Professional Documents
Culture Documents
1 1
Definition Of Bank:
There are different definitions of banks according to the function performed with it.
Some of them are:
“A bank is a firm which collects money from those who have spare. It lends money to
those who require it.”
“A bank is a firm that takes deposits from households and firms and makes loans to
other households and firms"
According to www.dictionary.com:
Kinds of Bank:
Every bank has different features. On the basis of functions, spheres of activities,
ownership, domicile, etc, the banks are classified into various types, which are:
• Classification on the basis of Functions.
• Classification on the basis of Ownership.
• Classification on the basis of domicile.
• Classification as Scheduled bank and Non-scheduled bank.
On the basis of function, we can classify banks are in the following ways:
• Central Bank
• Commercial Banks
• Exchange Banks
• Saving Banks
• Agricultural Banks
PROVINCIAL BANKS
The Bank of Khyber
The Bank of Punjab
MICRO-FINANCE BANKS
The First Micro Finance Bank Limited
FOREIGN BANKS
ABN Amro Bank N.V.
Al-Baraka Islamic Bank B.S.C.(E.C.)
American Express Bank Limited
Bank of Cylon
Credit Agricole Indosuez
Citibank N.A.
Deutsche Bank AG
Doha Bank
Habib Bank A.G. Zurich
International Finance Investment & Commerce bank Limited (IFIC)
Mashraq Bank psc
Oman International Bank S.O.A.G.
Rupali Bank Limited
Standard Chartered Bank
Standard Chartered Grindlays Bank Limited
The Bank of Tokyo-Mitsubishi Limited
The Hong Kong and Shanghai Banking Corporation Limited
Vision
Mission
Introduction of FBL:
Faysal Bank started operations in Pakistan in 1987, first as a branch set-up of Faysal
Islamic Bank of Bahrain and then in 1995 as a locally incorporated Pakistani bank
under the present name of Faysal Bank Limited. On January 1, 2002, Al Faysal
Investment Bank Limited, another group entity in Pakistan, merged into Faysal Bank
Limited which resulted in a larger, stronger and much more versatile institution. In
fact it has the highest share capital amongst private banks in Pakistan and is amongst
the largest in terms of equity.
Faysal Bank Limited is a full service banking institution offering consumer, corporate
and investment banking facilities to its customers. The Bank’s widespread and
growing network of branches in the four provinces of the country and Azad Kashmir,
together with its corporate offices in major cities, provides efficient services in an
effective manner.
The strength and stability of Faysal Bank Limited is evident through the Credit Rating
assigned by JCR-VIS Credit Rating Company Limited of “AA” (Double A) for long
to medium term and “A-1+” (A One Plus) for short term.
Objectives
• To offer the market banking products and services which are needed,
convenient, marketable and Shariah complaint.
• To grow as an institution with prudent growth and profitability in view.
• To build relationships based on trust and mutual benefit with customers and
shareholders.
• To maintain a highly efficient and motivated employees base.
• To continue being socially conscious organization.
Strategic Planning
Our values:
Integrity:
We will hold fast to the highest standards of ethical conduct to meet our commitment
to our customers, employees and shareholders above all, we will hold true to our
personal commitment and conviction to the truth.
Corporate Governance:
Our goal is to respond to a rapidly changing business environment t in a timely
manner, to improve corporate citizenship and transparency by reinforcing our ethical
standards and building a relationship of trust with customers and stakeholders.
Responsible Communication:
We commit to creating a dignified workplace based on honest, open and respectfully
communication. We first listen with the intent to understand and then communicate
ideas, results and information forthrightly.
Excellence:
We are committed to the highest level of personal and professional excellence and
operate with a goal of continuous improvement.
Teamwork:
As a team, we play to win from the smallest unit to the enterprise as a whole .We
achieve far more as a team than as individuals.
Respect:
We appreciate our diversity and believe that respect-for our employees, customers,
stakeholders and all those with whom we interact is an essential element of all
positive and productive business relationship. We treat everyone as we wish to be
treated, with dignity and respect.
Quality Service:
The moment of truth is impact through every employee's interaction. The essence of
quality service is embodied through every interaction that we have, within ourselves
and with our customers.
• During the year Faysal bank was placed in the top 25 performing companies
by the Karachi Stock Exchange (KSE) for the year 2003. This was a singular
honor, as Faysal bank was the first event scheduled bank to have relevant
this award.
• Also during year the annual report of Faysal 0bank for the year 2003 won
the third prize in "the best Corporate Report" contest in the services sector ,
a competition jointly instituted by the institute if Chartered Accountants of
Pakistan and institute of cost and management accountants of Pakistan.
• The annual report of Faysal bank for 2006 won the first price in the Best
Corporate Rewards organized by a joint committee reviews annual reports of
all listed companies with a view to rewarding the best in terms of quality of
presentation and financial disclosures.
• Faysal bank was also awarded "Certificate of Excellence" in commercial
banking category by Management Association of Pakistan (MAP). MAP
instituted this award in 1982 with the sole aim to recognize and honor
companies showing outstanding performance and demonstrating progressive
& enlightened management practices. This award denotes the excellence of
Bank's Management and its corporate Governance Policies.
Corporate Information
Board of directors:
Audit Committee:
Tariq Iqbal Khan Chairman
Graham Roderick Walker Member
Sanaullah Qureshi Member
ORGANIZATIONAL STRUCTURE
FBL is successfully meeting all its objective software programs that are installed for
each department that has increased their efficiency and they can take any information
which is no time from any of their branches/clients are getting quick response due to
their efficient network and staff members.
