State Bank of Pakistan''s Banking Corporation of Pakistan''s (BSC) five out of 11 departments are being partially relocated to Lahore, closer to Central and Northern regions - not the head office of BSC - to ensure greater operational efficiency and logistic ease pertaining to these activities. The SBP submitted a brief to the Senate Finance Committee while briefing on shifting of the Banking Service Corporation (BSC) stated "five out of 11 departments of SBP BSC, having oversight on functions relating to currency management, bankers to governments, internal audit, foreign exchange operations and implementation of Development Finance Group (DFG) related policies, performed at office level on transactional and day-to-day basis are being partially relocated closer to Central and Northern regions to ensure greater operational efficiency and logistic ease pertaining to these activities".
The shifting to Lahore was considered as a preferred option both by the management of SBP and SBP BSC and the decision for relocation to Lahore was made with the prior knowledge of the Board of Directors of SBP BSC. "The BSC is headed by a Managing Director (MD) who has a team of Directors and Chief Managers, directly reporting to him. In order to create efficiency in oversight functions, improve operational efficiency and bring about synergy in functions, some modifications were carried out in the organisation structure of SBP BSC, with the approval of its Board of Directors.
"The departments at head offices were placed in 3 groups whereas its 16 field offices were clubbed into three regions, ie, (i) South, (ii) Central and (iii) North Regions. A review of existing work quantum was carried out which identified that performance of SBP BSC can be further improved if decision making forums at head office Karachi are brought closer to field offices in the Central and North Regions, where majority of business functions are being performed.
"Eleven out of 16 field offices are located in Central and North Regions, which share 60% of our workload, engage 62% of our human resource and provide coverage to two third of NBP chests. The meeting was informed that SBP has already initiated installation of different types of bank note authenticating machines at field offices of SBP BSC. "In addition, it has also procured and installed state of the art machines capable of authenticating around 100,000 bank notes per hour. These machines are now working at Karachi offices and efforts are being made to procure these machines for the large offices in KPK and Punjab.
"This initiative would require the senior management of SBP BSC, relating to currency management, to remain involved in the entire process, as installation of these high tech machines requires immediate and on the spot decision making processes as was observed during installation of the machines at Karachi. "The upcountry remittances of fresh banknotes to Peshawar, Rawalpindi, Islamabad and Muzaffarabad as well as Gujranwala and Sialkot offices are managed by Lahore office via road transport.
"Lahore office also carries out oversight of Faisalabad, Multan, Bahawalpur and Dl Khan Offices. As the Mint is located in Lahore, entire movement/distribution of coins across the country is being managed from Lahore and since the bulk of currency operations are handled in Central and North Regions, the management of these operations from Lahore will lead to effective oversight, improve liaison with the Pakistan Railways and allow SBP BSC to fulfill its statutory functions more effectively for relocation exercise space availability at SBP BSC offices in Multan, Faisalabad, Rawalpindi, Islamabad and Peshawar was also evaluated, alongside the available space at Lahore.
"The relocation of internal audit would also ensure more frequency of audit exercise at these offices to improve the supervisory oversight and work of currency management is already being performed through issue offices at Lahore, Peshawar and Quetta in addition to Karachi.
"The transactional work relating to government banking, foreign exchange operations and DFSD are also performed at these offices through their units already functioning at these offices. It may be added here that work relating to consolidation of SBP BSC balance sheet, accounts of central and provincial governments and other stakeholders, including the current accounts of banks and other financial institutions, including transfer of funds in respect of inter-government adjustment advises and grants received from Finance Division, Islamabad would continue to be carried out from Karachi. "Further, a sizeable proportion of these departments will be retained at Karachi Head Office to meet the needs of the South Region.
"The current decision only aims to improve organisational performance, enhance effectiveness of internal controls, ensure consistency in decisions and bring about efficiency in operations of SBP BSC." The meeting was further informed that as far as staffing is concerned, this relocation exercise is being managed purely on an option basis. So far, employees have overwhelmingly responded to the decision of the management and as of today 128 options from the employees have been received for relocation to Lahore. The last date for submission of options is October 14, 2016. The Head Office of SBP BSC, its six departments including the Strategic and Corporate Affairs Department will continue to be based in Karachi. The MD Office will also continue be housed at Karachi.