Internship Report on HBL

F-8 Branch, Islamabad.

3/11/2010

Submitted in partial fulfillment of the requirements

For the degree of Master of Business

Submitted To : Col. Imtiaz A. Mohar

Submitted By : Khurram Jehanzeb
Program : MBA
Enroll # : 01-122081-048

BAHRIA UNIVERSITY, ISLAMABAD CAMPUS

Contents
Contents..................................................................................................................... 2

................................................................................................................................... 4
ACKNOWLEDGEMENT..............................................................................................4
ACKNOWLEDGEMENT ................................................................................................ 4
About HBL................................................................................................................... 6
ORIGIN OF TERM “BANK”............................................................................................7
HISTORY OF BANKING IN PAKISTAN............................................................................7
History of HBL............................................................................................................. 8
Mission & Objectives...................................................................................................9
Mission........................................................................................................................ 9
Vision.......................................................................................................................... 9
Our Brand...................................................................................................................9
Values......................................................................................................................... 9
Board of Directors.....................................................................................................10
Management Forum.................................................................................................11
A Bird’s Eye View......................................................................................................12
HBL at A Glance........................................................................................................13
Organizational Hierarchy..........................................................................................14
Chain of command....................................................................................................15
Chain of command in Bank Branch...........................................................................16
Human Resource Management.................................................................................17
Recruitment and Selection.......................................................................................17
Entry level programs................................................................................................18
Experienced Professionals........................................................................................18
Selection Process......................................................................................................19
Services Offered by HBL...........................................................................................19
Technology .............................................................................................................. 20
Software used by HBL ..............................................................................................20
MISYS........................................................................................................................ 20
INNOVATION.............................................................................................................22

2
House Finance.......................................................................................................... 22
Auto Finance.............................................................................................................22
HBL Flexi Loan..........................................................................................................22
Life Style...................................................................................................................23
HBL Rescue............................................................................................................... 23
For Personal Loans...................................................................................................23
For Credit Card Payments.........................................................................................24
Auto Cash (Debit/ ATM Card)....................................................................................24
Habib Bank icard as your Debit Card........................................................................24
HBL iCard as your ATM Card.....................................................................................24
HBL Fast Transfer.....................................................................................................24
HBL E-Bank............................................................................................................... 25
HBL F-8 Markaz Branch.............................................................................................25
Departments I worked in..........................................................................................25
Operations ............................................................................................................... 25
Foreign Currency Department..................................................................................25
Advances Department..............................................................................................25
Account Opening Department..................................................................................26
Requirement for Account Opening .........................................................................26
Current Account OR Demand Deposit:.....................................................................26
SAVING ACCOUNT.....................................................................................................27
Basic Banking Account.............................................................................................27
Opening of an Account.............................................................................................27
Allotment of Account Number...................................................................................27
Specialty of Account Number...................................................................................28
Cheque Receipts Department...................................................................................28
Fixed Deposits Department......................................................................................29
Remittance Department...........................................................................................29
Intra Bank Transfers.................................................................................................29
Interbank Transfer....................................................................................................29
Local Fund Transfers................................................................................................29
Issuance of Banker’s Cheque....................................................................................29
Clearing Department................................................................................................30

3
Inward Clearing .......................................................................................................30
Outward Clearing......................................................................................................30
Main problems in HBL...............................................................................................32
SWOT ANALYSIS OF HBL...........................................................................................32
Strengths.................................................................................................................. 32
Weaknesses..............................................................................................................33
Opportunities............................................................................................................ 34
Threats..................................................................................................................... 35
CONCLUSION & RECOMMENDATIONS.......................................................................36
CONCLUSION............................................................................................................36
RECOMMENDATIONS.............................................................................................36

ACKNOWLEDGEMENT

ACKNOWLEDGEMENT

4
First of all I am thankful to “ALMIGHTY ALLAH”. Who gave me the strength,
patience, courage and enthusiasm needed to write and complete this report, then
to my friends who assisted me in this effort and we worked daylong to accomplish
this assignment and to my parents who supported me financially and encouraged
me morally. I have a debt of gratitude to all my teachers who taught me throughout
my academic career.

It was pleasure for me to be sent to The HBL, F-8 Markaz Branch. I am very thankful
to the honorable internship incharge. I learnt a lot from this training program and
this would guide me a lot while selecting my career. I also know how to face the
problems and how to find out the ways for their solutions.

The preparation of this report was a massive undertaking but the highly competent
and experienced bankers of HBL F-8 Markaz Branch, Islamabad. Provided me with
all assistance, information, advice and suggestions that I needed which contributed
importantly to this report.

