49186543 Arslan Hbl Report

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February 21, 2011 [HABIB BANK LIMITED:]

Report on

Internship AT HABIBBANK limited

FromARSLAN AHMED BHUTTO

IQRA UNIVERSITY

ACKNOWLEDGEMENT

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No one can say that I am perfect, everyone should admit that

without the help of ALLAH and His people a man cant get anything

so I bow my head before Almighty Allah with gratitude. I am also

very much thankful and presents salute to many individuals who

have helped me in shaping this report. I am also very much thankful

to lot of former fellows and contemporary colleagues who took the

time and trouble during the last few days to speak to me about the

way this text could be further improved. I have no words to express

my gratitude to my advisor Mr. Kashif Ullah Khan for his intellectual

guidance without which it could have been rather difficult for me to

complete this report.

I am also very thankful to the staff Habib Bank Limited

KHEKASHAN branch especially to Mr. Akbar Ali (Branch Manager)

who provided me an opportunity to work in friendly environment.

It was an honor for me to work with:

Mr. Kashif ullah Khan (Operations Manager)

Mr. Syed Muhammad Hafeez Ullah (Assitant Manager)

Mr. Noman Ashraf(Retail BankingOfficer)

Mr. Imran Hamdani (Head cash Department)

Table of Contents

No. Description Page No.

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01 Executive Summary 05 to 06

02 Evolution of Banking 07

03 Commercial Banking in Pakistan 08 to 10

History of Banking in Pakistan04 About HBL Pakistan 10 to 19

History and Background

Privatization

HBLs Mission, Vision and values

Board of Directors

Management

Corporate information

05 SWOT Analysis 20

06 Operations of HBL 25 to 57

Banking Departments in HBL

Products and services of HBL

07 Learning and Duties as an Intern 58 to 64

Foreign Exchange Department

Bills clearing Department

Credit Department

Account, lockers, ATM Department

Assignments

Impact on my Career

08 Award and Financial performance in 2008 63 to 73

09 Recommendations 74

10 Glossary, Bibliography, Index 76 to 80

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executive summaryEvery student of Bachelors in Business Administration at IQRA UNIVERSITY

has an essential requirement to do internship in any of the well reputed

organization. The purpose of this program is to acquaint the students with

practical applications of theoretical concepts taught to them during conduct

of their BBA program. The internship in Habib Bank was a nice opportunity

to have a close comparison of theoretical concept in practical field,involving the use of primary and secondary data. All the efforts on the way

are summarized in shape of this Internship Report.

Report starts with the topic evolution of banking. The word 'Bank' is said to

have been derived from the words Bancus or Banque or Bank. This history

of banking is traced to as early as 2000 B.C. Talking about commercial

banking in Pakistan It was very difficult for Pakistan to build up its own

Banking system immediately after independence without sufficient

resources. By 30th June 1948 the number of schedule banks in Pakistan

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declined from mere scratch. Today there are more than 7000 branches of

commercial banks along with an established network of supplementary

financial institutions. All this development in the banking sector is the result

of untiring efforts of six decades. HBL was the first commercial bank to be

established in Pakistan in 1947. Over the years, HBL has grown its branch

network and become the largest private sector bank with over 1,450

branches across the country and a customer base exceeding five million

relationships.

On December 29, 2003 Pakistan's Privatization Commission announced that

the Government of Pakistan had formally granted the Aga Khan Fund for

Economic Development (AKFED) rights to 51% of the shareholding in HBL,against an investment of PKR 22.409 billion (USD 389 million). This report

contains information about HBLs board of directors, management, mission,

vision and values. HBLs operations are discussed in light of its working

department in the branches like cash, clearing, foreign exchange and

accounts department and also in light of its services and products which it

is offering to customers whether they are individual, business, corporate or

agriculture field related customers. HBL is currently offering phone banking,internet banking and various cash management services for the facilitation

of its customers. HBLs car to car loan has its own uniqueness in Pakistans

banking sector. HBLs branch network is extended all over the Pakistan

which has its competitive edge over all other private sector banks in

Pakistan.

During the time of my internship in Habib Bank Khekashan Branch Karachi,

I got the chance to work in all the departments of HBL working there.

Duties and learning in each department is given in this report. Talking

about financial performance of the bank in 2010 all the financial indicators

are showing positive results when the financial performance of the bank in

2010 is compared with financial performance of 2009. During 2010 HBL

also won some awards. At the end of this report I have given my suggestion

for the improvement of the bank.

I had been assigned to several departments to learn and experience the

working of branch banking and on the basis of grasped knowledge and

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experience, this report is being presented to the management of Habib

Bank Limited.

Evolution of bankingThe word 'Bank' is said to have been derived from the words Bancus or

Banque or Bank. This history of banking is traced to as early as 2000 B.C.

The priests in Greece used to keep money and valuables of the people in

temples. These priests thus acted as financial agents. The origin of banking

is also traced to early goldsmiths. They used to keep strong safes for

storing the money and valuables of the people. The persons who had

surplus money found it safe and convenient of deposit their valuables with

them. The first stage in the development of modern banking, thus, was the

accepting of deposits of cash from those persons who had surplus money

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with them.

The goldsmiths used to issue receipts for the money deposited with them.

These receipts began to pass from hand to hand in settlement of

transactions because people had confidence in the integrity and solvency ofgoldsmiths. When it was found that these receipts were fully accepted in

payment of debts; then the receipts were drawn in such a way that it

entitled any holder to claim the specified amount of money from

goldsmiths. A depositor who is to make the payments may now get the

money in cash from goldsmiths or pay over the receipt to the creditor.

These receipts were the earlier bank notes. The second stage in the

development of banking thus was the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited

money with them do not come to withdraw their funds in cash. They found

that only a few persons presented the receipts for encashment during a

given period of time. They also found that most of the money deposited

with them was lying idle. At the same time; they found that they were being

constantly requested for loan on good security. They thought it profitable to

lend at least some of the money deposited with them to the needy persons.

This proved quite a profitable business for the_ goldsmiths. They instead of

charging safe keeping charges from the depositors began to give them

interest on the money deposited with them. This was the third stage in the

development of banking.

COMMERCIAL BANKING INPAKISTAN

It was very difficult for Pakistan to build up its own Banking system

immediately after independence without sufficient resources. Following theannouncement of the partition plan in June 1947 there was a haste

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movement on the parts of banks to transfer their funds and accounts across

the borders. The banks having their registered offices in Pakistan were

transferred to India. In an effort to bring about the collapse of the new state

by the persecuting an international policy of withdrawal, the Indian bank

offices closed quickly. Those banks, which stayed, were considering the

winding up of their business. By 30th June 1948 the number of schedule

banks in Pakistan declined from mere scratch.

Today there are more than 7000 branches of commercial banks along with

an established network of supplementary financial institutions. All this

development in the banking sector is the result of untiring efforts of four

decades.

History of Banking In Pakistan

The interesting point which I observed during the span of mine internship

was the historical background of Banking & Financial sector which is the

one in which great improvement and growth is observed since the

formation of Pakistan. For studying the growth of this sector we can divide

it into three stages, which are as follows:

a) Pre-Nationalization Era

b) Nationalization Era

c) Post Nationalization Era

PRE NATIONALIZATION ERA:

There were only two Muslim banks in Indo Pak before partition; they

were .Habib Bank Ltd. (est. in 1941 at Bombay) & Australia Bank Ltd. (est.

In 1944 at Lahore). All other banks, at that time, were either owned by

Hindus or Foreigners.

At the time of partition there were 631 bank branches in area which came

under Pakistani control. But due to blood shed and violence at large scale,

mostly branches were closed and the disparity can be assessed from the

fact that on July 1948 there were 195 branches with deposits of Rs.88

million only.