This branch is very well managed and staff is working devote and work for his/her
personal work they are committed and loyal to their work everyone is ready to
perform other work, if he or she is not there, to prevent customers from suffering the
absence of an employee the other one perform his/her duty with whole heartedly.
Organizational Structure Of
Rahim Yar Khan Branch
Manager
Agri
Department
Operation
Manager
Ground Floor
Operation
Manager
Locker & Cash
Western Union Department
Department
Accoun
t
Openin
g
Depart Agricul
ment ture
Depart
ment
Stairs
Entrance
First Floor
Auto
Financi
ng
Dep't.
Auto
I.T
Financi
Room
ng
Dep't.
Auto
Financi
ng
Dep't.
S
tai
rs
The Islamia University of Bahawalpur, R Y K Campus
Internship Report on Faysal Bank Ltd.
19 19
DEPARTMENTS OF FBL
1) General Banking
a) Account Opening
b) Bills And Remittances
c) Deposit Department
d) Cash Department
3) Agri. Department
5) Housing Department
6) Auto Department
7) Cad Department
8) Dispersement Department
Also the bank officer must take proper information from the customer about his
Means, line and place of business.
Introduction of Accounts
It is a most important column of AOF. Without the proper introduction, the new
account cannot be opened. The bank officer consider following precaution in this
respect.
• The introducer should come with the prospective customer to the bank, so there
will be no doubt about the identity of customer.
• If the introducer does not come then bank officer must take extreme care about
his signature verification.
• The staff member can become introducer if they personally known to the
prospective customer.
NADRA Verification:
Verification of customer ID card is also necessary from NADRA. NADRA also
provide there software to FBL that they personally take verification in Bank.
Indemnity Form:
If the customers signature are shaky than he will also sign the indemnity form in
which he mentioned that Bank is not responsible for any obligation about his
signature.
Letter of Thanks
A letter of thanks is sent to customer through mail to verify his address. If the address
is not sending his address than bank quickly take action and can close the account.
Individual Accounts
Joint Accounts
• The bank will fulfill the stop payment instruction of any cheque lodged by any
member of joint account but removal of these instruction must be signed by all
the member
• If any member dies then there will be no transaction in the account and balance
in the account will be paid according to instruction recorded at the account
opening form.
• The member of joint account can delegate authority to any third party to operate
the account. All the members Sign such mandate but it will be cancelled if any
of the member dies or insolvent.
• Partnership firms can open only current account due to business concern.
• All partners must sign the account opening form.
• Account is opened with the name of Company
• When them changes are taking place in the firm structure or if the firm is
declared as insolvent then transaction in the account will be stopped. In case of
insolvency, the personal accounts of partner will also become inoperative.
The specific conditions to open the account of Joint Stock Company are:
♦ Introduction is not required for these accounts because companies are legal
entities Death, retirement or dismissal of any director does not effect operation
on the account.
♦ However, death, retirement or dismissal of the directors authorized to operate
upon the accounts temporarily put embargo on operations of the account. In
such cases, fresh resolution authorizing another person to operate upon the
account is to be called for from the company.
♦ The Cheques signed by the directors before their death retirement or dismissal
will be considered as valid instrument.
♦ The operation on the account will be stopped when company terminates its
career.
♦ Copy of Bye-laws/regulations
♦ List of members of managing/Executive committee
♦ Copy of certificate of registration (if registered)
♦ Copies of NICs of the members of executive committee
The customer fills the Requisition slip for issuance of cheque books along with the
AOF. The requisition slip is duly signed then bank officer enters cheque book series
on it. The officers enter the series of cheque book in register in a sequence .The Bank
issue 25, 50, 100 leaves cheque books.
On 25 leaves cheque book charges are 200 Rs.
On 50 leaves cheque book charges are 400 Rs.
On 100 leaves cheque book charges are 800 Rs.
When cheque book issue than bank take signature on cheque book register and also on
requisition form.
Maintenance of Account:
If amount in account is less than 10000 than 50 Rs. Per month will be deduct as a
maintenance charges
Inactive Account
If there is no transaction in any account within 6 months then account will become
inactive. Now the account will be active only by crediting some amount. Basically
account is deactivating for the verification of customer.
Closing of Account
If the customer wants to close the account then he will fill the closing application form
along with unused cheque book in the bank. The bank will pay remaining balance to
account holder.
Renting Of Lockers:
♦ On grant of the locker to the customer, the relationship between the bank and
the customers is that of Licenser & Licensee, where the bank shall be the
licensor and the customer is the licensee.
♦ Locker may be hired in joint names. However, lockers in joint names shall be
rented only when both or all the customers sign the application form.
♦ All record of the lockers is recorded in the "locker recorded register"
Operation on Lockers:
♦ The access to lockers is allowed during working hours i.e. from 9 am to 5pm.
♦ The signature of the licensee shall be verified from the specimen signature card
or from computer system.
♦ One key of locker is under the custody of Bank and the other key is operated by
customer .The locker cannot be opened unless both keys are not used.
♦ In case of termination of the contract, the licensee will be required to surrender
Size of Lockers:
Size Height Width Depth
Small 4 1/2" 7" 22"
Medium 4 1/2" 14" 22"
Large 9" 14" 22"
Charges of Lockers:
♦ In FBL total lockers are 144
♦ Small are 54
♦ Medium are 72
♦ Large are 18
♦ The key charges of all types of lockers either small, medium or large lockers
1500.
♦ Small Locker 1200 Rent /year + 1500 key charges
♦ Medium Locker 1700 rent/year +1500 key charges
♦ Large Locker 3500 rent/year +1500 key charges
Insurance of Lockers:
♦ Insurance of Small Lockers 500000 Rs.