Khurram Jehanzeb

5
About HBL
HBL is the prime Bank in country, established in 1941, having its registered head office in
Karachi. It was nationalized in 1974, but on 26th February 2004 it was privatized by Government
of Pakistan and taken over by Aga Khan Fund for Economic Development (AKFED). They
acquired 51 percent of shares of HBL.

It is one of the largest Banks of Pakistan with 1466 branches inside country and 112 overseas
offices (presence in 25 countries) at different destinations around the world covering 5
continents. It internationally operates in countries including USA (New York), United Kingdom
(London, Manchester, Birmingham), Scotland (Glasgow), Belgium (Brussels), France (Paris),
Lebanon (Beirut), Netherlands (Rotterdam), Turkey (Istanbul), Kenya, Mauritius, Seychelles,
Nigeria, Afghanistan, Bahrain, Oman, UAE, Iran, Sri Lanka, Sudan, Kuwait, Bangladesh, Egypt,
Hong Kong, Singapore, Maldives, Indonesia and Australia. Currently HBL is having customer
base of over 6 million

Pakistan International

6
ORIGIN OF TERM “BANK”
It has not so far been decided as to how the word ‘Bank’ originated. Some authors opine that
this word is derived from the words ‘Bancus’ or Banque’ which mean a bench. Other authorities
hold the opinion that the word ‘Bank’ is derived from the German word ‘Back’, which means
‘joint stock fund’. It is therefore, not possible to decide as to which of the opinion is correct, for
no record is available to ascertain the validity of any of the opinions

"A financial institution, deals with money and credit. It accepts Deposits from individuals,
firms and companies at a lower rate of Interest and gives at higher rate of interest to
those who need them.”

“A financial establishment which uses money deposited by customers for investment, pays it
out when required, makes loan at interest, exchanges currency, etc.”

HISTORY OF BANKING IN PAKISTAN

The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed as the date
on which independence was to take effect. It was decided that the Reserve bank of India should
continue to function in the dominion of Pakistan until September 30, 1948 due to administrative
and technical difficulties involved in immediately establishing and operating a Central Bank.

At the time of partition, total number of banks in Pakistan were 38 out of these the commercial
banks in Pakistan were 2, which were Habib Bank Limited and Australia Bank of India. The total
deposits in Pakistani banks stood at Rs.880 million whereas the advances were Rs.198 million.
The Governor General of Pakistan, Muhammad Ali Jinnah issued the order for the
establishment of State Bank of Pakistan on 1st of July 1948.

In 1949, National Bank of Pakistan was established. It started with six offices in former East
Pakistan. There were 14 Pakistani scheduled commercial banks operating in the country on
December 1973. The Pakistan Banking Council prepared banks amalgamation schemes in
1974 for amalgamation of smaller banks with the five bigger banks of the country. These five
banks are as under:

1. National Bank of Pakistan

2. Habib Bank Limited

7
 3. United Bank Limited
4. Muslim Commercial Bank Limited
5. Allied Bank Limited

In early 90’s after the failure of nationalization policy, Government went for privatization of
financial institution. In last ten to fifteen years banking sector in Pakistan has shown tremendous
growth. Due to its remarkable growth, banking sector of Pakistan has become very attractive for
foreign investors. Many investors have already invested and still many more to come.

History of HBL
Habib Bank Limited was established by Mr. Ismail Habib on August 25, 1942 on the desire of
Quaid-e-Azam Muhammad Ali Jinnah, father of the nation. It was established with paid up
capital of Rs. 2.5 million. It was the first Muslim bank of sub continent. Quaid-e-Azam first of all
opened his personal account.

The first branch of HBL started functioning on 30th August, 1942 at Muhammad Ali Road
Bombay, In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later
on shifted the Bank's Head Office from Bombay to Karachi on 7th August, 1947 just one week
prior to independence, to play its pivotal role in the development of this newly born country.

