Asian States are also organized each year at NIBAF.

Training on Islamic Banking: The NIBAF has also designed a module on Islamic banking and finance in its

36 training courses designed for State Bank’s officers. Courses of the Institute of Bankers, Pakistan have been revised to include topics on Islamic economics, banking and finance.

SEANZA Courses: The Bank also hosted the 5th and 20th SEANZA Central Banking Courses held at Karachi during January-March, 1964 and October-November, 1994 respectively. The former was attended by 23 participants and the latter was attended by 29 participants from 17 countries. Formed in 1956, SEANZA is a group of 17 central banks in South East Asia Region comprising Australia, Bangladesh, China, India, Indonesia, Iran, Japan, Korea, Malaysia, Nepal, New Zealand, Pakistan, Papua New Guinea, Philippines, Singapore, Sri Lanka and Thailand. State Bank of Pakistan is one of its five founding members.

Scholarships for PhD: The Bank has also started scholarships for PhD in economics and finance in order to meet its needs for professionally qualified personnel in these fields. These scholarships are available to those candidates who are able to get admissions in top ranked universities of the world. For domestic candidates, one scholarship is also available for PhD student of Pakistan Institute of Development Economics (PIDE).

Training for Rural Finance: Recently the SBP has launched a unique training program for not only bankers involved in rural and agricultural credit but also farmers and other potential clients

37 of rural financial service providers. Such trainings are held at different offices of SBP (BSC). The objective of such training programs is creating awareness among the farming community and sharing of knowledge and experience with stakeholders. The participants of these training courses include local/ regional nominees, preferably mobile credit officers/agricultural credit officers from Zarai Taraqiati Bank Ltd., five big commercial banks, provincial co-operative banks, domestic 26 private banks, chambers of agriculture, farmers association / abadgars / growers association and SBP (BSC) officers of Local Credit Advisory Committees.

Library Services: In order to cater to information needs of the bankers, researchers, students and general public, a main library was setup in 1949 at Central Directorate of State Bank of Pakistan, Karachi. The library has a rich collection of books, technical reports, Government documents, periodicals and magazines mainly relating to the subjects of economics, banking, finance, management, commerce, etc. Besides, sufficient reading material on Islam (in English, Urdu, Arabic, and Persian languages) and literary works in national and regional languages are also available in the library. Over the years, the library has grown into one of the biggest and well-stocked libraries of the country on these subjects. The library facilities have been so designed that the latest as well as archival materials on the subjects related to economics, banking, finance and allied subjects are within easy access of the readers. The State Bank library has been financed adequately through annual budget as well as special grants for procurement of books and periodical literature. All out efforts are made to ensure the availability of standard reading material in the library. Besides purchases, the library receives publications of central banks, United Nations, IMF, the World Bank, ADB, etc., and others international organizations like OPEC, OECD, Islamic Development Bank, Bank for

38 International Settlements, etc., local public/private sector banks, financial & industrial institutions, government’s departments and research organizations on complimentary or exchange basis. In addition to a large collection of books, journals and other documents, the library is also maintaining clipping files on about 180 subjects relating to economics, banking, commerce, finance, politics, etc., since 1951. Interesting news items, features, articles, policy statements issued by the Government functionaries, speeches / addresses of presidents and prime ministers, etc. appearing in the national dailies are regularly clipped and maintained properly in the relevant files, which serve as valuable sources of information to those who are interested in historical research on issues relating to these subjects. The SBP Library is open to scholars, students and others who wish to avail its facilities. A Friends of SBP Library Program provides access for outsiders to our Library resources.

Development of Specialized Financial Institutions: The State Bank has actively participated in setting up a number of specialized credit institutions designed to meet the long and medium-term financing needs of various sectors of the economy. These institutions include Pakistan Industrial Credit and Investment Corporation of Pakistan (PICIC), Industrial Development Bank of Pakistan (IDBP), National Development Finance Corporation (NDFC), Agricultural Development Bank of Pakistan (ADBP), Federal Bank for Cooperatives (FBC) and House Building Finance Corporation (HBFC). These institutions were established to provide credit to industrial, agricultural and other sectors. The Bank also subscribed to the share capital of the People's Finance Corporation - renamed subsequently as Small Business Finance Corporation (merged in to the present Small and Medium Enterprise Bank), the Equity Participation Fund and Banker's Equity. These institutions were designed to provide finance to small businesses and the major sectors of the economy.

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Summary: State bank of Pakistan is central bank of Pakistan, which makes it central authority in banking sector of Pakistan. It has various obligations like formulation of economic policies, monitoring of banking sector, issuance of notes, providing banking services to Government as well as other banks and many more. Mission of State bank of

Pakistan is “to provide excellent banking and financial services to stakeholders besides ensuring implementation of SBP policies in order to command their trust and respect.” Central Bank was established very soon after independence of Pakistan by father of Nation, Quaid-e-Azam and was nationalized in 1974, after which scope of its functions and activities was considerably enlarged. SBP was further divided in to two subsidiaries named SBP-BSC and NIBAF in 2002. Currently it has 16 field offices working in different cities of Pakistan and has over 28 departments to look after its wide range of functions. State Bank of Pakistan is centralized in its organization and management, but recently it has undergone number of programs to make itself more flexible in its management approach. SBP is headed by Governor SBP. Managing director and Chief Managers of their respective field offices are answerable to Governor SBP. Meetings are held on monthly basis to get views of all employees on different problems and decisions of bank. SBP has made efforts to make its decision making recently but setting up committees for different fields on different levels. Human resource and training department is one of major strength of SBP. These departments hire employees with very systematic procedure. NIBAF and Training department not only conduct programs for newly hired employees but also initiate programs to bring flexibility in management practices. I.T department works for better and easily adoptable communication system in organization apart from maintaining and securing data. I.T department is also behind strong online banking system of SBP. Transparent reward recognition program of SBP distinguishes it from other organizations. This program encourages employees and motivates them by awarding them in different ways on different levels.

HRM department, I.T department, Islamic banking system, banking services to

40 Government could be considered as strengths of SBP. It would not be false to state that SBP has played a strong role in development of prospering banking sector of Pakistan. The positive is that they are trying to bring even more improvements in their organization by introducing different programs and establishing new departments. The only way for SBP from here is forward!