♦ Insurance of Medium Lockers 800000 Rs.
♦ Insurance of Large Lockers 1000000 Rs.
It is necessary for a customer that never put things whose worth in aggregate is more
than the insurance of locker
Lost Of Keys:
Of the keys are lost than its charges are 4500/locker small, medium or large locker.
Actual charges of keys are 1500 but if the keys are lost than locker is repaired and
new keys are used.
Repairment of Lockers:
Bank has contract with Abdullah & Sons Company for repairing of lockers .They
charge 4500 per locker Repairment. Company is situated in Gujran wala. Locker is
repair every time when customer terminates the locker.
Termination of Locker:
When customers want to terminate the locker than both keys are broken and lock is
also broken and locker is again repair for the new customer.
Charges:
On 15000 100 Rs.
Above 15000 400 Rs
Advantage:
The main advantage of western union is that account is not necessary of the person
who is going to receiving money.
Disadvantage:
The disadvantage of western union is that the money which is received through
western union is never recorded in bank so; this money is not accepted in legal affairs.
Because this money has no proof that from where it is earned so, it is not accepted.
Through western union you can only receive money but you cannot send the money to
any other country.
Alternative:
To overcome the disadvantage of western union, FBL provide the facility of Bank to
Bank transferring of money. The money is transfer from FBL to foreign bank. The
charges are 15$ per transaction.
The money is transfer through NOSTRO bank.
Cash Department:
Cash department is the most important because it is point of contact between the bank
and the customer. The FBL provides efficient and personalized services to their
customer. This department creates the impression of bank commitment of
professionalism in its system and procedure. So the staff of cash department is well
equipped and trained not only in technical handing of cash but also in the art of
customer.
It includes:
♦ Receiving cash from the customer.
♦ Making payment to the customers against their Cheques or other payment
instruments.
♦ Handling cash withdrawal and deposit into the bank account with state bank of
Pakistan and with other branches of bank.
♦ Ensuring proper storage safety and security of he cash in cash.
♦ Ensuring proper cash management and sorting out of issue able cash.
♦ Maintaining daily cash position in SYMBOL system.
♦ Transfer of Cheques from one account to another.
The officer passes the cheque and debits the customer account with the same amount
and posts the stamp of transfer on it. Then cashier makes the payment to the customer
and writes the detail of notes at the back of cheque to maintain daily cash position.
If one account holder wants to transfer some amount from one account to another,
then he will give the cheque favoring the other account holder and also fill the deposit
slip. The cashier after checking the details and enter in the register transfer to the
officer. The officer transfers the mentioned amount from one account to another.
The following different instruments are used to remit the funds in FBL.
♦ Demand Draft
♦ Pay Order
♦ Call Deposit Receipt
Demand Draft:
Demand draft is used to transfer amount from one city to other city where there is no
branch of FBL than demand draft is used. When there is no branch of FBL than in that
city there will be another bank which provides agency services to that bank. Habib
bank provides agency service to FBL e.g. in khanpur there is no branch of FBL than
DD will pay to Habib bank. But now a day FBL not issue demand draft.
Pay Order
Pay order is issued for payment in the same city because it is issued form one branch
can only be payable form the same branch.. Through pay order customer can transfer
money from one branch to another branch. FBL charge no 75 Rs. Per pay order. In
starting of Faysal Bank pay order is only payable in that branch from where it is
issued but now a day it is pay able in any branch of FBL in Pakistan.
Clearing Department:
All the cheque and negotiable instrument, which are drawn or received from other
bank, are processed and subsequently settle by the clearing department.
For a bank, following are the requirements of being a member of clearing house:
♦ It must be scheduled bank i.e. it is registered
♦ It must have account with State Bank of Pakistan
♦ Sufficient balance should be in his account
Normally clearing is carried out in SBP, but in the city where there is no branch of
SBP than National Bank work as subsidiary of SBP.
Types of Clearing:
There are two types of clearing
♦ Inward Clearing
♦ Outward Clearing
In inward clearing the Cheques of other banks comes in Faysal Bank while in outward
clearing the Cheques of Faysal Bank goes to other banks. All clearing is carried out in
NBP in Rahim Yar Khan.
Process of Clearing:
At 10 am authorized representatives of all the banks of the city get together in SBP or
NBP for 1st clearing, where exchange of Cheques take place, here 1st clearing ends.
Representative of FBL takes the FBL cheques these cheques are entered in the inward
clearing register and than delivered to respective branches of FBL. And the cheques of
other banks are gives to other banks. At 4 pm all the representatives again get
together and exchange of cheques take place. There is no physically or receipt of cash
takes place, actually every clearing house agent has account with SBP which is
debited or credited.
Credit Department:
Credit department is one of the most important departments of the bank. Assets are
resources of any organization and “Advances” are most valuable asset of the bank.
Credit department takes money from depositors at certain rates and utilizes these
funds by extending loans at specified rate to the creditors. The difference between
these two rates is the profit of bank. So it is major source of profit. The credit
decisions are carefully analyzed because advances create risks for the bank.
When the requested amount exceeds the credit limit of level then case is sent to upper
level. All the loans sanctioned at branch level must be approved by area office.
2. Credit Appraisal
♦ Safety
♦ Suitability
♦ Liquidity
♦ Disposal
♦ Remuneration
Safety
The bank can reduce the risk by this principle. Always extend the loans against pledge
of liquidity security and only those persons that have ability to repay
Suitability
Always extend loans to most suitable sector and growing industries and business.
