KARACHI: State Bank of Pakistan (SBP) has adopted International Financial Reporting Standards (IFRS) as its financial reporting framework on advice of International Monetary Fund (IMF) recommendation.
According to SBP Annual Performance Review for the year 2013-2014, issued on Friday, Bank’s financial statements for FY14 are fully compliant with IFRS, making the bank amongst the selected few in the central banks, which have achieved this status.
The Annual Performance Review report said the report revealed IMF Safeguard Mission visited SBP in September 2013 for getting assurance or the adequacy of SBP’s controls, accounting, reporting and auditing systems and to ensure integrity of operations and accordingly state bank decided to adopt IFRS.
The SBP’s reserve management strategy for FY14 was shaped to ensure the security and liquidity of foreign exchange reserves and this helped SBP manage its debt obligations despite a sharp deterioration of reserve position at the start of FY14.
Foreign exchange reserves have bounced back from the middle of the year and are expected to improve further in FY15. SBP continued to invest in the Chinese domestic bond market, after its agreement with the People’s Bank of China in FY13, it added.
Foreign exchange reserves yielded a gross return of more than 1.3 percent during FY14, which is quite high under the prevailing zero yield levels in the global financial markets.
Improved balance of payment position, especially during second half of FY14 helped SBP to accumulate foreign exchange reserves, which increased to $9.1 billion by the end of FY14 from $6.0 billion at end-June 2013.
Rupee-dollar parity, though showed significant volatility, recorded an appreciation of 0.9 percent during the year, the report mentioned.
To bring improvements in industry’s risk management practices, Bank issued guidelines for operational risk management and incentivised the large borrowers to get them externally rated. Further to ensure the integrity of the banking system against Money Laundering and Terrorist Financing, AML/CFT regulations were further strengthened, it added.
To foster a viable alternate banking system, Islamic Baking remained a top priority for the central bank.
SBP has undertaken a major initiative of standardising the Financial Articles in the country. In its first phase, the industry wide implementation of International Bank Account Number (IBAN) based on ISO 13616 was achieved.
The SBP Banking Services Corporation continued to perform various operational activities assigned to it, albeit there is a need to realign some of the operational activities with the changing market trends.
According to governor SBP Ahsraf Mehmood Wathra State Bank would be able to capitalise on the successes gained in the areas of monetary management, financial stability and governance.
