SBP BANKING SERVICES CORPORATION

NEW CONTRIBUTORY PROVIDENT FUND TRUST

STANDARD OPERATING PROCEDURES

(SOPs)

TRUST SECRETARIAT
Contents
1. Background .....................................................................................................................................................3

2. Receipt of funds from SBP BSC ................................................................................................................3

3. Investment of Fund Balances ...................................................................................................................3

4. Return on Investment..................................................................................................................................4

5. Member’s borrowing from the Fund .....................................................................................................5

6. Insurance Policy against NCPF.................................................................................................................6

7. Payment of the Fund at End of Employment ......................................................................................8

8. Accounting Policies and Income Tax on Payments from NCPF Accounts ............................ 10

9. Forms .................................................................................................. Error! Bookmark not defined.

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1. Background
1.1. The SBP BSC New Contributory Provident Fund Trust was established with the
approval of the Board. These Regulations shall be deemed to commence with effect
from July 1, 2010.
1.2. Each member of the Trust and the Bank is required to make contribution @ 6% of
the monthly monetized salary of member towards the Fund to be invested in
accordance with Investment Policy approved by the Trustees.
1.3. Under Clause 11 of Trust Deed, it has been provided that “a member shall be
permitted to borrow against the dues but subject to the terms and conditions
contained in the Regulations”.
1.4. The NCPF Regulations read with the instrument of Trust Deed provide broad
guidelines about investment of funds, member’s ability to borrow from his/her
account and insurance policies.
1.5. Standard Operating Procedures (SOPs) are the written instructions aimed to
achieve uniformity in the performance of specific functions of SBP BSC New
Contributory Provident Fund (NCPF).
1.6. These procedures will be governed in accordance with the provisions of the
instruments of Trust and Regulations framed thereunder. In case anything is in
conflict with the Rules & Regulations of Trust, the provisions of Rules &
Regulations would prevail. Moreover, these SOPs can be changed with the consent
of the majority of the Trustees.
2. Receipt of funds from SBP BSC
2.1. The Trust receives monthly contribution on account of its members and Bank’s
contribution, through transfer of funds or any other payment mode in its account
maintained at SBP BSC, Karachi Office, along with member-wise detail of the
amounts. The member-wise details are uploaded in the Subsidiary Ledger of the
Trust to the credit of individual member account.
2.2. In case of members who are on deputation to external agencies/ organizations,
the funds in respect of their NCPF are received from the respective organization or
contributed by officers themselves to SBP BSC. In case the funds of such
members are not transferred to SBP BSC in time, their accounts are credited only
upon the receipt of funds.
3. Investment of Fund Balances
3.1. The available balances in the Fund (monthly contribution @ 6% of the monthly
monetized salary of the Member by both Member and Bank) shall be invested in
accordance with the Investment Policy approved by Trustees in accordance with
the NCPF Trust Deed and NCPF Regulations.
3.2. The decision regarding investment portfolio will be approved by the Investment
Committee. Further, the letter for investment must be signed by two authorized
signatories, as approved by the Trustees. If an account is to be opened with any
bank to execute the investment decision that account will be opened and operated
upon in accordance with the power delegated to the Trustees.

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3.3. The decision to change Investment Policy or to take any individual investment
decision which is not in accordance with the approved Investment Policy would
be brought to Trustees for its approval.
3.4. The Trust Secretariat is responsible for keeping record of all investments so that
any maturing investment is timely encashed and new investment decisions are
taken. For this purpose the Trust Secretariat would prepare a position of inflow
and outflow of funds as well as investments showing available funds. This
information would be used by the Investment Committee to take investment
decisions. The Trust Secretariat would also be responsible for shifting all
instruments of investment that are available in physical form to the Bank for safe
custody in accordance with the Regulations and the Trust Deed.
4. Return on Investment
4.1. The balances in the funds would be managed under three streams, (1) interest
based modes; (2) Riba - free modes of investment, and (3) Members who do not
want to invest their funds. Therefore, their respective profits/return earned on first
two categories would also be managed separately. No profit or return will be paid
to Members who opted for not investing their funds (third category).
4.2. The profits available from interest based modes would be accrued in Trust
accounts on annual basis and would be distributed to the Members on pro-rata
basis in accordance with the daily product of balances in their accounts during the
financial year (1st July- 30th June). These balances would be arrived at after
adjusting the loan or insurance premium availed against the funds by respective
Member. This implies that the amounts that have been taken out of the funds and
are outstanding in the form of loans or have been paid as premium for insurance
would not be eligible for profits from the Trust.
4.3. The profits available from Riba-free mode would be accrued on annual basis and
would be credited upon receipt and then would be distributed annually amongst
the Members on pro-rata basis in accordance with the daily product of balances in
their account during the financial year (1st July - 30th June). These balances would
also be arrived at after adjusting the loan or Takaful payment availed against the
funds by respective Member. This implies that the amounts which have been taken
out of the funds and are outstanding in the form of loans or have been paid as
premium for Takaful would not be eligible for profits from the Trust. However, it
should be noted that profits under Riba-free investment are not pre-determined
and such investment may not earn profit at all. The transfer of profit to Members’
accounts will be subject to receipt of the profit in Trust accounts.