Liquidity
It is the most important principle. Collection of credit is most crucial so bank always
pledge those securities, which are most liquid and can be en-cashed within one
accounting period. And earnings are available to repay the credit.
Disposal
After portfolio analysis, loans should be extended to different sector and not to one
sector to maintain balance growth of economy.
Remuneration
Lending must be generating profit; that is ultimate goal of lending.
Risk Analysis
The high risk gives the high return. Bank analyzes their risk on advances by applying the five C’s.
♦ Character
♦ Capacity
♦ Cash
♦ Collateral
♦ Condition
Character
The moral and social character of individual is analyzed. The individual should not be
involved in any illegal and unethical business. Past payment history is analyzed that
should always pay his obligation in time.
Capacity
Credit officer analyzes the capacity of borrower to take loan and ability to repay the
requested credit. The credit officer decides by the calculation of liquidity of company
and debt ratio.
Cash
Cash is considered to analyze the ability of repayment. These must be regular and
proper cash flows because they provide liquidity to refund the loan.
Collateral
Bank always secures their loans with collateral. Collateral is security that applicant
provide against the loan. It is important because it builds stake of creditor and if the
applicant defaults then bank will adjust his loan and mark up by it.
Condition
Different conditions are considered by the bank to minimize the risk. These conditions
relate to industry and country economic condition.
♦ Volume of loan
♦ Time period
♦ Liquidity
So the rate of mark up is varied in every case. Mark up is calculated at daily basis but
it is charged at the end of the month. When the customer pay mark up then credit
officer debit the customer account and credit to bank income.
Types of Loans:
1. Running Finance
It is also called “over draft” because bank provides an extra credit limit to customer.
Running finance is a secured loan because bank provides extra credit limit against
some security. The customer can avail this credit limit at any time of the maturity
time period; which is normally one year. But if the conduct of customer is satisfactory
and customer can avail this facility to the extended period, then this limit is roll over
to next year.
The cheque book is issued and customer is flexible to draw with in the drawing power.
The customer is allowed to withdraw the defined extra credit limit or a portion of it.
2. Cash Finance
Cash finance is like a running finance but it is extended against the pledged security
like inventory, stock or land and 30% cash margin is also charged. The pledged stock
is also insured from any insurance company and the customer also pays all the
insurance and any other security expenses. If customer wants to draw stock then he
will deposit amount equal to the stock and bank will issue delivery order in favor of
customer.
3. Term Finance
In the finance, replacement schedule of loan is mentioned along with loan amount,
time period and mark up rate. Term finance has minimum time period 7 days to 5 year.
Mark up rate varies according to nature of offered security and time period but now a
day it exists between 10% to 15 % . Replacement schedule contains monthly
installment in which amount of markup and principle is mentioned after deduction of
all taxes etc (Saving account, Faysal Moavin) and also on yearly basis (Faysal Izafa).
This type of finance is profitable for the bank because it generates regular income for
bank. It is also profitable for customers for customers because of high interest.
If the customers want to withdraw money than .5% plenty is charged on the principle
amount which is remaining in fixed deposit account.
4. Staff Finance
This facility is provided for the staff of FBL. The purpose is welfare of the employees.
SBP specify the credit limit for the staff of bank. The mark up rate is less than
commercial rate. The term & condition of staff finance are same as of term finance.
5. Personal Finance:
Personal loan is unsecured for bank because no security is pledged in this situation.
Only take 6 security Cheques. Range is from 1 lack to 5 lack .It is only for salaried
and business persons. This department is much sensitive because recovery of loan is
♦ Secured loan
♦ Un-secured loan
The range of unsecured loan is from one lack to 5 lack .In this loan no
security is pledged so unsecured. Mark-up is also high. Mark –up varies
according to situation.
While in secured loan security is necessary and loan limit is above to 5
lacks.
Documents required:
Features:
♦ Flexible repayment options
♦ Option to partially or fully terminate the facility.
♦ Financing tenor up to 20 years
♦ Fast processing.
♦ Minimum processing charges
♦ Financing available up to 80% of the market value of the property.
Eligibility:
♦ A Pakistani Resident and National holding the New Computerized Identity
Card (NADRA)
♦ Aged between 25 to 60 years if you are a salaried person and of 65 years if
you are in business
♦ In continuous employment for 3 years
♦ In business with at least 3 years of business or professional experience
♦ Earning a net monthly income of Rs.30, 000/- or more [spouse’s income can
also be combined with yours].
Auto Department:
Faysal Car Finance is the most flexible product designed to meet customer needs.
Features:
♦ Car financing for locally manufactured new and used cars and imported cars.
♦ Car Financing up to five years
♦ Down payment only 20% of the car value
♦ Minimum documentation charges.
♦ Fast processing.
♦ Option to prematurely terminate the facility.
Eligibility:
Now you can swiftly, easily and cost effectively own a car if you are:
Limitations:
Faysal bank not lease cars to judges, lawyers, army, police .
FBL gives car on financing and also on leasing .In financing the ownership is of
customer while in leasing the ownership is of bank and after all payments of
installment and markup the ownership is transfer to customer.
Mark-up
FBL charge 18.5% mark up on auto financing, from 18.5% the 10.3% given to SBP
and remaining is the profit of FBL. But for contractor employees the mark up rate is
16% while for permanent employees the mark up is less than the actual mark up. Now
a days the KAIBR rate is 10.3% while few months before it was 15.49%.It is changed
after 3 months ,6 months etc but for banks it is always less good because in this
situation the profit of bank is high.
