Cen­tral Bank set to launch 3rd FICF to­mor­row

The Pak Banker - - FRONT PAGE - Muham­mad Yasir

State Bank of Pak­istan (SBP) will form in­spec­tion teams to con­duct reg­u­lar visit of com­mer­cial, mi­cro­fi­nance Is­lamic banks and Di­rect Fi­nance In­sti­tu­tions (DFIs) for as­sess­ing their records re­lated to In­sti­tu­tional Risk As­sess­ment Frame­work.

The cen­tral bank has pre­vi­ously re­ceived sur­veys and ques­tion­naire of IRAF from com­mer­cial banks and DFIs on half yearly ba­sis, how­ever, it has de­cided to re­view the re­sults of ques­tion­naire through in­spec­tion team.

In this re­gard, it is­sued an in­struc­tion to banks, mi­cro­fi­nance bank and Is­lamic banks to fill in IRAF Self As­sess­ment Ques­tion­naires on half yearly ba­sis, ob­tain­ing the ap­proval of Board of Direc­tors within forty-five days of the cut­off date, and keep th­ese ques­tion­naires for their own record.

The cen­tral bank in­tro­duced IRAF Ques­tion­naire in 2004 and then re­vised with ad­di­tional ques­tions in 2008 for en­sur­ing proac­tive mon­i­tor­ing of the risks the banks/DFIs are ex­posed to and to fur­ther strengthen the ex­ist­ing su­per­vi­sory mech­a­nism of the State Bank of Pak­istan.

The frame­work en­vis­ages a col­lab­o­ra­tive and seam­less su­per­vi­sory fo­cus amongst the var­i­ous su­per­vi­sory de­part­ments within the SBP. The bank­ing com­pa­nies pro­vided de­tails re­lat­ing to four ar­eas in­clud­ing com­pli­ance with stan­dards, codes and guide­lines; su­per­vi­sory and reg­u­la­tory in­for­ma­tion; fi­nan­cial per­for­mance and con­di­tion and mar­ket in­for­ma­tion and in­tel­li­gence. It was the re­spon­si­bil­ity of the Board of Direc­tors to fill out th­ese ques­tion­naires and sub­mit them to Bank­ing In­spec­tion Depart­ment on half yearly ba­sis, within forty-five days of the cut­off date, which would be June 30th and De­cem­ber 31st. In case of banks in­cor­po­rated out­side Pak­istan, with branches op­er­at­ing in Pak­istan, the coun­try man­ager would be au­tho­rized to fill out the forms and sub­mit the same.

From now on­ward, the in­spec­tions team will visit banks' head­quar­ters and its branches to as­sess in­put of IRAF which in­clude com­pli­ance re­lated to know your cus­tomers de­tails such as true iden­tity of the ben­e­fi­cial own­ers of all ac­counts opened by a per­son, en­tity etc,; the real party in in­ter­est or con­trol­ling per­son/en­tity of the ac­count(s) in case of nom­i­nee or mi­nors ac­count? the mon­i­tor­ing sys­tem in Bank/DFI to check cus­tomers ac­counts and trans­ac­tions on reg­u­lar ba­sis.

The as­sess­ment will be checked whether the bank­ing com­pa­nies and DFI get it­self credit rated by a credit rat­ing agency, which is on the ap­proved panel of the State Bank of Pak­istan. Whether the Bank/DFI up­date its credit rat­ing for the last fi­nan­cial year within six months from the date of close of the fi­nan­cial year and with re­gard to sus­pi­cious trans­ac­tions, the bank/ DFI cor­re­spon­dent with cen­tral bank to in­form all com­plex, un­usu­ally large trans­ac­tions as men­tioned in the PRs.

Be­sides the re­view will pro­vide anal­y­sis of banks re­lated to Bank/DFI mea­sure from adopt­ing any prac­tices through which an os­ten­si­bly dif­fer­ent po­si­tion of the ac­counts could be de­picted in fi­nan­cial state­ments with par­tic­u­lar ref­er­ence to the de­posits, MCR, non-per­form­ing loans/as­sets, pro­vi­sion­ing, profit, in­ter-branch and in­ter-bank ac­counts. Do Banks/DFIs meet the min­i­mum con­di­tions as pre- scribed by SBP be­fore tak­ing ex­po­sure in­clud­ing Bor­rower's ba­sic fact sheet, loan ap­pli­ca­tion form, fi­nan­cial ac­counts and CIB re­port, it said.

Mean­while, The State Bank of Pak­istan will launch the 3rd Fi­nan­cial In­no­va­tion Chal­lenge Fund (FICF) round to­mor­row in Is­lam­abad.

The Fi­nance Min­is­ter Ishaq Dar will pre­side over the launch­ing cer­e­mony. FICF is a com­po­nent of the larger Fi­nan­cial In­clu­sion Pro­gram (FIP) be­ing im­ple­mented by State Bank of Pak­istan un­der the fund­ing as­sis­tance of the UK Aid.

The chal­leng­ing round is be­ing un­veiled to pro­mote Is­lamic fi­nan­cial ser­vices to meet the la­tent de­mand for Shariah com­pli­ant fi­nan­cial ser­vices in Pak­istan. This round aims to de­velop ed­u­ca­tion and re­search in­fra­struc­ture for pro­mot­ing Is­lamic Fi­nance in part­ner­ship with lead­ing higher ed­u­ca­tion in­sti­tu­tions. The ini­tia­tive will de­velop the in­dus­try's hu­man cap­i­tal base in the form of Is­lamic fi­nance pro­fes­sion­als, spe­cial­ists in­clud­ing Shariah schol­ars, econ­o­mists and re­searchers to meet the grow­ing de­mands for Shariah com­pli­ant prod­ucts and ser­vices in Pak­istan.

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