Governor of State Bank asks banks to ensure operational efficiency

KARACHI: Ashraf Mahmood Wathra, Governor of the State Bank of Pakistan, on Monday said banks should focus on private sector lending and deposit mobilization, advising banks to rationalize spread.
“SBP shall review the position by the end of June 2015 and may take regulatory measures to lower the spread,” Wathra said at a meeting with heads of commercial banks and DFIs.
The governor said Islamic banks should reward their customers appropriately in line with their surging profits.
“Banks were advised to come up with their own solutions or the SBP will apply Shariah compliant measures to address the issue,” he said. Wathra told the banks to improve their foreign exchange related services for the small customers.
”The staff needs to be appropriately trained, and products developed to assist public in the easy execution of their genuine foreign exchange transactions such as fees or medical expenses,” he said.
The governor advised that all possible measures should be taken at institutional level to improve the quality of services.
He said SBP will also review its foreign exchange circulars to facilitate the banks but asked them to discourage import of non-essential items by reviewing their internal credit policies.
On the other hand, he directed the banks to facilitate the exporters to the maximum to promote growth in exports and thus the economy.
He was also critical of the banks for inefficiencies of their overseas offices. “SBP has been receiving requests from different banks to have their representation overseas but on the contrary, performance of existing representative offices is not productive. Therefore, instead of having overseas offices, banks should perhaps consider subsidiaries in foreign markets as ‘exchange companies’ which may further help home remittances as well,” he said.
Talking about the IT security management, the governor of State Bank stated that banks must strengthen their back-up support and improve security measures.
Wathra took strong notice of the incidences of banking frauds with the involvement of bank staff and said that banks cannot exonerate themselves from such incidences and must take strict measures to eliminate such frauds. “The banks are responsible for their staff and signatories who authorize transactions,” he said.