Insurance:
Faysal Bank charge 5% insurance from customer, from 5% insurance companies
charge 3.5% while 1.5% is the benefit of Faysal bank. Faysal bank use ADAM G
and EFU Companies for insurance.
Down Payment:
Down payment should at least 20% of the value of asset or car. The down payment
can be 15% but in this situation special approval is necessary from manager and
from regional office.
1st Step:
Application Form:
Application form is also filled by customer, in application form bank write all
detail of car or auto which the customer required. For example color, model, with
tracker or with out tracker etc.
Tracker:
Tracker is used to find out the car that car is at which place. Tracker insurance is
4.5% from Tracker Company but Faysal bank charge 5%, its mean .5% is the
profit of bank.
Bank statement:
It is necessary for customer that to submit bank statement to bank. Bank statement
provides information about the income of customer. The income of customer
should 50000 Rs. Per month or the income should 3 times greater than installment.
It is used to check that either customer in future can pay the principle and markup
or not. If the customer pays late than 100 Rs. Per day is plenty to customer.
Data Check:
In it also mentioned the detail of loan history. For example fro which type of loan he
is applied and how much, and if he applied than he take advantage of it or not.
Address Verification:
Address is also verified by bank from ASREM Company; Address of references is
also verified. ASREM take charges of 2000 Rs. Bank personally cannot verify the
address; it is mentioned by the head office or regional office that from which company
take verification. In every case different companies are used for verification but
mostly ASREM is used for this purpose.
Application Profile:
On application form complete information about applicant is mentioned.
2nd Step:
Before leasing the car bank firstly take signature from customer on "Customer
Agreement" in which write all term and conditions are mentioned about usage of auto,
For example if customer gives auto to another person without informing the bank than
Toyota
Altis Automatic 1.8 PETROL 1,445,000
Altis Manual 1.8 PETROL 1,355,000
Camry 2006 Automatic Transmission 3,099,000
Corolla 2.0D SE 1,235,000
Corolla 2.OD 1,114,000
Corolla 2.OD Saloon 1,405,000
Corolla GLI 1,040,000
Corolla XLI 950,000
Hilux S/C 210,000
Hilux S/C D/Spec 2,700,000
bank can take back the car and plenty will be 75000 Rs. on customer .After paying the
amount customer can get the car. Car financing is secured for bank while unsecured
for customer.
Developing loan:
Developing loan is for long term for the purpose of development of land, for example
loan for tractors, treasures and machinery use in land for the purpose of development
of land. Developing loan further classified into
• Form Loan
• Non- Form loan
Form loan is for forms for example tractor and machines use in fields. While Non-
form loan is for dairy, poultry form, fishing, and shading and for buying animals.
Production Loan:
Production loan is issued for the inputs of fields. For example for seeds, fertilizers and
labors etc. It also has two types
• Form Loan
• Non- Form Loan
Form loan is used fro the inputs used in fields for example seeds, fertilizers, water
expenses etc .While Non-form loan is used for the feed of animals for example Oil
cakes ,green food etc
Mark-up
Mark-up is 18.5%, 14.5% is charged by KIBER and remaining 4% is charged by FBL.
The 4% markup can be changed by FBL according to its requirements but KIBER
markup remains same for all banks.
Down payment:
• The down payment of tube well is 10%
• For Dairy and Poultry form is 20%
• For seeds, fertilizers etc is no down payment
Mutation
In it mentioned that land is either buy by customer or it is transfered from forefathers
Jama Bandi
In this document there is mentioned the area of actual land
Quotation
It is in that situation when loan is for tractors etc. In it customer write that from which
Company he want to purchase tractor and which model etc.
Feasibility Report
If the customer want to open a peltry form than in it mentioned all detail of expanses.
Title Deed
In title deed ownership is mentioned that who is the owner of this land.
After completing all these documents the file is send to Customer Service Officer who
verifies the NIC from NADRA. Than the account of customer is opened.
Repayment Schedule:
Production loan is for short term and the customer pay after one year, while
development loan is from 1 year to 5 year. Markup is paid after six months.
Visit Report:
In visit report ACO (Agri Credit Officer) physically visit the land to check that land
physically exists or not.
Guaranty Report:
In it all data and information of guarantor is mentioned
Facility Letter:
In facility letter all term and conditions are mentioned.
After completing these entire documents the file is send to head office for approval.
ACO check the file and if any document is missing than that document is attach and
file again send for approval, if no obligation is from head office than ACO transfer the
file to Cad department where client number and loan number is issued.
After issuing the loan number the customer can withdraw the money from his account.
Faysal bank always provides most modern services to its customers. To provide
information about the structure of bank, its network, about its product & services,
about the bank performance, FBL design an innovative website for its inspiring
relationship on Internet.
All the branches of FBL are connected through Internet. And customer can
mail to any branch about his inquires and problems. FBL will response to customer
problems and inquires through Internet.
Products Services
• Deposit account Pocket Mate Visa Debit Card
• Faysal Saving account Transfer of Funds
• Rozana Munafa account Safe Deposit Lockers
• Basic Banking account Non- stop Banking
• Faysal Moavin
• Faysal Premium
• Faysal Izafa
• Mahfooz Sarmaya
• FCY Saving Plus
Consumer Loans
• Faysal Finance
• Car Finance
• House Finance
Features:
• Account can be opened with Rs. 5000/.
• No requirement for maintaining a minimum balance.
• Free of charge statement of account for customers once a year. In case more
statements are required than standard charges would be applicable.
• Free ATM transactions on Faysal Bank ATM machines. However charges would
apply on non Faysal Bank ATM machines.
Saving Account:
Faysal Savings is specially designed to cater to your hard earned savings.
