Governance Structure

The State Bank of Pakistan (SBP) is governed under the SBP Act, 1956, which gives the Bank the
authority to function as the central bank of the country. The Act mandates the Bank to regulate the
monetary and credit system of Pakistan and to foster economic growth in the best national interest
with a view to securing monetary stability and to maximize utilization of the country’s productive
resources.

Board of Directors
The SBP is governed by a Board of Directors, which is responsible for the general supervision and
direction of the affairs of the Bank, other than the functions assigned to the Monetary Policy
Committee. The ten-member Board is chaired by the Governor SBP and comprising of eight non-
executive Directors and the Federal Secretary Finance. Non-executive members of the Board are
appointed by the Federal Government for a period of 3 years, under Section 9(2)(c) of the SBP Act,
1956. The Governor is also the Chief Executive Officer and manages the affairs of the Bank. Seven
meetings of the Board were held during FY17. One vacant position on the Board emerged consequent
to resignation of Mr. Zafar Masud in August 2016.

Executive Management
The Governor being the Chief Executive heads the executive management. He is assisted by one or
more Deputy Governors. In addition to the Governor and Deputy Governors, the management
hierarchy includes Executive Directors, Chief Economic Advisor and departmental heads.
(Organogram is placed at Annexure-B).

The Governor
The Governor is appointed by the President of Pakistan for a term of three years which is renewable
once. During the year, Mr. Ashraf Mahmood Wathra completed his 3 year term as Governor on April
28, 2017 and Mr. Riaz Riazuddin, Deputy Governor (Policy) was appointed as Acting Governor till
appointment of the Governor. Subsequently, Mr. Tariq Bajwa, the present Governor, was appointed
on July 7, 2017 for a 3 year term.

Deputy Governors
The Governor is assisted by one or more Deputy Governors (DGs) appointed by the Federal
Government for a period not exceeding five years. Presently, Mr. Riaz Riazuddin and Mr. Jameel
Ahmad are serving as Deputy Governors since March 30, 2015 and April 11, 2017 respectively.
Mr. Jameel Ahmad was serving as Executive Director (Banking Supervision Group) before assuming
responsibilities as DG. Earlier, Mr. Saeed Ahmad remained Deputy Governor till March 2017. He
was reappointed after completing his first term as DG on January 21, 2017, but he resigned after his
appointment to another government institution.

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State Bank of Pakistan Annual Report FY17

Board of Directors1

Mr. Tariq Bajwa, Governor, Chairman Board of Directors and Chairman Monetary Policy Committee

A career civil servant by profession, Mr. Bajwa joined the Civil Service of Pakistan in 1981 and
assumed various Secretariat, Field and Staff assignments, including, among others, General Manager
PIA, Head of Pakistan's Trade Mission in Los Angeles, and Advisor Finance to the United Nations
Development Program (UNDP). Mr. Bajwa also served as Chairman, FBR for over 2 years till October,
2015 before his appointment as Secretary, Economic Affairs Division. His last assignment as Civil
Servant was Secretary Finance from where he retired on June 18, 2017. He holds a Master's degree in
Public Administration from Kennedy School of Government, Harvard University, where he was
awarded the prestigious Littauer Fellowship, and an LLB from the University of the Punjab, Lahore.

Mr. Shahid Mahmood (Member, SBP Board since June 19, 2017)
Secretary, Finance Division, Government of Pakistan and ex-officio member of the
SBP Board. Mr. Mahmood has served as Additional Secretary (External Finance)/
Special Assistant to Finance Minister, Special Secretary, Finance Division, and
Principal Secretary to the Chief Minister, Punjab. He holds a Master’s degree in
English Literature from Government College, Lahore, and a Bachelor’s degree in
Economics & Statistics from the same institution.