At the time of independence, the areas which now constitute Pakistan were producing only
agricultural products raw material for indo-Pak subcontinent. Partially no industries were there to
process the raw material; therefore the raw material was exported from Pakistan. There were 19
non-Indian foreign Banks which were engaged in the export of crops from Pakistan with only
two Pakistani Banks i.e. HBL and the Australia Bank. The circumstances were completely un-
certain. The confidence of the people had been shaken by the un-friendly environment and till
the time peace had not been restored, people would naturally have been interested in other
things. The nation was quite young with extreme scarcity of resources and these definitely
added to the difficulties of the govt., to run its own Banking system immediately.
Following the announcement of the independence plan in June, 1947, the Hindus residing in the
territories now comprising Pakistan started transferring their assets to India and vice versa. The
Banks included those having their registered offices in Pakistan, transferred them to India in
order to bring a total collapse of the new state. It had been decided that the Reserve Bank of
India would continue to function in Pakistan so that the problem of demand and time liabilities,
coinage, currencies, exchange rate etc be settled between India and Pakistan and the Indian

8
Notes would continue to be legal tender in Pakistan till 30th September, 1948. Again due to
certain differences between Indian Pakistan, the India government withheld Pakistan's share of
Rs.75 core in forward and subscribed heavily to the government of Pakistan to the tide over the
crises.

At a time when this newly born country was at whirlwind of crises, it was HBL which fulfilled
generously the financial needs of all its sectors, paid salaries to the employees of all Govt.
departments, helped in the establishment of State Bank of Pakistan which the Quaid-e-Azam
inaugurated on July 1st, 1948. HBL after partition opened its branches throughout Pakistan to
provide finance and other facilities to the business community. In association with HBL, the
Govt. sponsored Pakistan Finance Corporation Limited for financing of cotton. The Bank helped
handsomely in the construction of WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided
finance and other facilities.

Mission & Objectives

Mission
“To make our customers prosper, our staff excel and create value for shareholders”

Vision
“Enabling people to advance with confidence and success”

Our Brand
Our brand identity is the outward expression of what we stand for as an organization. This is
summarized in our vision, mission and is supported by our values.

Values

Our values are the fundamental principles that define our culture and are
brought to life in our attitudes and behavior. It is our values that make
us unique and unmistakable. Our values are defined below:
A. Excellence
B. Integrity
C. Progressiveness
D. Customer Focus
E. Meritocracy

9
Board of Directors

10
Management Forum

11
A Bird’s Eye View
Year Important Event

1941 Commenced operation.

1942 Deposits reached 20 million rupees.

1943 Moved operations from Bombay to Karachi on the Quaid’s Request.

1946 First Banking Scheme Started for the Muslim Youth.

1947 HBL head office transferred to Pakistan.

1966 Silver Jubilee.

1974 Bank was Nationalized.

1991 Golden Jubilee

1997 HBL was Reorganized.

2004 HBL was Privatized.

2006 Largest Private Commercial Bank in Pakistan with branch network of

1477 branches within Pakistan and 65 international branches in 26
Countries.
2008 Declared best Bank.

2009  Pakistan’s Largest Banking Network .

 The Best Emerging Market Bank in Pakistan
 HBL among Top 500 Global Financial Brands

12
HBL at A Glance
Operational & Financial Aspects

Yea DEPOSIT ADVANCE PROFIT (PRE-TAX) ASSETS BRANCHES

r Rs. S
Rs. Rs.
(in millions) Rs.
( in millions) ( in millions)
( in millions)

194 24.0 10.3 0.4 27.0 2

1-42

194 266.0 63.7 1.5 321.2 21

7

197 7579.8 4005.1 113.0 11679 749

3

197 8592.8 6212.4 211.8 15,531 1084

4

199 120680.2 81140.9 731.0 228,799 1904

0

200 283,445 167,225 2224 333,751 1516

1

200 328,182 167,523 4088 403,013 1473

2

200 360,648 183,654 5469 434,932 1470

3

200 404,629 258,306 7146 486,982 1469

4

200 432,545 316,681 13833 528,893 1425

5

200 459,140 349,432 20532 590,291 1425

6

200 517,481 354,980 10199 654,652 1477

7
13
200 437,098 74,622 16254 696,712 1464
8
Organizational Hierarchy

Chairman

President

Board of
Directors

SEVP
SEVP Finance, Audit &
International Administration
Operations

SEVP Corporate SEVP Asset Remedial

Banking & Treasury Management

SEVP Retail Banking

& Information SEVP Credit Policy
Technology

SEVP Corporate Banking,

financial institute & Project
Finance

14
Chain of command
Chairman

President

Board of Director

Member Executive Board

Regional Chief

Zonal Chief

Branch Manager

Operations Manager

Bank Staff

15
Chain of command in Bank Branch

16
Human Resource Management
HBL is an organization that provides opportunities for its staff to have a challenging and
rewarding long-term career. To this end the Human Resource Group (HRG) encourages and
motivates its employees to excel in the responsibility that they have in the organization .It
believes that creativity and innovation comes from talent, knowledge and experience and it is
HBL’s endeavor to provide and maintain an environment which not only nourishes these
strengths but also provides opportunities for the staff to have a career which has
multidimensional growth opportunities.