Features:
• Account can be opened with an initial deposit of Rs. 10,000/.
• No restriction on the number of transactions.
• Profit is calculated on monthly average balance.
• Profit payment on six monthly bases.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Features:
• No minimum balance requirement.
• No restriction on the number of transactions.
• Profit is calculated on monthly average balance.
• Profit payment on monthly basis.
• Access to account through on-line banking at all Faysal Bank branches across
the country.
• Easy access through cheque book an ATM/Debit card. The ATM/Debit card can
be used at over 2000 ATMs in the country.
Faysal Premium:
Faysal Premium is a savings account specially designed for high value deposits with
attractive profit rates having the following features.
Features:
• Account can be opened with an initial deposit of Rs. 5 million
• Profit is calculated on monthly average balance.
• Profit payment on monthly basis.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Faysal Sahulat:
Faysal Sahulat is a transactional account specially designed for individuals or business
customers who want instant access to their funds with no restrictions on the number of
transaction.
Features:
• Account can be opened with an initial deposit of Rs. 5,000.
• Unlimited transaction facilities.
• On maintaining an average balance of Rs. 300,000 following additional
facilities are provided.
• Unlimited cash deposit facility
• 365 Pay orders, 365 Demand Drafts, 365 cheque leaves per year free.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Features:
• Account can be opened with an initial deposit of Rs. 100,000/ for
individuals and Rs. 500,000/ for corporate customers.
• Profit is calculated on monthly average balance.
• Profit payment on monthly basis.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Features:
• Account can be opened in three major international currencies: US Dollars,
Pound Sterling and Euro.
• Minimum balance for opening Mahfooz Sarmaya Foreign Currency Account is
1000 units of the currency in which the account is opened.
• Account can be opened in any of the following types:
o Savings Account
o Term Deposit Account
• Current Account
Features:
• Account can be opened in US Dollars, Pound Sterling and Euro currency.
• Minimum balance for opening FCY Saving Plus is 500 units of the currency.
• Profit is calculated on monthly average balance.
• Profit is disbursed on monthly basis.
Term Deposit:
Faysal Izafa:
Every customer’s financial needs are different. As a result, the Faysal Izafa Term
Deposit is designed to provide individuals and corporate customers an opportunity to
grow their money securely and earn attractive profits.
Features:
• Account can be opened with an investment as low as Rs. 25,000/.
• Annual and monthly option available.
• Financing facility of up to 90% of invested amount.
• No annual fee for the ATM/ Debit card for the entire tenure.
• First cheque book on investment of Rs. 300,000/ or more.
No monthly installments
Since with PocketMate you are using your own funds there is no risk of over spending
nor any worries to pay monthly bill on time.
Countrywide Acceptance
Your PocketMate Visa Debit Card is accepted at over 40,000 merchant establishments
in Pakistan i.e. restaurants, department stores, grocery stores, petrol pumps, etc.
Besides, you can use it conveniently at more than 2,000 ATMs all over Pakistan.
Maximum Security
The PocketMate Visa Debit Card contains additional security features, it can only be
used ‘Electronically’, which means lesser probability of fraudulent attempts on the
card.
Easy Traveling
Your PocketMate Visa Debit Card saves from carrying cash or writing cheques. It
means customers no longer have to stock up on traveler’s cheques or cash when they
travel.
How to Apply
Existing Faysal Bank Debit Card holders have to fill a simple application form to
obtain PocketMate. Existing account holders not possessing any card presently can
also apply for PocketMate by submitting the application form.
Your PocketMate will be delivered to your branch within 5-7 days of your application
submission.
Summarized Performance
Faysal Bank
Summarized Balance Sheet of 5 years
Years 2007 2006 2005 2004 2003
Assets:
Cash 6872032 7207998 6696726 5048395 2866278
Balance with other Banks 3708451 2883040 2045887 3564030 648660
Lending to Fin. Institutions 7078102 4608205 10742841 4417378 872132
Investment net of provision 31553108 22525358 23887864 11502805 11218501
Loans and advances 87346401 74468644 62035978 51373254 29626223
Other Assets 2204368 1537764 2371825 1473952 1183315
Operating Fixed Assets 2514959 2239392 2882441 1158407 1030352
Differed Tax Assets _ _ _ _ 160936
Total Assets 141277421 115470401 110663582 78538221 47606397
Liabilities:
Bills Payable 2406927 4516125 1193309 905637 430862
Borrowings from Fin. Institutions 9995855 14965037 15295730 8478048 6529810
Deposits and Other Accounts 102067422 74413641 74595564 56460329 31332172
Sub-ordinated loans 1000000 _ _ _
Liabilities against assets subject to
financial lease 7827 14664 122549 18434 16404
Deffered tax liability 2691466 1839860 1269113 166442 _
Other Liabilities 6951421 5924440 3527023 2294899 1318437
Total Liabilities 125120918 101673767 96003288 68323789 39627685
Net Assets 16156503 13796634 14660294 10214432 7978712
Share Holders Equity