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Also a factor lagging in Pakistani industry was a central bank of its own, by

that time Reserve Bank of India was acting as central bank for both

countries and same currency notes were used in both territories. But

Reserve Bank of India was biased and Set down Pakistan on many

occasions such as the issue of funds transfer etc.

1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.

2) Setting up of National Bank of Pakistan in November, 1949 tocontrol the 'jute' export in East Pakistan and to act as agent ofSBP.

3) Larger powers were given to SBP through SBP Act (1956) forcontrolling purposes.

4) Banking Companies Ordinance 1962 for protection and guidanceto banks.

5) Establishment of specialized banks, such as ADBP (1952);

a) HBFC (Nov, 1952);

b) P1CIC (Oct, 1957)

c) IDBP (Aug. 1961);

d) NDFC (Jan, 1973).

These were the steps, which built a strong banking sector in Pakistan. Thisis also obvious from the facts that by 1973 there were almost 10 foreign

banks were working in Pakistan and all over deposit position was around

Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given

below:

BANK POSITION IN 1973

BANK NO. OF BRANCHES DEPOSITS

(Rs in Million)

HBL 667 6,160

NBP 579 5,660

UBL 497 5,670

MCB 506 1,640

ABL 145 570

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B) NATIONALIZATION ERA

On January 01, 1974 all Pakistani banks were nationalized through

Nationalization Act 1974. Under this law all Pakistani banks became a public

property. All small banks were merged in bigger banks to create 5 major

Pakistani banks Pakistani banks. These banks were to control by Pakistan

Banking Council. There are still controversies about this act of government

as whether it contributed in success of failure of banks. However the major

changes after nationalization were as follows:

Working of banks was extended to under developed areas.

Market expansion for credit and deposits.

Decrease in service level of bank officers.

Decrease in profitability as well.

However the effect of expansion was enormous and it can also be depicted

with the help of table 2 which shows the deposit & branch positions of

different nationalized banks.

BANK POSITION IN 1992

Bank No. of

Branches

Deposits (Rs. In

Millions)HBL 1926 153,431

NBP 1448 128,679

UBL 1684 87,482

MCB 1288 50,013

ABL 750 33,757

TOTAL 7096 453,362

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Structure of Financial Sector in Pakistan

Scheduled Banks

(47)

- Commercial banks

- Specialised banks

BFIs

- Modarabas

- Leasing companies

- Mutual funds

- Specialised financial (DFIs)

- Investment banks

- Housing Finance Companies

Speci alised Banks Commercial Banks

Foreign Banks Domestic Banks


C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the nationalized

institutes. Some was also suggested in banking sector. For this purpose,

amendments were made to Nationalization Act 1974 and two nationalized

banks were privatized. Along with this a permission to open banks in private

sector was also granted. The rules regarding establishment of new banks

and for incoming foreign banks were also relaxed.

The- privatized banks are;

a) MCB taken up by a private group in April, 1991

b) ABL taken up by its own employees in September, 1991.

c) UBL taken up by UAE party in 2002.

d) December 29, 2003 HBL was taken by AKFED

After these changes a large number of private and foreign banks

started their operations in Pakistan and the present status can be seen

from the following figure:

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AboutHabib Bank Limited

HBL was the first commercial bank to be established in Pakistan in 1947.

Over the years, HBL has grown its branch network and become the largest

private sector bank with over 1,450 branches across the country and a

customer base exceeding five million relationships. With a presence in 25

countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria,

Kenya and Kyrgyztan and representative offices in Iran and China, HBL is

also the largest domestic multinational. The Bank is expanding its presence

in principal international markets including the UK, UAE, South and Central

Asia, Africa and the Far East. Key areas of operations encompass product

offerings and services in Retail Banking. HBL has the largest Corporate

Banking portfolio in Pakistan with an active Investment Banking arm. SME

and Agriculture lending programmes and banking services are offered in

urban and rural centers. In the UK and GCC, HBL focuses on trade finance

and remittances for the South Asian Diaspora in addition to basic banking

facilities. HBL has always been a bank and a brand for the masses, with a

history that is inextricably linked with the history of Pakistan itself. As it

continues to grow, both locally and abroad, it strives to embody its brand

personality: honest, approachable, and inclusive. HBL is currently rated

AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to

raise Tier II Capital from external sources.

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*Rating given by JCR-VIS

HISTORY AND BACKGROUND

Habib Bank Limited was established by Mr. Ismail Habib (Late) on August

25, 1942 at Bombay. It was the first Muslim Bank of the sub-continent. It

was established with a paid up capital of Rs. 2.5 million. At an early stage,

the number of its branches was only 12.

HBL established operations in Pakistan in 1947 and moved its head office to

Karachi. Our first international branch was established in Colombo, Sri

Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the

banks 25th Anniversary. With a domestic market share of over 40%, HBL

was nationalized in 1974 and it continued to dominate the commercial

banking sector with a major market share in inward foreign remittances

(55%) and loans to small industries, traders and farmers. International

operations were expanded to include the USA, Singapore, Oman, Belgium,

Seychelles and Maldives and the Netherlands.

PRIVATIZATION OF HABIB BANK

On December 29, 2003 Pakistan's Privatization Commission announced that

the Government of Pakistan had formally granted the Aga Khan Fund for

Economic Development (AKFED) rights to 51% of the shareholding in HBL,

against an investment of PKR 22.409 billion (USD 389 million). On February

26, 2004, management control was handed over to AKFED. The Board of

Directors was reconstituted to have four AKFED nominees, including the

Chairman and the President/CEO and three Government of Pakistan

nominees.

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VISION, MISSION AND VALUES

VisionEnabling people to advance with confidence and

success.

MissionTo make our customers prosper, our staff excel and

create value for shareholders.

ValuesOur values are the fundamental principles that define our culture and are

brought to life in our attitude and behaviors. It is these values that make us

unique and unmistakable. Our values are defined below:

ExcellenceThis is at the core of everything we do. The markets in which we operate

are becoming increasingly competitive, giving our customers an abundance

of choice. Only through being the very best in terms of the service we

offer, our products and premises - can we hope to be successful and grow.

IntegrityWe are the leading bank in Pakistan and our success depends upon trust.

Our customers - and society in general expect us to possess and

steadfastly adhere to high moral principles and professional standards.

Customer FocusWe understand fully the needs of our customers and adapt our products

and services to meet these. We always strive to put the satisfaction of our

customers first.

Meritocracy

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We believe in giving opportunities and advantages to our employees on the

basis of their ability. We believe in rewarding achievement and in providing

first-class career opportunities for all.

ProgressivenessWe believe in the advancement of society through the adoption of

enlightened working practices, innovative new products and processes and

a spirit of enterprise.

Board of Directors

Head Office

HBL Plaza

I. I. Chundrigar RoadKarachi-75650,Pakistan.Tel : +92 (21) 2418000[50 lines]Fax : +92 (21) 9217511

Registered Office4th Floor, Habib Bank

TowerJinnah AvenueIslamabad, Pakistan.

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NAME DESIGNATION

Sultan Ali Allana CHAIRMAN

R. Zakir Mahmood PRESIDENT & C.E.O

Mushtaq Malik DIRECTOR

Ahmed Jawad DIRECTOR

Yasin Malik DIRECTOR

Moez Jamal DIRECTOR


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Tel: +92 (51) 2872203Fax: +92 (51) 2872205

Registrars

THK Associates (Pvt.) Ltd.Ground Floor, State Life Bldg No. 3Dr. Ziauddin Ahmed RoadKarachi, Pakistan.Tel: +92 (21) 111-000-322

WebsitesCorporate website:www.hbl.com

Treasury website:www.hblgtr.com.pkEbank (internet banking):www.hblebank.com

AuditorsKPMG Taseer Hadi & Co.Chartered Accountants

GLOBAL LOCATION

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http://www.hblebank.com/http://www.hblebank.com/


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SWOT ANALYSIS

Strengths

Strength can be defined as an area where a company is best at doing

something or a feature that puts the company at an advantage in

comparison to its competitors. HBL enjoys the following strengths:

HABIB BANK is a well established bank enjoying long history of over 65

years of experience and profitable operation.