Dr. Tariq Hassan (Member, SBP Board since March 22, 2016)
Attorney and Advocate, Supreme Court of Pakistan and Chairman, Audit Oversight
Board. Dr. Hassan is a former Chairman, Securities and Exchange Commission of
Pakistan, and previously has also served as advisor to the Finance Minister of
Pakistan. He has also been associated as legal Counsel with the World Bank in
Washington, DC, International Fund for Agriculture Development in Rome, and
Shearman & Sterling in New York. In addition to practicing law, he has been
teaching law as an adjunct professor at George Washington University and Fletcher
School of Law & Diplomacy, USA; and Departments of Law at LUMS University
and International Islamic University, Pakistan. He did his PhD in Juridical Science
from Harvard University, USA.

Hafiz Mohammad Yousaf (Member, SBP Board since March 22, 2016)
A Chartered Accountant by profession with professional experience of over 30
years. He has served as Member SECP Board and President, Institute of Chartered
Accountants of Pakistan, besides holding other important responsibilities. He is
Fellow member of Institute of Chartered Accountants of Pakistan (FCA).

1
Board Composition is as of June 30, 2017.

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 Governance Structure

Mr. Zubyr Soomro (Member, SBP Board since March 22, 2016)
Educated at the London School of Economics and SOAS, Zubyr Soomro has been a
career international banker with over 30 years at Citibank with assignments in the
Middle East, Turkey, UK and Pakistan. In 1997 he was appointed as Chairman and
President of United Bank and tasked with restructuring it for Privatisation after
which he stayed on to head Citibank’s Pakistan franchise. He has been Chairman /
President of Pakistan Banks Association, American Business Council and OICCI.
Currently he is the Chairman of the Pakistan Microfinance Investment Company
and on the Boards of Acumen, Grameen Foundation USA, EFG Hermes, LRBT and
Aitchison College and a Member of the Finance Minister’s Economic Advisory
Council.

Khawaja Iqbal Hassan (Member, SBP Board since March 22, 2016)
A seasoned banker who established a commercial bank and a leading investment
banking firm, with 35 years’ experience in the financial sector. He is serving on the
Boards of prominent public and private enterprises. He has also served on many
Task Forces established by the Government of Pakistan. Mr. Hassan was awarded
the Sitara-i-Imtiaz for his meritorious contributions to national interest.

Mr. Ardeshir Khursheed Marker (Member, SBP Board since March 22, 2016)
A businessman by profession, Mr. Ardeshir Khursheed Marker is partner and
Director at Green Bean Coffee Company Ltd. He is also a partner in Merck Marker
Pvt. Ltd. and manages its financial and business development areas. Mr. Marker
holds a Masters Degree in Economics from the London School of Economics.

Mr. Mohammad Riaz (Member, SBP Board since March 22, 2016)
A public servant of long standing, Mr. Mohammad Riaz has served as Secretary,
National Assembly of Pakistan. He has successfully undertaken various
assignments at the Federal Board of Revenue in the capacity as Member, Director
General and Head of the Customs & Excise. Mr. Riaz has also served as Counsel
General of Pakistan at Turkey and Commercial and Economic Counselor at
Embassy of Pakistan in France. He holds a Masters Degree in Development
Economics from Williams College, USA.

Mr. Sarmad Amin (Member, SBP Board since March 22, 2016)
A progressive entrepreneur and a businessman, Mr. Sarmad Amin is a member of
Lahore Chamber of Commerce and Industry (LCCI) and All Pakistan Textile Mills
Association (APTMA). He has remained Vice President of LCCI and member
Executive Committee of APTMA. Presently, Mr. Amin is Chairman of Samin
Textiles Limited besides being member of the Boards of several conglomerates. He
is also honorary Consul of the Republic of Austria for Pakistan. He graduated from
the University of the Punjab, Lahore.

Corporate Secretary
The Corporate Secretary is the Secretary to the Board, Committees of the Board and the Monetary
Policy Committee (MPC) and acts as a focal person for communication between the Board and the
management. The position is responsible for recording the proceedings of the meetings of the Board

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State Bank of Pakistan Annual Report FY17

its Committees and MPC and ensuring compliance with statutory and regulatory requirements for
effective implementation of the Board’s decisions.