Share Capital 5296445 4237157 3684484 2912635 2647850
Capital Reserve 3567033 3079527 2516211 2259101 2115989
Unappropriated Profit & Reserves 1481668 1815643 1938651 1079492 846016
Total Equity of the Bank 10345146 9132327 8139346 6251228 5609855
Surplus on Revaluation of Assets 5811357 4664307 6520948 3963204 2368857
Faysal Bank
Vertical Analysis of Balance Sheet
2007 2006 2005 2004 2003
Assets
Cash An Balance With Treasury
Banks 4.86% 6.24% 6.05% 6.39% 6.02%
Balance With Other Banks 2.62% 2.49% 1.84% 4.51% 1.36%
Lending To Financial Institutions 5.01% 3.99% 9.70% 5.59% 1.83%
Investment 22.33% 19.50% 21.58% 14.94% 23.56%
Advances 61.82% 64.49% 56.05% 63.63% 62.23%
Operating Fixed Assets 1.78% 1.93% 2.60% 3.00% 2.48%
Deferred Tax Assets-Net 0.00% 0.00% 0.00% 0.00% 0.33%
Other Assets 1.56% 1.33% 2.14% 1.92% 2.16%
Total Assets 100% 100% 100% 100% 100%
Liabilities
Bill Payable 1.70% 3.91% 1.07% 1.14% 0.90%
Borrowing From Financial
Institutions 7.07% 12.96% 13.82% 10.73% 13.71%
Deposits And Other Accounts 72.11% 64.25% 67.40% 71.49% 65.81%
Sub-Ordinate Loans 0.70% 0.00% 0.00% 0.00% 0.00%
Liabilities Against Assets
Subject To Finance Lease 0.00% 0.01% 0.11% 0.02% 0.03%
Deferred Tax Liabilities-Net 1.90% 1.59% 1.14% 0.21% 0.00%
Other Liabilities 4.92% 5.13% 3.18% 2.90% 2.76%
Total Liabilities 88.43% 87.86% 86.75% 86.51% 83.24%
Share Capital 3.74% 3.66% 3.32% 3.68% 5.56%
Reserves 2.52% 2.66% 2.27% 2.86% 4.44%
Inappropriate Profit 1.06% 1.64% 1.75% 1.36% 1.77%
Minority Interest 0.05% 0.08% 0.00% 0.00% 0.00%
Surplus On Revaluation Of
Assets 4.11% 4.03% 5.55% 5.01% 4.97%
Total Liabilities And Equity 100% 100% 100% 100% 100%
Current Ratio
2.5
2
1.5
Current Ratio
1
0.5
0
2003 2004 2005 2006 2007
Years
Interpretation:
Current ratio is used to assess the short term debt paying ability of the firm. FBL in
starting was not good in paying its short term debt but now in 2007 it is very good in
short term paying ability .Its reason is FBL now have much focus on deposits and
reserves, now they can pay its liabilities immediately.
2.5
2
1.5 Quick Acid Test
1 Ratio
0.5
0
2003 2004 2005 2006 2007
Years
Interpretation:
Acid test ratio is useful in measuring the liquidity position of the firm. It is more
liquid ratio than current ratio. Here the result of current ratio and Acid test ratio is
almost same because the reason is that FBL has no inventory so, the result of both
ratios are same.
Cash Ratio
Cash ratio =Cash Equivalents + Marketable Securities/Current liabilities
0.2
0.15
0.1 Cash Ratio
0.05
0
2003 2004 2005 2006 2007
Years
Interpretation:
The cash ratio indicates the immediate liquidity of the firm. A high cash ratio indicates
that the firm is not using its cash in a better way. While the cash ratio which is too low
could indicate an immediate problem with paying bills. The cash ratio of FBL in 2006
and in 2007 is remain stable.
Working Capital
Working capital= Current asset – Current liabilities
Working Capital
80000000
60000000
40000000 Working Capital
20000000
0
2003 2004 2005 2006 2007
Years
Interpretation:
It is also used to indicate the short term solvency of the business. The higher the ratio
the better the position of company in debt paying. The working capital ratio of FBL is
sharply increases every year from 2003 to 2007 because its liabilities are decreases.
NPM (%)
23.13% 35.70% 35.08% 23.79% 9.15%
40.00%
30.00%
20.00% Net Profit Margin
10.00%
0.00%
2003 2004 2005 2006 2007
years
Interpretation:
This ratio is used to measure the profit return on sales. It is used to measure net
income generated by each rupee of sale. The higher the ratio the better the company in
profitability. The ratio of FBL is going to decrease from 2005 to 2007; this thing
indicates that FBL is not in position in profitability.
150%
0%
2003 2004 2005 2006 2007
Years
Interpretation:
Operating profit is "pure" because they measure only the profit earned on operations.
The Operating Profit Margin is going to decrease every year from 2003 to 2007
because of increase in expenses, this thing is not better for FBL.
ROA (%)
5.11% 2.78% 3.25% 2.5% 1.77%
6.00%
4.00%
Return on
2.00% Assets
0.00%
2003 2004 2005 2006 2007
year
Interpretation:
It is also called firms return on investment (ROI). It measures the overall effectiveness
of management in generating profit with its available assets. Higher this ration better
is company, but FBL ROA show decreasing trend expect of 2003. This show that FBL
is not in good in profitability.
Return on Equity
Return on equity (ROE) = Net Income/ Average stockholder’s equity
ROE (%)
44.22% 29.57% 42.74% 32.67% 23.33%
60.00%
40.00% Return on total
20.00% Equity
0.00%
2003 2004 2005 2006 2007
Years
Interpretation:
60.00%
40.00% Return on
20.00% Common Equity
0.00%
2003 2004 2005 2006 2007
Years
Interpretation:
It measures the return only to the common shareholders.
The Return on equity of FBL is decreasing in 2006 and in 2007. Its mean that the
profit by using common equity is decreasing.
90.00%
88.00%
debt ratio
86.00%
Debt Ratio
84.00%
82.00%
80.00%
2003 2004 2005 2006 2007
year
Interpretation:
The debt ratio indicates the percentage of assets financed by creditors, and how well
creditors are protected in case of solvency. The lower the ratio the better the company
position in long term liability. Here the debt ratio of FBL is going to increase from
2003 to 2007, so, this thing is not better for FBL.