HBL is the largest private bank in Pakistan now and people trust is very

high.

It has the largest branch network among private banks of Pakistan.

HBL has been very effective in controlling costs as it successfully

restructured itself after its privatization. During this process more than

1,600 employees were relieved under a golden handshake scheme and

110 branches were closed.

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Excellent branches appearance gives an edge to HBL over other banks.

The branches are well furnished even in less developed areas where

other banks branches give a poor view.

HBL has the ability to bring innovative products and services likepersonalized service, electronic funds Transfer, sophisticated financial

products such as electronic banking, auto-teller machines and evening

banking.

The Banks Rupee Traveler Cheques have been market leaders for the

past six years.

HBLs car to car financing scheme is unique in auto loan segment.

Habib bank is an internationally recognized name in banking servicesand products.

HBL has forged strategic alliances with international banks for expanding

its network further, both locally and internationally.

Weaknesses

A weakness is defined as an area in an organization where the organization

is not as good at doing something as its competitors or a thing which an

organization lacks thus putting the organization at disadvantage in

comparison to its competitors. Based on the above definition, HBL has the

following weaknesses.

Lack of communication between bank and customers about terms and

condition of products and services. Like centralization of cheque book

issuing process.

Employees at branch level are not properly motivated to work by heart.

They take the all routine activities as a boring job.

Most of the employees lack managerial training as they are not properly

educated. Due to seniority, they have moved up on the hierarchy line to

Grade-I, II or III positions having hardly bachelor degrees. This type of

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senior staff cannot apply the modern and innovative techniques of

management in decision making.

Mission of HBL is not well defined.

Though HBL is second largest bank in Pakistan, yet the fact remains that

it is not market leader as NBP. Its total assets are always less than NBP

total assets.

Now as it is a privatize bank that is why GOVERNAMENT support to HBL

decreased as it was in past

Opportunities

An opportunity can be defined as a change in external environment which if

properly exploited with the organizational strengths will result in enhanced

sales, market share, or income. Using its strengths, HBL can avail the

following opportunities. Opportunities require explanation therefore I have

used headings instead of arrows

E-BankingGenerally speaking, three factors, quickness, easiness and cheapness have

become the catchwords for the competitiveness and usefulness of all the

business operations. Particularly it is commonplace today to say that

banking is undergoing a radical transformation. The symptoms are new

products, new players, new channels etc. This transformation is taking

place across all sectors of the banking industry. That is why Habib bank

urgently needs to improve their ability, to think strategically about IT

investments. Only those banks that use their technology resources

effectively have the opportunity to secure real competitive advantage in

this fast-changing industry through real product or service differentiation.

High mark up ratesOf late markup rates have increased considerably. Present rates are 4%

above KIBOR i.e. 16% appx. High markup rate has decreased the interest of

people in loaning from from banks. Habib bank can increase its income by

offering loan at lower interest rate than other banks.

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ONLINE BANKINGIt is doing banking transactions through our home P.C. The banks that do

business through net have Websites. The customer clicks into the Website

and gets the history of the bank. Then he can demand the necessary

application form through the net. He fills in the form and passes it on to the

bank. The Online banking is fast gaining ground in Pakistan. Some software

companies are also offering network-banking facilities. So Habib bank

should focus heavily on providing online banking faculties to its customers.

Currently it is doing the same.

CORPORATE BANKING TERMINAL (CBT)Large corporate customers can log into the bank's database and have

access to their accounts/transactions from their business houses. This

facility has still not been started for customers in Pakistan. So Habib can

focus on that.

AUTOMATIC TELLER MACHINE (ATM)

This system is known as "Any Time Money" because it allows customerswho have an ATM card to withdraw money at any time from the bank

without interacting with human teller. Since the ATM machine can be

installed anywhere like petrol bunks, markets, railway stations etc, and can

well be linked to the main computer. It allows customers to transact with

the bank 24 hours a day and 365 days a year. They allow the customers to

transfer money to and from accounts to view account information, to

receive cash. It can also be used to deposit cheques and cash into theaccounts. No bank in Pakistan is offering this service currently. So an

opportunity exists for Habib bank to differentiate.

Rate of return

The range and choice of products available & offered by the commercialbanks is limited. Rates of Return / Profits on Deposits are so low and

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unattractive that very limited options are available to the depositors. They

do not match the current rate of inflation. HBL differentiate and increase its

deposit by offering attractive rate of return on deposits.

Threats

Threat can be defined as a change in external environment which if not met

with proper strategies will result in loss of revenues, market share, or

income. In the context of HBLs external environment, the following

potential threats exist:

Other private commercial bank with sound profitability is also a threat to

HBL e.g. UBL, Alfalah, MCB etc

The Rupee Travelers Cheque (RTC) sales volumes may be affected on

account of regulatory restriction imposed by SBP on issuance of large

value denominations.

For the last of 2 to 3 years, Pakistan is facing economic and political

instability which is a big threat.

Foreign banks are flourishing in field of consumer financing.

Afghan war and Iraq war has a deep effect on the economy of Pakistan,

which has affected HBL.

Increased regulations from State Bank of Pakistan may affect its

business.

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BANKING DEPARTMENTS of HABIBBANK

Various departments are working in all the branches of Habib bank to

facilitate the customers. Following are the banking departments functioning

in HBL Jinnah Chowk branch Sahiwal.

1. ACCOUNT OPENING DEPARTMENT.

2. CASH DEPARTMENT.

3. CREDIT DEPARTMENT.

4. LOCKERS DEPARTMENT.

5. BILL CLEARING DEPARTMENT.

6. FOREIGN EXCHANGE DEPARTMENT.

7. I.T DEPARTMENT.

Accounts opening department

Basic function of the accounts department is to open new account and

facilitate the customer for the account opening purpose. There are certain

formalities which are to be observed for opening of an account with a Bank.These formalities in brief are as under:

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FORMAL APPLICATION:

The customer is to fill "Account Opening Form. It is a formal request by a

customer to the bank to allow him to have and operate the account.Documents require for opening an account:

Copy of CNIC

Service certificate or student card.

Utility bill

Provisional receipt

KYC (Know Your Customer)

SPECIMEN SIGNATURE:

When the Banker is satisfied about the integrity of the customer, he agrees

to open the account. The Banker obtains the specimen signatures of the

customer on the signature book or on card.

Posting the account on the system:

After that officer has to post the new account on computer system for

further processing. During the process customer id and account number is

generated. New account remains active for one day after that it is blocked

by the head office until CNIC of the customer is verified from NADRA.

Cheque book issuing:

After the CNIC verification account opening officer has to issue a cheque

book to customer so that he can be able to make withdrawal from his

account. Now a day in Habib bank cheque book issuing process is

centralized that take 06 days to complete.

SECRECY:

The secrecy of depositors account is the. Responsibility of every official

engaged in the Bank service.

Types of accounts:Individual accounts:

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Individual accounts are the most common personal investment accounts.

Open by single person.

Join Account:

A joint account occurs when two or more than two customers have one

account. The parties to a joint account are considered in law as they are

one person.

Business accounts:

Business accounts can be opened by institutions, companies, partnerships,

trusts and non-profit organizations. Following documents are required.

BOOKS RELATING TO CUSTOMERS:

Pay-in-Slip

When money is to be deposited in the bank the pay in slip is to be filled.

The object of this book is to provide the customer with the banks

acknowledgement for receipt of money to be credited his account.

Cheque Book

A chequebook contains a number of cheques, which is given to a customer

upon written request and after marking the payment for the chequebook. It

enables a customer to make withdrawal from his account or make payment

to various parties by issue of cheques.