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5. Member’s borrowing from the Fund
5.1. Temporary Advance from NCPF

Eligibility: All Members of the Fund may apply for the Advance to meet
expenses on education, marriage of daughter, religious
ritual burial or other natural calamities etc. subject to clause
11 of NCPF Regulations.

Advance Limit: An amount up to 75% of Member’s own contribution or 3

monetized salaries, whichever is less.

Recovery Period: Repayable in 48 monthly installments. For this recovery, the

Trust Secretariat would intimate the monthly installment to
be recovered from employee’s salary to the respective
Payroll Unit, who would recover the amount and transfer it
along with monthly contribution on monthly basis. A
Member may also repay its loan prematurely to the Trust
upon which the amount would be credited to his/her
account on realization of funds.

Authority to sanction: Incharge Trust Secretariat (OG-3 or above)

Documents required: Application in the prescribed format (Form: NCPF-1 and

NCPF-2)

Procedure: i. Scrutiny of application by Trust Secretariat.

ii. Case processing for approval/grant of Advance.
iii. Payment through cheque from the Fund’s account or
direct transfer to the bank account of the Member.

Period Limitation: No limitation about number of times for availing the

Temporary Advance. The outstanding balance of advance
can be refunded by a Member at any time.

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 Interest/Return: The loan from NCPF would be given on interest free basis.
Any outstanding balance against the loan would not be
eligible to earn profit from the Trust. The balance amount of
fund available in the account of Member, after netting off the
outstanding loan amount and any other payment in
accordance with the rules and regulations of the Trust,
would, however, be eligible for profit on pro-rata basis.

5.2. Employees working at Field offices will apply in the prescribed format (Form:
NCPF-1 and NCPF-2) and submit the form to their Staff Matters Unit (SMU). SMU
will forward the case to Trust Secretariat at HOK.
5.3. i Non Refundable Advance from NCPF
Eligibility: All Members of the Fund may apply for the Advance subject to
NCPF Regulation 11.1
Advance Limit: An amount up to 80% of member’s own contribution

Recovery Period: No recovery of the advance shall be made

Authority to sanction Secretary (ECPF Trust)/Joint Director/Sr. Joint Director

Documents required Application on the prescribed format (Form: NCPF-3), Zakat

Declaration form (CZ-50)
Procedure:  Scrutiny of application in Fund Section/Trust Secretariat.
 Case processing for approval/grant of Advance.
 Payment through cheque from the funds account maintained at
SBP-BSC, Bank Karachi or direct transfer to the bank account of
the member.
Period Limitation: A member can re-avail this advance with the Gap of at least two
years.
6. Insurance Policy against NCPF
6.1. The Members of NCPF shall be allowed financing for Life Insurance/Takaful
Policies from the NCPF account (own subscription only).
6.2. The Members of NCPF would be allowed to take/obtain life insurance policies/
Takaful policies through financing out of their respective NCPF account.
Financing of life insurance/Takaful policy/policies out of NCPF balance will be
purely private policy/policies. Member will be responsible for any losses
and/or risks attached with such an insurance/Takaful policy/policies. Bank or
Trust will not be responsible for any losses happened in any case.
6.3. During the service, a Member can hold maximum two life insurance/ Takaful
policies against his/her NCPF account. However, if an employee intends to change
its insurance/Takaful company/companies, he/she would be allowed to do so
subject to the surrender of funds received from pre-mature liquidation of
existing policy/policies to his/her NCPF account, and this amount should not be