800%
600%
debt to equity
Debt To Equity
400%
Ratio
200%
0%
2003 2004 2005 2006 2007
year
EPS(Rs)
10
8
6
EPS(Rs)
4
2
0
2003 2004 2005 2006 2007
Years
Interpretation:
It represents the number of rupee earned on behalf of each outstanding share of
common stock. The graph shows the decreasing trend in 2006 and in 2007 while in
2005 the ratio is high but after that decreases.
P/E (%)
4.43% 7.23% 8.89% 9.10% 15.35%
20.00%
15.00%
Price Earning
10.00%
Ratio
5.00%
0.00%
2003 2004 2005 2006 2007
Years
Interpretation:
80.00%
60.00%
Dividend Payout
40.00%
Ratio
20.00%
0.00%
2003 2004 2005 2006 2007
Years
Interpretation:
This ratio indicates that from earnings what percent of it given to outsiders inform of
dividends. Here it shows that from 100 Rs earnings a big portion of it is given to
outsiders. This thing FBL is very attractive for investors.
Dividend Yield
Dividend Yield =Dividend per common share/ Market price per common share
15.00%
10.00% Dividend Yield
5.00% 12.50%
0.00%
2003 2004 2005 2006
Years
Interpretation:
This ratio indicates that from investment how much dividend is generated. The higher
the ratio the better the position of company. Here the ratio has decreasing trend from
2003 to 2007 and it is very disappointed for investors.
23
22
21 Book Value Per
20 Share(Rs)
19
18
2003 2004 2005 2006 2007
Years
Interpretation:
It indicates the amount of stockholders equity that relates to each share of outstanding
common stock. It also compare with market price per share. If book value is less than
SWOT ANALYSIS
Strengths
Weaknesses:
The H.R department is not well establish in RYK branch
• There is only one branch in RYK City that’s why there is a heavy burden of
work on the employees.
• Bank has no adequate number of branches as compared to its competitors like
Askari Bank etc.
• To improve the services and to handle the problem of customers, the bank has
no customer complaint department.
• In case of any problem in the online system Bank has no IT qualified employee
in RYK branch.
• The procedure and documentation for loaning is very difficult.
• No job security is there for the employees, and no union exits to secure them.
Opportunities
• FBL can introduce special schemes of lending for potential small industries.
• Increase the capacity of branch instead of going towards overstaffing.
• Bank has no foreign branches so it should open its branches outside the country
• FBL has applied for a license for separate "Islamic banking branches"
• Barclays' which is an American bank wants to takeover FBL, in this situation
there overall system become international.
Threats
• SBP levy heavy penalties on bank in case of violating the prudential regulations
especially in case of advances.
• Now the other players of banking are also providing the modern technology
based services like online and Internet banking facility so there is no more
competitive advantage in this area
• The bank stop it's working in case of system failure or in load shading.
• Responding to the SBP's l regulations management takes too much care while
granting loans.
• Because of takeover of Barclays it is a big threat that the top management will
totally change.
• Because the takeover of Barclays new and strike rules and regulations will
impose on employees.
SUGGESTIONS
• The bank should improve and increase its branch network in Pakistan as well as
in foreign countries.
• Training of the staff should be carried on regular basis in the field of banking
and operating computers.
• Bank should establish a separate marketing department in each branch.
• Although bank has agency relations with the foreign banks but it should open
its foreign branches to compete with the competitors.
• Time period of the loan procedure should be reduced.
• Special awards should be given to hardworking employees to perform extra
• New staff should hire for Agri. Department.
• The Bank should focus on long term debt paying ability
• The management should try to create more understanding between different
departments to increase their productivity
• The top management should create those policies through which they can
protect the Bank if the Barclays takeover it
• There should decentralization decision making
CONCLUSION
After the completion of my overall analysis and studies of Faysal Bank Ltd
performance and banking system, I come to the conclusion:
Faysal Bank won many awards because of its best performance. It is the second best
Bank Rahim Yar Khan city because of its services and deposits. Currently its deposits
are 49 cruor. The salaries of employees are very attractive as compare to other Banks.
The deposits of Bank are going to increase very sharply in 2007, but there long term
debt paying ability is not good. The software (Symbls) which is used by Bank is
attached with Singapore so, it is international software.
The one big opportunity for Bank is that the in future there are much chances that an
Americans Bank "Barclays" takeover the Faysal Bank. If the Barclays takeover the
Faysal Bank than this thing will be very beneficial for Faysal Bank.
The location and layout of Faysal Bank is up to the mark but it needs more new
technology to compete its competitors (Bank Alfalah).
At the end I can says that the Faysal Bank plays an important role in Rahim Yar Khan
where there is much need of commercial Banks, Faysal Bank plays its role very well
to gain economy of scale.
Pakistan remains one of the future prospects of our business. This coupled with SBP
initiated conductive regulatory environment has created a host of opportunities going
forward. Foreign investors and reputed global institutions have also expressed their
confidence in the market by making an entry in the country's banking sector .Given
the commitment of its sponsors, infrastructure, technology platform and franchise
value. FBL is very well positioned to capitalize on these opportunities. In 2008 there
focus on prudent growth, cost efficiencies, effective controls, continued investment in
technology & infrastructure.
Our operating plan envisages expansion in branch network by another 24 branches, 4
sub-branches and 5 sales & service centers. We have also applied for license for
dedicated Islamic branches. These initiatives would give us access to bigger customer
segment and will add convenience to our customer's experiences.