GROUNDS FOR CLOSING THE CUSTOMERS ACCOUNT:

The banker may close the account of the customer due to following

reasons:

i. Notice by a Customer

ii. Death of a Customer

iii. Customers Insanity

iv. By order of court

I) NOTICE BY CUSTOMER

The banker closes the account of the customer on the application of the

customer for closing his account.

II) DEATH OF CUSTOMER

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On death of his customer, the bank must stop payment on cheques drawn

on him by the deceased customer because the death revokes his authority

to pay such cheque. The heirs or the executors of the deceased customer

are not authorized to operate on the account; it can act only in accordance

with provisions mentioned in the letter of probate issued by a competent

courts.

III) CUSTOMERS INSANITY

If the customer becomes insane or mental it terminates the bankers

authority to act as his customers agent. Since the banker customer

relationship comes to end, in such as situation, it is usually considered that

the bankers authority to pay his customers cheques is revoked by noticeof insanity. However, the bankers treat their customers as it unless a fairly

inclusive evidence of the customers insanity is availableto them.

IV) ORDER OF COURT

A court of law may serve a banker with an order in garnish proceeding in

execution of a decree prohibiting him from honoring a customers cheques.

Cash Department

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ash Department is very sensitive and risky part of the bank. Very

causations and competent personnel are needed for the Job. HBL

has really such a diligent staff with appreciable competencies and

will to do work. Main function of cash department is to deal with cash

payment and cash receipts.

C

Cash deposit procedure:

The customer fills the pay slip. The cashier receives the pay slip and cash.

He counts the cash and makes the detail of the notes at the back of the pay

slip. Then he compares the detail with amount written on slip and signs the

pay Slip. Then he credits the entries in the computer by serial No, accounttype, Account number and amount. Puts the stamp of the Cash Received

on the payment slip. The first portion is for bank record while other one is

given to the customer.

Cash payments procedure:

When a customer comes to withdraw a certain amount from his account, he

brings a Cheque along with him. In this case the following steps are taken.

The cashier receives the cheque and checks it whether it is post dated or

predated. Cheque can be cashed within six months. A predated cheque

cannot be cashed. He takes two signatures at the back of the cheque from

the bearer. He gives the cheque for posting at the computer. The computer

checks out whether there is balance in the account or not. Other

instructions are also received e.g. blocked, frozen, Etc. the posting is done

in the computer and the cheque is stamped posted with the serial number

and date. He gives the cash to bearer and the respected account is debited.

Online fund transfer:

Another function of the cash department is of online transfer of funds.

Customer has give filled remittances form with cash or without cash (from

account transfer) to the cashier in cash department who will then credits

the beneficiary account.

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Balancing cash at the end and transferring excess cash:

At the day end cash department is responsible for balancing the cash.

Physical cash should be balanced with the amount in the computer. Jinnah

Chowk branchs limit for cash is 40 million which it can keep within thebranch over the night excess cash is transferred to NBP.

Credit Department1. Introduction

2. Securities.

3. Types of credits

INTRODUCTION

The function of credit department is to lend money in the form of clean

advances, against promissory notes, as well as secured advances against

tangible and marketable securities. The bankers prefer such securities that

do not run the risk of general depreciation due to market fluctuations.

Common Securities for the bankers advances are as under:-

SECURITIES

1. Guarantees

When an application for advance cannot offer any tangible security, the

banker may rely on personal guarantees to protect himself against loss on

advances or overdraft to the applicant.

2. Mortgage

A mortgage is the transfer of an interest in specific immovable property for

the purpose of security the payment of money advanced or to be advanced

by way of loan, and existing or future debt, or the performance of an

engagement which may rise to a pecuniary liability. The transfer is called a

mortgagor, the transferee a mortgage.

3. Hypothecation

When property in the shape of goods is charged as security for a loan form

the bank the ownership and possession is left with the borrower, the goodsare said to be Hypothecated The essence of hypothecation is that neither

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the property in the goods not the possession of them are possession is left

with the borrower, the goods are said to be Hypothecated the essence of

hypothecation is that neither the property in the goods not the possession

of them are possessed by the lender, but the security is granted by means

of letter of hypothecation, which usually provides for a bankers charge on

the hypothecation goods.

4. Pledge

In a pledge the ownership remains with pledge, but the pledge has the

exclusive possession of property until the advance is repaid in full. While in

case of the default the pledge has the power of sale after giving the due

notice.

5. Promissory Note

Sometimes promissory note is also accepted as a security, "A promissory

note is an instruments in writing containing an unconditional undertaking

signed by the maker, to pay on demand or at a fixed or determinable future

time a certain sum of money only, to or to the order of certain persons, or

to the bearer or the instrument." A promissory note is incomplete until has

been delivered to payee or the bearer. Moreover, the sum promised in a

promissory note may be made by two or more makers who may be liable

there on jointly and severally.

TYPES OF ADVANCES

The advances which are given by Habib Bank Limited are as under:-

1. DEMAND FINANCE (Ordinary Loan)

Demand Finances are those advances which are allowed in lump sum for a

fixed period and are repayable lump sum or gradually in installments.

TYPES OF ADVANCES

a. Demand Finance (Packing Credit)

Scheme introduced by State Bank of Pakistan for exporter of carpet,surgical instruments, at zero percent rate of interest. While banksprovides at concessional rate of interest.

b. Loan ordinary (Demand Finance to Students)

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Qarz-e-Hasana Scheme Loans are allowed to the students, teacherswithout any interest or mark up with the recommendations of theMPA or MNA.

c. Demand Finance (Staff)

Loans are offered to the staff of the following four categories.i. House Building Loans against mortgage of property.

ii. Loan for purchasing vehicles.

iii. Loan equivalent to months salary.

2. RUNNING FINANCE (Overdraft)

Running finance (old name overdrafts) are advances, which are generally,

given to meet temporary requirements of the customers. A good customer

use the banks running finance limit as a mean of protecting his credit in the

market and as a line of security defense to meet his commitments.

TYPES OF RUNNING FINANCE

I. Unsecured

Under such type of overdraft the bank pay upon the personal security

of the customers mentioned on the customers account.

II. Secured

Under this type of overdraft the bank allows his customer to withdraw

more than his deposits after giving security against the amount

overdrawn.

The securities against which they given are:

i. Share certificate, Saving certificate

ii. Deposits

iii. Mortgage of property

iv. Guarantee of person

SMALL LOANS

Loan is allowed to contractors clearing and forwarding agents.

3. FINANCE AGAINST THE FOREIGN BILLS (FAFB)

The advance facility is allowed both to local foreign bills and isclassified as under:-

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i. FAFB (Local) advance against Railway receipts and truck receipt, acompany with bills of exchange and invoices, are given under thishead.

ii. FAFB (Foreign) advances against foreign bill, covering bills ofexchange bills of lading airway bills of exchange bills of ladingairways bills etc.

4. AGRICULTURE LOANS

Loans to the farmers with holding up to 25 acres for meeting their short

terms, medium and long terms Agricultural production requirements, such

as:

i. Agricultural inputsii. Tube wells

iii. Live Stock Framingiv. Land improvement

5. INDUSTRIAL LOANS

Besides the short-term loans which play a part in working capital medium

and long-term loans are also given to industrial sector for purchase of

machinery and other capital nature goods.

Bills Clearing Department

INTRODUCTION

Every bank acts in two way i.e.

i. Paying Bank

ii. Collecting Bank

Here in theory no legal obligation on a banker to collect cheques,

drawn up to other banks for a customer. It is, however, an important

function of crossed cheques. A large part of this work is carried out through

the N.I.F.T.