The Corporate Secretary is also responsible for ensuring effective Corporate Governance standards
and availability of relevant information to the Board and MPC members to facilitate informed
decision-making. In addition to the responsibilities of organizing meetings of the Board, its
Committees and MPC, the Corporate Secretary interfaces with the Federal Government on matters
related to the Governor, Deputy Governors, Directors of the Board and External Members of the
MPC.

Monetary Policy Committee (MPC)

The Monetary Policy Committee is an independent, statutory body responsible for formulating the
Monetary Policy. The MPC consists of ten members, with the Governor as Chairman, three members
of the Board nominated by the SBP Board, three senior executives of the SBP nominated by the
Governor, and three external members (economists) appointed by the Federal Government on the
recommendation of the SBP Board. The external members are appointed for a term of three years.

Present composition of the MPC includes Mr. Tariq Bajwa, Governor SBP as Chairman MPC,
Mr. Khawaja Iqbal Hassan, Mr. Mohammad Riaz and Mr. Ardeshir Khursheed Marker, members SBP
Board. Dr. Asad Zaman, Dr. Qazi Masood Ahmad and Dr. Aliya Hashmi Khan are the three external
members whereas Mr. Riaz Riazuddin Deputy Governor (Policy), Mr. Jameel Ahmad Deputy
Governor (Banking & FMRM) and Mr. Inayat Hussain - Executive Director (FS & BSG) are the three
executive members of MPC. The Committee met six times during FY17.

Brief profiles of external members of the MPC are as follows:

Dr. Asad Zaman (Member, MPC since January 25, 2016)

[BS Math MIT (1974), Ph.D. Econ Stanford (1978)] has taught at leading
universities like Columbia, U. Penn., Johns Hopkins, Cal. Tech. and Bilkent
University, Ankara. Currently he is Vice Chancellor of Pakistan Institute of
Development Economics. His textbook Statistical Foundations of Econometric
Techniques (Academic Press, NY, 1996) are widely used as a reference in
advanced graduate courses. He is managing editor of International Econometric
Review and Pakistan Development Review. His publications in top ranked journals
like Annals of Statistics, Journal of Econometrics, Econometric Theory, Journal of
Labor Economics, etc. have over 1000 citations as per Google Scholar.

Dr. Qazi Masood Ahmed (Member, MPC since January 25, 2016)
Professor and the Director, Centre for Business and Economic Research, Institute
of Business Administration (IBA), earlier also served the institute as the
Chairperson, Centre for Executive Education (CEE). Other current assignment
includes member Tax Advisory Council, the Federal Board of Revenue,
Government of Pakistan and member, Board of Governor, Sindh Education
Foundation. Dr Qazi also served Government of Sindh as its Chief Economist for
two years. His research and teaching experience is spread over 25 years and he has
published over 50 papers in international and national journals. Additionally, he
also served the Applied Economics Research Centre, University of Karachi and
Social Policy and Development Centre for more than fifteen years.

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 Governance Structure

Dr. Aliya Hashmi Khan (Member, MPC since March 22, 2016)
Ex-Professor of Economics and Dean Faculty of Social Sciences at Quaid e Azam
University. Dr. Aliya Hashmi Khan has research interests in the areas of Macro
Economics, Labor Economics and HR Development. She has been contributing as
Director/ Member on Boards of several organizations and advisory bodies. She has
been awarded the President’s Medal in 2010 for services rendered in the economic
empowerment of women.

Committees of the Board

Committees of the Board extend the oversight function of the Board in certain specialized areas. The
details of the Committees of the SBP Board are summarized as under:

Committee on Audit
The Committee assists the Board in reviewing SBP’s financial statements, auditing, accounting and
related reporting processes, the system of internal controls, governance, business practices and
standards of conduct established by the management and the Board. The Committee met seven times
during the year. It is chaired by Hafiz Mohammad Yousaf, with M/s Khawaja Iqbal Hassan, Ardeshir
Khursheed Marker and Sarmad Amin as members.

