Page 45 - NIBAF-Training Matters July - December 2022

Proceeds Realization quickly evaporate market liquidity risk profiles of customers to their
Certificates(PRCs). In order to with illiquidity setting-in for bank’s as well of the regulator’s
apprise bankers on key extended periods. The role of complete satisfaction. Any
requirements under the liquidity in the global financial crisis negligence in the area may lead to
further underscored the importance
significant financial losses for the
instructions, a one-day online of establishing a robust liquidity risk bank due to reputational,
session on the topic was organized management framework in banks. operational, and legal damages. In
by NIBAF-Quetta and conducted NIBAF-Quetta conducted a 2-day order to build necessary expertise
by Ms. Saima Hameed, Joint online program on “Liquidity Risk in area and guide relevant officers
Director, Exchange olicy Management” for banks on Oct 18 to perform CDD and establish
Department, SBP on Sept 15, 2022. & 20, 2022. Mr. Muhammad appropriate risk profiles/ratings for
Ms. Saima briefed the participants Hasnain Yousaf Joint Director, different categories of customers, a
International Financial Institutions
two-day online session on the topic
on the regulatory instructions on and Investor Relations Unit, was conducted by Ms. Sumera
inward remittances, types of inward Governor Office, SBP conducted Baloch, Additional Director/ Head
remittances under official channels, the session. Mr. Hasnain is an of Analysis Division, Financial
modes of inward (workers’) expert in Financial Markets and Monitoring Unit from Oct 26-27,
remittances, cancellation of inward Treasury Management and is 2022. Ms. Baloch explained the
remittance, overview of SBP currently responsible for promoting CDD process and ongoing
Initiatives promoting Home visibility of Pakistan’s Financial monitoring, AML/CFT regulations
relating to CDD, importance of an
Markets to prospective investors
Remittances including Pakistan and stakeholders. The trainer effective Transaction Monitoring
Remittance Initiative and the Sohni stressed that banks manage their Systems(TMS), components of
Dharti Remittance Program, balance sheets under the ALM lens, TMS, variables to monitor , banking
standard format and procedure for plan for and maintain sufficient transaction to customers with
Automated Issuance and liquidity to withstand stressed certain risk profiles (TFS), risk
Verification of PRCs, How to avoid market conditions, and develop profiling for private individuals,
Exposed
Politically
contingency funding plans to deal
Persons,
misuse of e-PRC and S-PRC, key with situations of market turmoil. He corporate customers, partnerships
violations observed in Banking further discussed the significance and unincorporated bodies, Public
Industry in respect of receipt and of sound liquidity management sector bodies, governments, state-
processing of inward remittances & practices for financial institutions, owned companies , charities, trusts
preventive measures to avoid SBP factors effecting liquidity, assessing and foundations, and offshore
penalties. The session was central bank and banking sector corporations. She further explained
attended by participants from SBP balance sheets and liquidity Suspicious Transaction Reporting
and Red Flag indicators in detail.
matrices, structural liquidity and
and commercial banks. impact of central bank money During the session, Ms. Sumera
market operations, global and local shared several cases and
regulatory standards on LRM, risk scenarios which constitute
Liquidity Risk governance under ALCO, suspicious transactions and must
Management preparing the funding strategy and be reported to FMU. It was a highly
exercises on behavioral models, interactive session with many
Effective Liquidity Risk structural liquidity and scenario queries from participants including
Management holds significance for analysis. Participants from different banks, MFBs, Exchange
any business enterprise but more banks, MFBs and SBP attended the Companies and SBP.
so for financial institutions, session.
especially the deposit-taking
institutions, because a liquidity Customer Due Duty Drawback (DLTL) &
shortfall at a single institution can Diligence(CDD) and Risk Subsidy Schemes
trigger system-wide repercussions; Profiling under SBP
any indication of duress can
AML/CFT Regulation and Foreign Exchange Operation Units
Laws of SBP BSC offices have been
processing exporter claims with
respect to various Subsidy and
Establishing a customer Duty Drawback Schemes on behalf
relationship has come to be a of Federal and Provincial
crucial step for banks with the Governments as per instructions
burgeoning requirements under issued by the relevant
CDD function. Banks must assess Ministry/Department. Since various