NIFT- National Institutional Facilitation Technologies (Pvt.) Limited:

NIFT is a joint venture between a consortium of six major banks and private

sector. It is responsible for the establishment and management of

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automated clearinghouse facilities in Pakistan. NIFT is proactively involved

in the modernization of payment systems in Pakistan.

FUNCTION OF CLEARING DEPARTMENT

The following are the main functions of clearing department.

1. To accept transfer deliveries and clearing cheques from the customer of

the branch and to arrange for their collection.

2. To arrange the payment of cheque drawn on the branch and given for

collection to any other branch of Habib Bank of Pakistan or any other

members, or sub-members of the local clearing area..

3. To collect amounts of cheques drawn on members, sub-members of the

local clearing house, sent for collection by those Habib Bank Limited,

branches which are not represented a the local clearing area.

PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENT

Whenever a customer wants to deposit cheque, etc, he fills a pay in slip and

hands it over the counter along with the instruments he wants to deposit

with bank. As far as possible, the customer desire that on of the staff

member fill in a slip for him, he should be obliged promptly.

One portion of the perforated pay in slip is handed over to the depositor

and the portion becomes the regular portion of a credit voucher

TYPES OF CHEQUES COLLECTED BY CLEARING DEPARTMENT

a. Transfer Cheques

Transfer cheques are those cheques, which are collected and paid by

the same branch of bank.

b. Transfer Delivery Cheques

Transfer Deliver cheques are those cheques, which are collected and

paid by two different branches of a bank, situated in the same city.

c. Clearing Cheques

Clearing cheques are those cheques in which the payee (Person who

deposit cheques for collection) and the drawer of a cheque maintain theaccount with different banks.

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These clearing instruments are handed over to NIFT after posting necessary

stamps and checking them for any errors. Then further process of clearing

is carried on the behalf of NIFT.

Forex Department

International trade is growing and with the development of international

trade it has become more imperative. For countries to devote more and

more attention to the complicated mechanism of Foreign Exchange. It is

more important in case of developing countries. It is need of time, that a

country should conserve its foreign exchange resources.

MEANING OF FOREIGN EXCHANGE

The foreign exchange term refers to the principles that determine the

rate of exchange. It covers following three senses:

i. The mechanism or system by which international obligations or

indebtedness are fulfilled.

ii. The currency of one country is exchanged for that of another.

iii. The principles on which the people of world settle their debts to oneanother.

Letter of Credit:

It is a negotiable instrument through which the bank of the exporter deals

with bank of the importer through the guarantee of a bank. There are

different parties involved in the L/C, e-g importer, exporter, importer bank,

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exporter bank, and advisory bank. LC involves banking channels in foreign

trade to mitigate risk.

The procedure of opening of an L/C is as follow

The first thing is the Performa invoice. The Performa invoice is adocument (say a clip), which is, sends by the exporter to the importer

and includes the information like. Descriptions of goods, what type of

goods you are needed and what are the quality, rate and originating

country etc.

Before to open a L/C the bank also consider that the goods which the

importer is importing is allowed by govt. of Pakistan or not. Because

the importer is not allowed to import that goods which are prohibitedby the Govt. of Pakistan.

The importer is asked to show the membership certificate of any

chamber of commerce and industry affiliated with the Pakistan

federation of chamber of commerce and industry.

Fill the import form of the govt. of Pakistan, which is the proof of this

that there is no objection on the goods, which the customer is

importing. What type of goods you are needed and what are the quality, rate

and originating country etc.

Necessary Documents required for L/C:

NTN

Tax Authority registration certificate

Chamber of Associations trade certificate

Type of Business

NIC

Margin

Registration No.

Application for L/C

On providing these documents the importer will be given the L/C form

named as

IB-8.

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Contents of IB 8

1. Request for LC

2. Rate

3. Importer and Exporters particulars

4. Amount

5. Terms

6. Partial Shipment (Allowed, not allowed)

7. Transshipment (Allowed, Not Allowed)

8. Port of Loading and destination

9. Payment Mode

I. Sight

On seeing the documents the importer has to pay.

II. At Sight and Negotiation:

It means that exporter will submit his documents with the bank and

immediately asks for payment.

III. Acceptance:

On showing the documents to the importer, the bank asks him to accept

that he will pay within 30, 60, 90, 120, 180 etc days.

10. Documents Required:

Certificate of Origin.

Commercial Invoice

Bill of Lading / Air way bill.

Charges:

For L/C following charges are applicable;

Commission

Postage

L/C Advising commission

L/C amendment Commission

L/C confirmation Commission

L/C Negotiation Commission

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Up to 5.35%* profit per annum

Profit calculated daily, paid every quarter

Minimum balance of Rs. 20,000

HBL DebitCard and Inter Branch Transaction System (IBTS) facilities

Up to 10 Bankers Cheques free (at minimum balance of Rs. 500,000)

Funds transfer to any bank through HBL PhoneBanking

Current Account


Unlimited transactions

Non-profit bearing



Basic Banking Account (BBA)

Can be opened with only Rs. 1,000

No minimum balance requirement

Upto 2 withdrawal and 2 deposit transactions free every month

Unlimited withdrawals through HBL DebitCard

Non-profit bearing

Savings Accounts

Avail the flexibility of making transactions while earning profit on

daily/monthly basis. HBL is currently offering five types of accounts in

savings account category. Their detail and name is as under.

1. HBL Value Account

2. PLS-Savings Account

3. Remittance Munafa Plus Savings Account

4. Daily Munafa Account

5. Daily Progressive Account

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HBL Value Account

7.19%* profit per annum

Profit calculated monthly, paid every quarter

Deposit ranges from Rs. 10,000 to Rs. 1,000,000

Two withdrawals free every month

PLS-Savings Account

5.06% profit per annum*

Profit paid bi-annually




Unlimited transactions

Remittance Munafa Plus Savings Account

Special account for receiving foreign remittances

5.12%* profit per annum

Profit paid every month


Daily Munafa Account

Profit calculated daily, paid every month

Up to 8.84% profit per annum*




Daily Progressive Account

Unique transactional account for Institutions

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Profit calculated daily, paid every month

Up to 11.57% profit per annum*

Inter Branch Transaction System (IBTS) facility



Terms Accounts

Invest your savings in HBL term deposits for a fixed duration and earn profit

while keeping your savings secure. HBL is currently offering one type of

account in terms account category. Their detail and name is as under.

1. HBL Advantage Account

Multiple options for tenure and profit payout

Loan facility up to 90% of investment

Minimum investment of Rs. 25,000

Withdrawal at end of fixed term

Foreign Currency Accounts

HBL offers Foreign Currency Accounts in multiple currencies as savings and

term accounts. Their detail is as under.

FC-SB

Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros)

and GBP (UK pound)

Tiered product, with rates depending on choice of currency

To earn profit, minimum balance in USD, EUR and GBP is 1,000

Interest is payable on a quarterly basis

38

TenureProfit at

maturity3 MONTHS 7.50%*

6MONTHS 8.00%*1 YEARS 11.00%*3 YEARS 13.00&*5 YEARS 14.00%*10 YEARS 17.00%*


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HYFFD (High Yield Foreign Currency Fixed Deposit)

Available in 1 month, 2 month, 3 month, 6 month and 12 Month in

USD, EUR and GBP

Tiered product, with rates depending on choice of currency and term

Profit paid on maturity only. No interim interest is payable.

*NOTE: All the rate and terms and condition are revised by HBL after

every six months periods. These rates are only applicable for period

01.07.09 to 31.12.09. Further detail of terms and conditions about profit

and rates is given in annex B.

HBL Car Loan

HBL Car Loan helps customers to get their preferred car through a

simple and hassle-free process, backed by superior service and support.

Now customer can drive a car he always wanted.

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Features

Choice of used, new local/imported and reconditioned imported car.

Repayment options ranging Upto 7 years.

Upto 85% of financing for the car of your choice.

Insurance at all times for complete peace of mind and security.