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 less than actually paid for this/these insurance/Takaful policy/policies. In case of
any shortfall, Member will pay the difference to his/her NCPF account.
6.4. A Member intending to obtain insurance policy /Takaful policy against his/her
NCPF account would apply for the same to the Trust Secretariat (Form NCPF L-1
and L-2). The Secretariat would process the case and accord approval in
accordance with the parameters laid down in this document. The insurance /
Takaful policy/policies would be allowed for only state owned life insurance
companies or for life insurance/ Takaful company/companies with credit rating of
at least AA+. The approval would be allowed by Incharge Trust Secretariat. (OG-3 &
above).
6.5. Annual premium will not be allowed more than the annual contribution at the
time of granting permission for financing life insurance/Takaful policy/policies.
Balance must be sufficient to cover 2 (two) advance premiums of
insurance/Takaful policy/policies. No further withdrawal be allowed from own
contribution of NCPF balance in case of increase in premiums in future. If a Member
wants to pay the higher premiums than the permissible limits, he/she has to
finance the difference (between the original premium payable from his/her NCPF
account and increased premium agreed with the insurance company/companies)
from his/her own resources, and continue to do so in future as well. Trust
Secretariat will not be responsible for its administration, monitoring and
consequences, if any.
6.6. The insurance/ Takaful policy/policies would be assigned in favor of the Bank on
prescribed Form (Form NCPF L-3) and would be released at the time of separation
of employee from Bank’s service subject to his/ her clearing of all outstanding
liabilities, if any, of the Bank or the Trust. Policy/policies must be registered with
the Insurance Company (Form NCPF L-3).
6.7. During the continuity of the service of the Member with SBP BSC, the value of
matured insurance/ Takaful policy/policies would be surrendered in favour of
the Trust and would be credited to the NCPF account of the Member. Similarly,
the amount received by way of pre- mature surrender of insurance
policy/policies would also be credited to the Member’s NCPF account.
6.8. The payments made by Trust from the Member’s NCPF account towards premiums
of insurance / Takaful policy/policies would not be eligible for distributable profits
of the fund. However, the balance amount available with the fund on daily
product basis would be eligible for profit on pro-rata basis.
6.9. The insurance/Takaful policy/policies must mature at least one year before the
date of retirement of Member.
6.10. Policy/policies must be assigned in favour of the Bank on prescribed form. (Form
NCPF L-3).
6.11. No increase/decrease in amount of sum insured and amount of premiums will be
allowed once permission granted for financing life Insurance/Takaful
policy/policies to the Member.
6.12. The Member who wishes to finance life insurance policy/policies out of his/her

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 own NCPF balance has to submit NCPF Form L-1 with supporting letter of
acceptance issued from Insurance/Takaful Company/Companies. The request will
be scrutinized in Trust Secretariat and a permission letter will be issued to the
concerned Member whether he/she is eligible or not to finance life insurance/
Takaful policy/policies out of his/her own Contribution of NCPF balance.
6.13. On receipt of permission from Trust Secretariat, Member has to submit original
life Insurance/Takaful Policy/Policies duly assigned in favour of Bank and
registered with Insurance/Takaful Company/Companies along with Form NCPF L-
2. If amount of premium is paid by the Member from his/her own resources then
the same will be reimbursed to him on submitting stamped receipt issued from
insurance company otherwise premium amount will be paid to insurance/Takaful
company/companies directly.
6.14. No part payment of premium against Insurance/Takaful policy/policies will be
allowed.
6.15. No back dated policy will be allowed.
6.16. Member will also be held responsible to take care, time to time, of his/her
policy/policies regarding payment of premium or otherwise.
6.17. No further amount will be allowed to withdraw from NCPF own balance for
payment of late fee, revival of policy in any case.
6.18. Premium payment mode will be on yearly basis, no monthly/quarterly/half yearly
payment will be allowed.
6.19. Trust Secretariat will make payment of premium to respective
Insurance/Takaful Company/Companies on monthly basis on behalf of the Member
concerned by debiting his/her own balance of NCPF.
6.20. In case a Member financing life insurance policy/policies out of NCPF balance
resigned or in case of early retirement from the service his/her policy/policies
will be re-assigned in his/her favour and handed over to Member concerned after
adjustment of liabilities.(Form NCPF L-4).
6.21. If a Member is terminated from the service due to any reason, and if he/she has
outstanding dues to the Bank that he/she fails to settle or fails to settle within the
time limits intimated by the Bank, his/her policy/policies would be surrendered in
terms of Clause 20 and 32 of NCPF Regulations. The amount collected from the
insurance company/companies will be credited to his/her NCPF account and the
said amount will be adjusted against Bank’s dues without his/her prior consent.
7. Payment of the Fund at End of Employment