Committee on Investment
The Committee assists the Board in fulfilling its oversight responsibilities relating to management of
foreign exchange reserves. It reviews the strategy and policy for management of the reserves; and
approves operational guidelines for investment, appointment of asset managers, custodians,
investment consultants, among other matters. It also reviews the performance of the foreign exchange
reserves managed in-house and externally, and the appropriateness of the approved investment policy,
its benchmarks and guidelines on an annual basis or as warranted by the global market conditions.
The Committee met three times during the year. It is chaired by Mr. Shahid Mahmood, with
M/s Khawaja Iqbal Hassan and Sarmad Amin as members.

Committee on Human Resources

The Committee assists the Board in reviewing and approving HR policies prepared by the
management. It reviews all the proposals requiring approval of the Board on formulation, revision,
modification or interpretation of HR policies, and submits its recommendations to the Board. The
Committee also reviews the terms and conditions of employment of senior level Bank officers
including those reporting directly to the Governor. The Committee met four times during the year. It
is chaired by Mr. Zubyr Soomro, with Mr. Mohammad Riaz as member.

Publications Review Committee (PRC)

Publications Review Committee of the Board assists the Board in the review and approval of the
Annual and Quarterly Reports on the State of the Pakistan Economy, Annual Performance Review of
SBP, and the Financial Stability Review. The Committee deliberates on the said draft reports and
reviews them for the consideration and final approval of the Board. The Committee met six times
during the year. It is chaired by Mr. Ardeshir Khursheed Marker, with Mr. Mohammad Riaz as
member.

Enterprise Risk Management Committee

The Committee assists the Board in fulfilling the oversight responsibilities with respect to risk
management in the Bank. The Committee also reviews and approves Bank’s risk management policy,
provides an ongoing input to management, monitors the Bank’s risk profile and its potential exposure

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State Bank of Pakistan Annual Report FY17

to different risks. The Committee also coordinates, when required, with the ERM Committee of the
management and with other Committees of the Board. The Committee is also mandated to oversee
risks emerging from the subsidiaries until such time that the subsidiaries set up their own ERM
framework. The Committee met four times during the year. It is chaired by Khawaja Iqbal Hassan,
with Mr. Zubyr Soomro and Dr. Tariq Hassan as members.

Financial Law Reform Committee (FLRC)

The Committee assists the Board in proposing a cohesive and comprehensive legal framework,
reflecting the principles of financial regulatory authorities as practiced globally and applicable in the
domestic environment. Besides formulating its recommendations regarding amendments in the legal
framework, the Committee also takes into account comments and observations of the various
departments on inconsistencies and anomalies in the legal framework. The Committee met eight times
during the year. It is chaired by Dr. Tariq Hassan, with Hafiz Mohammad Yousaf as member.

Corporate Management Team (CMT) and CMT-HoDs forum

The Corporate Management Team (CMT) serves as the principal forum for discussion and
consultation on critical management and operational issues. It facilitates decision making and their
implementation, especially in matters where several departments are involved. The CMT is headed by
the Governor and comprising of Deputy Governors and Executive Directors, as well as Managing
Directors of the SBP subsidiaries i.e. SBP-BSC, NIBAF, PSPC and DPC. In addition to the CMT,
combined meetings of the CMT and the Heads of Departments (HoDs) provide a broader platform to
deliberate issues of wider implications. Depending on the agenda, HoDs of SBP-BSC are also invited
to attend the meetings.