Round the clock support available through HBL PhoneBanking; you

can place your requests and queries, track the status of your

repayment/loan account and avail other value-added services

through HBL PhoneBanking.

Eligibility Criteria

How to apply

Just visit any HBL branch or Habib Bank Auto Finance Centre fordetails and application.

Submit complete set of application without any charges to the branch

or the Auto Center.

Sign the necessary documents on approval of the application

Payment is released within 24 hours of the submission of post-dated

cheques and initial payment after approval of the request.

Documentation

Salaried Individuals

Complete Application Form

Salary Certificate / Most recent Salary Slip

Bank Statement for past one year Two Copies of NIC

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Employment Certificate with date of joining

Two passport size photographs

Copy of the last paid utility bill (residence)

Self-Employed Business persons/Professionals


Two Copies of NIC


Letter of proprietorship / Registered Partnership Deed

Certified latest Form A and Form 29, where applicable, along with

articles and Memorandum of Association

Copy of last paid utility bill (residence)

Bank Statement for the last 1 year

HBL Car to Car

HBL CarToCar is a revolutionary car financing offer. It makes the car of

customer choice affordable and practical with a buy back guarantee. HBL

CarToCar offers matchless features and unique options at the end of the

lease. Now customer can drive a new car at the end of every two years.

Features

Pay only for what you use

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When customer lease a car under HBL CarToCar, he only pay for that part

of the cars value that he use during the lease term. The cars residual

value (forecasted for the end of the specific lease term) is agreed with him

at the start of the lease term. This amount is deducted from the car price

thus lowering the finance amount. This finance amount is based only on a

part of the cars value and not the full value of the car. Therefore, HBL

CarToCar offers very low installments as compared to any conventional

financing.

Upgrade of lifestyle

HBL gives customer the guarantee that if he wishes to return the car to HBL

at the end of the lease term, he will not have to pay off the cars residual

value. Instead, HBL will directly settle this outstanding liability for customer

under the buy back guarantee. Hence, he can upgrade to a new car as

frequently as two years without any complication and hassle.

Affordability

With HBL CarToCar, customer only has to pay the difference between the

car price and the pre-agreed residual value to the bank. As a result, the

monthly installment may even be 40% to 50% less than that of

conventional financing.

Flexibility

HBL CarToCar offers customers several choices at the end of the lease

term:

Upgrade - Simply return the car to HBL and drive a new one home

Walk away - Return the car to HBL and end the lease

Buy - Keep the same car. Just make a one-time settlement of the cars

residual value to HBL or pay the same in easy installments over a specified

extended period of time

Sell - Enjoy the gain from selling off the car at a higher price in the

market than what you ay HBL as the residual value

Eligibility Criteria

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Documentation

Salaried Individuals


Salary Certificate / Most recent Salary Slip

Bank Statement for past one year

Two Copies of NIC

Employment Certificate with date of joining


Copy of the last paid utility bill (residence)

Self-Employed Business persons/Professionals


Two Copies of NIC


Letter of proprietorship / Registered Partnership Deed

Certified latest Form A and Form 29, where applicable, along with

articles and Memorandum of Association

Copy of last paid utility bill (residence)

Bank Statement for the last 1 year

HBL Credit Card

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By the help of HBL credit card customer enters into the world of

convenience and flexibility. Accepted at over 29 million merchants

worldwide, HBL Credit Card makes shopping fun and paying simple. So that

a customer can make the most of his shopping experience.

BenefitsBuy now, pay laterBuy what customer want, when he want and pay for it later. A credit card

statement will be sent to him every month with details of all his purchases.

He will have 21 credit free days to make the payment from the statement

date. Customer should pay at least 3 days in advance if he makes your

payment by cheques to allow enough time for clearance.

Pay as much as customer wants

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A customer can pay the entire or as little as 5% of the outstanding balance

in his statement. The unpaid amount will be transferred to his next months

statement along with applicable services charges.

Cash advance

Customer can go to any specified HBL branch and withdraw cash at the

counter. He can also go to any 1Link ATM in Pakistan and more than

1,000,000 ATMs worldwide displaying the Visa/Plus logo. Withdraw cash up

to the available cash advance limit on his HBL Credit Card for a charge

applicable from the withdrawal date.

Balance transfer facility

Card holder can pay off balances he owes to other banks through his HBL

Credit Card at a lower service charge.

Security

Card holder cannot lose cash if he doesnt carry it! In the event that his

card gets stolen/lost, he should call HBL PhoneBanking to have his card

blocked immediately.

Hbl debit cardHBL Visa Debit Card allows a card holder to pay for his purchases directly

from his bank account. He doesnt have to carry cash and his monthly

statement provides him with a complete record of all his transactions so he

can manage his expenses with ease.

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Features

No InterestHBL Visa Debit Card is the perfect way of paying for purchases as it gives

access to the exact amount of money a customer needed, as and when he

needs it. There is no interest or credit on payments because he spends

from the money available in his personal HBL Account.

Ease & Security

HBL Visa Debit Card offers ease and convenience because card holder

doesnt have to visit an ATM to withdraw cash. Paying with the HBL Debit

card is safe because it eliminates the need to carry cash. A single swipe

automatically debits the exact purchase amount from his personal HBL

account.

Spending Limits

The daily spending limit at shops and outlets on HBL Visa Debit Card is Rs.

100,000. (These figures are subject to the balance available in account).

Free Account Statement

HBL cardholders receive a free monthly account statement for their Debit

Card and ATM transactions to help them keep track of their spending.

International Recognition & Acceptability

HBL Visa Debit Card is accepted at over 20 million Visa merchants

worldwide, including over 10,000 merchants in Pakistan. As an ATM card it

is accepted at more than 1,000 1-Link & M-Net ATMs in Pakistan and

864,000 Visa ATMs worldwide. No matter where card holder is, with the HBL

Visa Debit Card, HBL is always with him.

No Liability

In case of a lost or stolen card, card holders are protected against

fraudulent transactions made on their card after they report the incident.

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HBL Personal Loans

With the rising cost of living, it is becoming increasingly difficult to make

expensive purchases or meet unexpected expenses. HBL is helping

customer finance them with Habib Bank personal Loans (old name flexi

loan). Customer may avail a personal loan of up to SIX TIMES of his net

take-home salary subject to a maximum of Rs.300,000/- provided he work

for an organization approved by HBL.

Features

Flexible tenure: 12, 24, 36,48 or 60 months

No processing fee

Repayment through easy and affordable monthly installments from

salary.

Credit Life & Disability Insurance

Repayment through easy and affordable monthly installments

You determine the need, we help you finance

Option of add up replacement for existing customer.

Minimum salary Rs. 12000

No salary limit for existing customers.

23% or 21% rate for existing users instead of 25%

HBL Phone Banking

Now the bank is just call away. Customer can now call HBL PhoneBanking

and save a trip to the branch. His query will be resolved in a single

telephone call from anywhere and at anytime.

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T-PIN Generation

Customers TPIN (Telephone Personal Identification Number) is generated

the first time he calls and he can use it as your password for verification

purposes, self-service banking through IVR and additional services throughHBLs PhoneBanking Officers. Customer can change his TPIN anytime he

like.