7.1. The balance of the monthly contributions and the profit/return earned thereon
will be paid to the Member at the end of service in SBP BSC subject to conditions as
provided under regulation of the Trust Deed and Regulations of the Fund. The
amount in the Fund Account of the Member may consist of the Initial Contribution,
monthly contribution made by the Bank and Member along with the profit earned
thereon shall be payable on cessation of employment

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 (retirement/termination/resignation/retrenchment or death). Remaining balance
amount, if any, will be payable to the Member after annual audit of the accounts.

Eligibility for Any Members of the Fund that ceased to be in the employment
Encashment: of the Bank or his declared nominees/beneficiaries may collect
the amount.

Authority to Incharge Trust Secretariat (OG-3 & above)

Allow:

Documents Application in the prescribed format (Form NCPF Final A1, A2 and
Required: A3 as the case may be)
Declaration of Zakat (CZ-50)

Procedure: i. Scrutiny of application by Trust Secretariat.

ii. Case processing for allowing payment of the fund amount.
iii. Payment of outstanding amount available to the credit of the
Member’s NCPF account to the Trust Secretariat either
through cheque or any other mode of transfer of funds for
onward payment to the Member/ beneficiary. Audit from
Internal Monitoring Unit (IMU) shall be conducted.
7.2. In case a Member of the Fund expires during service, the balance of his/her own
and Bank contribution towards the Fund along with profit/return will be paid to
his/her nominee declared with the Bank as per the provision of Regulation 13 of
the Fund.
7.3. The available balance in NCPF account of the Member would usually not reflect
the audited position of the Member’s account. In order to make this transaction
smooth, the first payment to be made to the Member through SBP BSC would
consist of 90% of the balance outstanding at the time of retirement / separation
date to those Members who opted for investment of their funds in either interest
bearing or Sharia compliant instruments. The balance amount of Member’s
account would be paid after the annual audit of the NCPF accounts. However,
100% of the outstanding balance will be paid to those Members who opted for
not investing their funds in either interest bearing or Sharia compliant instruments.
7.4. Any Member on dismissal from the service of the Bank consequent to misconduct
resulting in financial loss to the Bank shall be paid only the aggregate amount
standing to the credit of such Member in the Member’s Account after satisfaction
of the Bank’s claims under Regulation 20. In every such case the Trustees shall
pay to the Bank the amount of its claim under Regulation 20 on demand.
7.5. Payment of the Fund shall be made in or /outside Pakistan subject to deduction
of transfer charges.

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8. Accounting Policies and Income Tax on Payments from NCPF Accounts
8.1. The Trust has adopted International Accounting Standard No. 26: Accounting and
Reporting by the Retirement Benefits Plans (Standard). A main account of NCPF
will consists of sub- accounts of Members in three main categories. These are: (1)
Members who opted to invest in interest bearing instruments, (2) Members who
opted to invest in Sharia compliant instruments and (3) Members who do not want
to invest their funds.
8.2. Presently, payments from NCPF accounts are exempted from income tax.
However, contemporary income tax laws at the time of payments from Fund
account will be applicable.
Note:
The SOPs are subject to change with the approval of Trustees.
The SOPs are consistent with the NCPF Regulations. NCPF Regulations will have an
overriding effect
_______________________

iSection of SOP (5.3) for non refundable advance was inserted by Trustees vide Agenda No.
VI of Combined Meeting of Trustees held on February 22, 2018.

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