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 Governance Structure

Corporate Management Team (CMT)2

Mr. Tariq Bajwa

Governor

Mr. Riaz Riazuddin Mr. Jameel Ahmad

Deputy Governor Deputy Governor
(Policy) (Banking & FMRM)

Syed Irfan Ali Mr. Inayat Hussain Syed Samar Hasnain

Executive Director (BPRG) Executive Director (FRM, FS & BSG) Executive Director (DFG)

Mr. Muhammad Ali Dr. Saeed Ahmed Mr. Amjad Manzoor Mr. Mohammad Mansoor Ali
Malik Executive Director Executive Director (MPRG & Executive Director/CIO Director OCS/ Corporate
(FMRM) HR)/ Secretary
Chief Economist

Mr. Amer Aziz Mr. Qasim Nawaz Mr. Muhammad Haroon Ms. Lubna Farooq
Managing Director Managing Director (SBP-BSC) Rasheed Malik Managing Director (DPC)
(NIBAF) Managing Director (PSPC)

2
CMT Composition as of September 29, 2017

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State Bank of Pakistan Annual Report FY17

Management Committees
In addition to the CMT, following are the major management committees which assist the Governor
in making decisions and in formulation of various policies:
 Banking Policy Committee
 Monetary Operations Committee
 Budget Committee of Management
 Business Continuity Planning Committee
 Data Warehouse Committee
 Derivatives Approval & Review Team
 Strategic Plan Steering Committee
 Enterprise Risk Management Committee
 Investment Committee of Management
 Library Committee
 Management Committee on Information Technology
 Management Committee on Properties and Equipment
 Payment Systems Policy Committee
 Publications Review Committee
 Refund Committee (Export Refund Committee)
 Financial Stability Executive Committee
 Sports Committee

SBP Subsidiaries
The SBP Act, 1956 (as amended) provides for the establishment of subsidiaries for managing
functions like receipt, supply, and exchange of currency notes and related operational functions, to
protect small depositors in case a bank cease to be a going concern and for training and development
needs of its employees etc. In line with these provisions, SBP holds four subsidiaries, including the
State Bank of Pakistan-Banking Services Corporation (SBP-BSC), National Institute of Banking and
Finance (NIBAF), Pakistan Security Printing Corporation (PSPC) and Deposit Protection Corporation
(DPC).

SBP-BSC
Established under the SBP-BSC Ordinance 2001, SBP-BSC is a fully owned subsidiary of SBP with
the mandate to perform tasks such as currency management, facilitating the inter-bank settlement
system, and sale/purchase of savings instruments of the Government on behalf of National Savings
Organization. Additionally, SBP-BSC collects revenue and makes payments for and on behalf of the
Government as well as carrying out operational work relating to development finance, management of
public debt, foreign exchange operations and export refinance. The Board of Directors of SBP-BSC,
chaired by the Governor SBP, comprises all members of the SBP Board and the Managing Director of
SBP-BSC.

NIBAF
National Institute of Banking and Finance (NIBAF) is the training arm of SBP with the mandate to
develop, design and conduct training and capacity building programs for the employees of SBP and
SBP-BSC. The subsidiary also conducts international courses on central and commercial banking in
collaboration with the Federal Government. Further, NIBAF also conducts training programs for
banks and financial institutions.

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 Governance Structure

Pakistan Security Printing Corporation (PSPC)

The PSPC is a new addition in the SBP family. It was acquired during the year from the Federal
Government to have full control over the full spectrum of banknote printing function. The core
mandate and function of PSPC is to print banknotes and prize bonds as per the indent raised by SBP.
The Bank during the year constituted its Board and appointed its Managing Director. The Governor is
the Chairman of PSPC Board, whereas DG (Policy), MD BSC and ED Financial Resource
Management, JS Internal Finance are the Board members.

Deposit Protection Corporation (DPC)

DPC has been established under the Deposit Protection Corporation Act of 2016 as a wholly owned
subsidiary of State Bank of Pakistan. It will provide the much needed “safety net” to the small
depositors and thus plug a major gap in our financial stability regime. The DPC will initiate an
explicit deposit insurance scheme, the membership of which shall be mandatory for all banking
companies operating in the country including Islamic banks. The insurance premium to be collected
from banking companies shall be the major source of fund for DPC to protect/payback small
depositors in case of failure of their bank. While the appointment of the DPC Board is under process
with the Federal Government, the Bank has appointed its MD. The DPC will be made operational
after constitution of its Board.

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