HBL PhoneBanking services for Deposit Account customers

Customers can use the Interactive Voice Response (IVR) system or talk to

HBL PhoneBanking Officers to:

Get his account balance

Get information about the last 5-10 transactions carried out on his

account

Request bank statement, either through fax or email (as supplied in

his subscription form)

Get details of transactions from the last 6 months on each of the

accounts listed on his subscription form

Change and/or modify his contact details Transfer funds between his own accounts (as listed in the

subscription form) or from his account to a third party account (as

listed in the Third Party Authorization Form)

Transfer funds from his own account to an account in another bank

under the 1-Link network (Inter Bank Funds Transfer)

Generate his own choice of ATM Pin without filling a request at your

branch

Inquire about HBLs product offerings

Lodge a complaint in case of any inconvenience

Inquire about the daily accounts related profit rates and currency

exchange rates

Request a number of physical instruments and/or branch banking

related services that he might require, including:

Pay Order

Demand Draft

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Statement

Balance Certificate

Cheque Book

HBL PhoneBanking services for HBL CarToCar and Car Loan

customers

HBL CarToCar and HBL CarLoan customers can enjoy the following services

through HBL PhoneBanking:

Balance Inquiry

Last 5-10 Transactions

Statement Generation (Email and Fax)

Account Maintenance Assistance in case of Car Theft/Damage

Hbl Bank Assurance

HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce

Amaan (Retirement Plan) and Tabeer (Child Education & Marriage). These

products have been designed keeping HBLs customer base as the focus

and will provide life insurance along with an investment option.

Amaan (Retirement plan)

Amaan is a pension plan that provides an opportunity for growth through

investment in a balanced portfolio with post-retirement income benefits.

The plan covers life insurance and gives attractive returns on investment to

its customers.

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Tabeer (Child Education and marriage plan)

Tabeer is a plan that provides parents with a means to accumulate a fund

over a period of time which can then be used to pay for a childs education

or marriage. Plans are available for both under and over 45 years of age.

Lockers

Lockers are available in many of the HBL branches in different sizes like

small, medium and large; some branches also have extra large and cubical

lockers. Except rural areas because of security reasons.

Eligibility for using lockers

Only the account holders can avail the facility of lockers. The annual rent

will be directly debited from their respected accounts at the start of the

year.

Charges

SizeKey deposit

(refundable)

Annual rent

Rs.

SMALL 2500 2750

MEDIUM 3000 3850

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LARGE 4000 6050

Key deposit is refundable at the time handing over the locker to bank. For

the staff of HBL key deposit is not required and also the annual rent is very

low for them.

HBL CORPORATE BANKINGHBL Corporate Banking Group comprises a seasoned team of Relationship

Managers (RMs) to meet the demanding service standards of large

corporations. A long history of financing and nurturing relationships in

Pakistan has given HBL a unique insight, enabling it to provide timely and

effective financial solutions for their customers to meet the growing

challenges of a global economy. For a corporate customer, with a turnoverof at least PKR 300 million, HBL has a range of solutions designed to help

him with his banking needs. Their RMs have the expertise customer need to

create tailored financial solutions catering to the specific requirements of

his business. Whether establishing a new venture or expanding an existing

business, HBLs team understands customers banking needs and works

closely with him to realize his goals.

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Services

HBL provides the following services to meet customers funding

requirements:

Working Capital Finance, including Overdraft, FE Loans, etc.

Pre and Post Shipment Export Financing (PKR and USD based)

Import Financing (PKR and USD based)

LMM Funding

Receivable Discounting

Islamic Banking facilities

Cash Management Services

Trade Services including Letter of Credit, Letter of Guarantee and

Standby Letter of Credit, etc.

HBL CORPORATE CENTERS

1.Corporate Centre, Karachi 6.Export Processing Zone, Karachi2.PIA Branch, Karachi 7.Steel Mills, Karachi3.Stock Exchange, Karachi 8.Stock Exchange, Lahore4.Corporate Centre, Islamabad 9.Morga Branch, Rawalpindi5.Corporate Centre, Faisalabad 10.Corporate Centre, Multan

11. Karachi Port Trust, Karachi

HBL COMMERCIAL BANKING

HBLs Commercial Banking Group targets medium sized companies with a

turnover of at least PKR 50 million. Its business units are located in Karachi,

Lahore, Faisalabad, Sialkot, Gujranwala and Peshawar. Each unit is

dedicated to service business clusters located within these cities. They

have the ability and the resources to meet the needs of customers

business with their pro-active, responsive and experienced Relationship

Managers who are committed to understanding customers business.

Services

HBL offers financing for the following:

Working Capital

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Procurement of Inventory

Receivables

Procurement of Machinery

Expansion of production facilities

Import of raw materials

Exports

Guarantees

HBL COMMERCIAL BANKING CENTERS

1.Al-Noor, Karachi 9.Foreign Exchange, Karachi

2.Korangi Industrial Area, Karachi 10.Napier Road, Karachi

3.Saddar, Karachi 11.S.I.T.E. Karachi

4.Tariq Road, Karachi 12.Panorama Centre, Lahore

5.Badami Bagh, Lahore 13Peco Road, Lahore

6.Kashmir Road, Sialkot 14.Paris Road, Sialkot

7.Small Ind. Estate, Sialkot. 15.Circular Road, Faisalabad

8.Peoples Colony, Faisalabad 16.Trust Plaza, Gujranwala

17.Super Market, Peshawar

HBL Zarai Banking

HBL ZaraiBanking facilities are spread across the country and provide

financing through more than 800 of their branches. HBLs presence in all

agriculture belts of the country ensures easy access to farmers in rural

areas. HBL ZaraiBanking provides loans to small-scale land owning farmers

as well as large institutionalized and alliance based finance, enhancing

agricultural harvest and, in turn, economic output of the country.

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Products

HBL ZaraiBanking enables farmers to invest in premier quality seeds,

fertilizers, pesticides, agricultural implements and non-farm setups through

its various product programs.

Crop Inputs

Crop specific finance for purchase of Agriculture inputs such as seed,fertilizer, pesticide and other related inputs.

Farm Implements

Finance available for purchase of farm implements & machinery like

combined harvester, sprayers, ploughs, tube wells and other crop-related

tools/implements.

Tractors/Agricultural Vehicles

Finance available to individual farmers, self-employed tractor operators,providing the option to select vehicles from a range of different

manufacturers.

Livestock

Finance available for feed, medicines, raw material, raising charges and

other related activities.

Poultry

Finance available for all poultry related activities including poultry farm

construction/equipment, hatchery plant & machinery, poultry feed, poultry

medicines, composite feed production, poultry processing and other related

activities.

Fish Farming

Finance available for inland fish farms as well as deep-sea fishing. This

includes procurement of boat, fish locating equipment, nets & ropes, ice

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maker, fish farm water solution, hatchery construction/equipment, purchase

of medicines / feed and other related activities.

Group Lending

Joint finance facility for a group of farmers with small land holdings for

working capital requirement.

NOTE: These finances may be availed under Demand Finance or Running

Finance categories. Demand Finance is usually available for short term

financing needs while Running Finance is available on the basis of revolving

limit.

ISLAMIC BANKING

Islamic Banking is a growing market segment that offers attractive

opportunities to potential and existing customers. At HBL, Islamic Banking

offers Shariah compliant products and services to meet the short and long

term requirements of business, trade and industry.

Shariah Compliance

HBLs Islamic Banking products are in strict compliance with the tenets of

Shariah and bear Shariah Compliance Certification from an independent

Shariah Advisor. Their Shariah Advisor has in depth experience in Shariah

rulings (Fatawa) and teachings at different forums with qualifications of

Dars-e-Nizami, M.A and L.L.B. HBL also have a Shariah Scholar, as member

of their Shariah Supervisory Committee to ensure a sound Shariah

Compliance mechanism, giving prompt responses to customers needs and

access to Shariah knowledge.

Products and Services

Corporate and Commercial customers can choose from Shariah compliant

banking solutions to meet their business needs.

Ijarah (Leasing)

Medium to long term facility for vehicles, plant and machinery leased out to

the client on rental basis.

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Diminishing Musharaka

Medium to long term facility for vehicles, plant and machinery on joint

ownership basis.

Murabaha

Local and Import facilities for purchase of raw materials, semi finished and

finished goods, stores or spares.

Trade Services

Letter of Credit Facility, Collection of Foreign Bills, Collection of Local Bills,

Letter of Guarantees.

