Association holds Orientation Session on
‘SBP’s Guidelines &
Disclosures on Governance & Remuneration practices’
February 21, 2017: Mr. Ashraf Mehmood Wathra, Governor,
State Bank of Pakistan, has said that better corporate
governance is a cornerstone of its policy and is a
crucial aspect that affects shareholders, depositors and
other stakeholders. He was addressing an orientation
session on the guidelines on Remuneration Practices. He
said, “These guidelines should be treated as a basic
benchmark and the industry can take additional measures
by taking into consideration international best
The interactive orientation session on SBP’s ‘Revised
Guidelines on Remuneration Practices’ was organized by
the Pakistan Banks’ Association (PBA).
Earlier, Mr. Mohammad Aftab Manzoor, Chairman, Pakistan
Banks’ Association, in his welcome address said that PBA
continues to be engaged with SBP on many broad impact
banking related matters. He assured increasing and
growing engagement with SBP in developing and
inculcating best and fair practices and standardization
Addressing the audience, Mr. Tawfiq Hussain, CEO, PBA,
said that the banks in the past used different models to
reward the employees, but the 2008 global financial
crisis compelled the regulators and global standards
setting bodies to develop risk based compensation
guidelines. He said, SBP has also developed such
guidelines, which include a market perspective provided
by PBA, and are quite comprehensive. He said there are,
however, different readiness levels among the banks
which is why PBA took the initiative to host this
orientation session for all its members. He further said
the objective is to bring all banks up to a base line of
understanding. PBA will continue to act as a bridge
between the banks and the SBP for the benefit of the
banking industry stakeholders.
Mr. Faraz Anwer, Partner, A.F. Ferguson & Co (PwC) made
a presentation on SBP Remuneration Guidelines. He
discussed global shifts, practical actions and
challenges in local context and how regulations are
expected to drive strategy, HR and risk sophistication.
He elaborated on Material Risk Takers (MRTs) and
Material Risk Controllers (MRCs), use of risk adjusted
performance measurement and the applicability across
both local and international operations and banking
Faraz also presented on remuneration composition,
deferrals and, most importantly, criticality of the role
of Board and senior management.
Faraz emphasised that the deadline for the design of the
Remuneration Policy is December 2017 and for its
implementation it is December 2018, with quarterly
reports to be submitted to SBP. The first report of
March 2017 will be due in April 2017.
The presentation was followed by a Q&A session.
Held at the State Bank of Pakistan’s Learning Resource
Centre, the orientation session was attended by SBP
senior management, Board members of banks, Presidents of
banks, COOs, and other senior bank executives.