Customers are welcome to visit their Islamic Banking branch for the

following services:

Current Account (PKR, USD, EURO, POUND STERLING)

Basic Banking Account

ATM/Debit Card Facility

Foreign / Inland Remittances Utility Bills Collection

E-banking / Internet Banking Services

24/7 Phone Banking Services

Personalized customer friendly services

Saving Deposits will be introduced soon

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Learning as an internAs every body knows that "Knowledge without practice is sterile "In order to

give vent to this idea an Internship program of six to eight weeks has been

arranged in different esteemed organizations during M.B.A. In this regard

on 15th of June 2009, I was asked by Mr. Mirza Saeed (HR officer in HBL

regional office Sahiwal) to go to Habib Bank Jinnah Chowk branch to start

an internship of seven weeks there. During this period I got a chance to

work and learn in following departments of the bank:

Foreign exchange department

Bills clearing department

Credit department

I.T department

Cash department

Accounts, ATM and Lockers department

Duties and learning in Foreign exchange department

First of all I started my training in foreign exchange department of the bank

under the supervision of Mr. Asif Iqbal (Manager Forex department). I came

to know about the different functions of foreign exchange department and

how to perform these functions during my work in the department.

My duties in the department were related to the followings:

Foreign currency exchange rates.

Letter of credit (L.C) both opening and negotiation.

Letter of guarantee

Issuing check books for foreign currency accounts

Remittances applications.

Learning

Opening of of L.C., bank starts working on opening process after an

application is received from the buyer (importer). I came to know about the

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process of opening of L.C, documents that bank demands from applicant,

form used for that purpose, getting A.T (Availance Ticket) from regional

head office and scanning and mailing the documents to head office Karachi

for the purpose of getting approval, and payment on maturity date.

Opening and negotiation both are centralized process in Habib bank

therefore approval from head office is required.

Bank starts negotiation of letter of credit (which would be already opened

by importers bank) after the application from seller (exporter). Before

sending the documents for payment to importer bank negotiator bank must

ensure that the entire document mentioned in Claus 46A of the L.C are

attached and complete.

During the week I also worked on Remittances application. An applicant

who wants to transfer funds abroad must have a foreign currency account

in the bank. State Bank of Pakistan only allow account to account transfer

of funds abroad through banks. And I came to know about the process and

information required to fill the form. I also came know about the process of

issuing foreign currency accounts cheque book to customers. During the

week I learn many things about the mechanism of foreign trade.

Duties and learning in bill clearing department

The second department in which I got a chance to work was bill clearing

department. During the work in clearing department I came to know about

the different functions of clearing department and how to perform them. I

came to know the process of receiving cheques by Dak, how to check

cheques for any error like, the cheques should be of the bank which is the

clearing member of area which comes under Jinnah Chowk branch forexample if the cheque is of bank Al-Fallah Lahore then it should go to zonal

branch of Lahore region instead of zonal branch of Sahiwal. Then checking

whether the amount of cheque and OBC (outward bank collections) voucher

attached to it is same or not. If no error is found then making register

entries by noting down their OBC number branch code and amount of the

voucher. Then:

Calculating the total amount of vouchers by summing individualamounts.

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Calculating the total amount of cheques by summing individual

amounts.

Preparing an add list to be attached with clearing instruments

(cheques). Writing vouchers for demand drafts.

And I also came to know about the different types of stamps and their use

in particular situation like DAK RECEIVED stamp and CLEARING stamp. After

attaching add list, clearing instruments are handed over to NIFT for further

processing. These clearing instruments are delivered to their respective

banks for clearance by NIFT. I also learnt in case of Bankers Cheques how

to verify signature from the book in which all the signatures of authorizedpersons of HBL are given with their specific code. And I also worked on OBC

(Outward bank collection) forwarding schedule. I came to know the process

of sending cheques or other clearing instruments for clearance to zonal

branch of another region.

Filling vouchers

Assigning OBC numbers

Making entries in OBC register

Duties and learning in credit department

After bill clearing department I started my work and learning in credit

department of the branch. Credit Manager told me about the terms and

conditions of the commercial loan, types of commercial loan like industrial

loan and loan for merchants, how to make proposal for commercial loan,

document required to make a proposal, markup of commercial loan (18.5 %

annually). He also gave me chance to view some old proposals and the

proposal on which he was working.

Different types of consumer financing.

Flexi loan (personal loan)

Auto finance

Lifestyle loan

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Only the government servant who has his salary account at least six month

old in HBL can apply. Different markup for different categories like 21%,

23% and 25%.

21% for existing users upto 3 year duration

23% for existing users for 4 or 5 years duration.

25% for new customers

I also did work on documentation process for personal loan. I came to know

about the different types of document required to complete a case for

sending it to regional head office for approval, document like branch check

list, application form, Copy of CNIC of customer and two references, CNIC

verification report from NADRA, customers account statement, financeagreement form etc.

I also came to know about different types of securities which a bank

demands from customer while issuing loan. e.g. Guarantees, Mortgage,

Hypothecation and Pledge.

Duties and learning in Accounts, ATM and Lockersdepartment

Then I learned about ATM (automatic teller machine). I came to know

about the functions and working process of ATM machine. Loading cash and

balancing at the time of loading again. Next my main concern was to know

about all the aspects of ATM card. I came know about the types, process of

issuing ATM card to customers, filling forms, how to activate ATM card,

charges of issuing and using ATM card.

Then I spent my time in lockers department. I took all the information

about the terms and conditions of allotting and operating a locker, types of

locker like small, medium and large, charges of using lockers, key deposit

(refundable), filling application forms, insurance amount for specific size of

locker and etc. I also came to know about the process of operating locker

by the customer, how to open the locker with the help of two keys.

1 key in the hand of bank officer (anticlockwise)

2nd key in the hand of customer (clockwise)

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Customer is allowed to operate the locker in full privacy. Only the customer

himself or other person authorized by him can operate the locker. After that

bank officer has to take the signature of the customers on attendance

register maintained for this purpose.

Then my duty was in Accounts department. I came to know the procedure

for filling the form to open an account, different types of stamps required

and about signature of the staff. Documents required to be attached with

the form.

Copy of CNIC

Utility bill

Provisional receipt KYC (Know Your Customer)

And how to post an account on system after filling the form. Then I came to

know about Saving accounts and different types of accounts in saving

category and terms and conditions of each type.

1. HBL Value Account

2. PLS-Savings Account

3. Remittance Munafa Plus Savings Account4. Daily Munafa Account

5. Daily Progressive Account

Then current accounts

6. HBL Business Value Account

7. Current Account8. Basic Banking Account (BBA)

Term accounts

9. HBL Advantage Account

10. Investment plus Deposit

FC accounts

11. FC-SB

Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) andGBP (UK pound)12. HYFFD (High Yield Foreign Currency Fixed Deposit)

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How this experience will impact my career

Working for 07 weeks in HBL Jinnah Chowk branch as an intern was very

informative experience for me. During the time I learnt many new things

which are surely going to help me in my professional career. It was a good

experience for me to observe and to be the part of practical working of an

organization like HBL. During the internship I got a chance to understand

general consumers behavior and his needs and wants related to banking

services and products.

Recommendations

As we seen from the previous analysis of the financial statements I have

realized that that Habib Bank is performing very well since its inception. It is

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quite difficult to give suggestion to improve the banking conditions Habib

Bank Limited. As we know that nothing is perfect, there is always a room for

improvement, so I will recommend following suggestions for HBL:

Employees Training programmes must be introduced on continuous

basis so that Employees have understanding with the latest

developments especially with the customers.

Bank should introduced incentive plans for employees on regular basis

so that if employees may work whole heartedly for the welfare of their

organization. While giving incentives qualification, work, experience,

hard work and such other factors must be considered.

Mismanagement of resources must