In doing so, HRG has been restructuring and redesigning the overall structure of the
organization, which includes rationalization, cutting down the decision layers, improvement in
staff training and hiring professionals and MBAs at entry-level management.

The overall direction of HRG has been towards nurturing the strengths of the human capital to
its maximum with a defining principal to help create a progressive environment and sustain a
thorough commitment of our staff towards focused customer service.

HRG therefore recognizes the need to proactively invest in staff training and develop courses on
a regular basis. Under the umbrella of its Management and Organization Development Division
(MODD) its Management Development Institute (MDI) with its three fully equipped chapters at
Karachi, Lahore & Islamabad regularly conducts and outsource technical and personal
development courses for its all level of staff enabling them to meet the challenges of the ever-
changing business requirements and customer needs. During 2008, 529 courses, workshops,
skill development clinics and seminars in the disciplines of Service & Attitude, Market Research
& Selling, Management & Communication, Credit & Finance, I.T. & e-Banking, Treasury &
Trade Finance, Global/ Domestic Banking Operations and on other diverse subjects were
conducted by In / Ex-House professionally skilled, qualified and certified faculty and industry
experts for 10233 people of senior / middle line management & staff carving 1334 days training
days. There is no budget limit for Training and Education at Habib Bank.

HR Group aims to maintain and further improve the service-oriented culture and to make
employment not only satisfying but also enjoyable.

Recruitment and Selection

Our Recruitment

Meritocracy is an integral part of HBL’s recruitment policy. Our merit-based recruitment process
incorporates the principles of equal opportunity and leads to the appointment of the most
capable candidate. This ensures openness and transparency, allowing greater confidence in
the outcome of the selection process.

17
The merit principle at HBL aims to identify the most suitable person for the job assessed on the
basis of the following parameters:

•Educational Background

•Skills and Competencies

•Abilities and Attitude

•Experience

•Interpersonal / Communication skills

• Entry level programs

It includes

• Management Trainee

• Cash Officer

• Management Associates

• Internship

Experienced Professionals
We recruit experienced professionals in all areas of the bank and encourage the
creation and pursuit of innovative ideas. Our dynamic work environment offers
diverse opportunities to stimulate ongoing employee needs and supports career
enhancement opportunities.

18
Selection Process
The diagram below represents the process on which we base our selection. This gives an
overview to potential candidates as to the steps involved in becoming a part of the HBL
team.

Services Offered by HBL

Habib Bank offers the following services to the customers:

 Commercial Banking

 Corporate Banking

 Investment Banking

 Global Treasury

19
  Islamic Banking (referred to Modaraba)

 Cash Management

 Asset Management

 Zarai Banking

Technology

Software used by HBL

HBL is enjoying the competitive advantage of vast operational area. There are two
types of branches come under HBL network. One type is the online branches
whereas other type is batch branches (offline branches). So obviously HBL uses two
types of different software. All batch branches use SIMEX software whereas online
branches use MYSIS.

MISYS
MISYS (online) perform two type of system

• Cashier system
This system use only cash transaction like cash withdraw, deposited, Remittance,
Accounts opening, LFT etc.

• Equation system
Clearing inward or out ward, special or intercity clearing, supervision

20
21
INNOVATION

House Finance
HBL provides the facility of house finance. The Financing available for:

 Purchase of house

 Home improvement and renovation

 Self Construction

Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an economical way
for owing the car of your choice.

Some characteristics are:

 Lowest Down Payment

 Lowest monthly rentals

 Fixed repayment tenures of 36,48and 60 months.

 Lowest Processing charges

 Insurance premium rates as low as 3%

 Worldwide personal accidental insurance coverage of up to Rs. 200,000.

 All locally assembled new cars can be financed through this scheme.

HBL Flexi Loan

HBL had introduced a unique loan system for the middle income serving people in
various public sectors. It is basically meant for those in service people who earn
more than Rs. 5,000 per month. This loan meets the petty requirements of the
salaried class. Since the introduction of this scheme Rs. 6 billion is advanced
throughout the country. The maximum limit of this loan is Rs. 3,000,000.

22
Life Style
Habib Bank Lifestyle is an economical financing scheme for Household Appliances
and consumer Electronics.

Salient features of HBL LIFESTYLES:

 Loans for salaried/ self Employed individuals or business persons

 Low Mark-ups leading to affordable monthly installments.

 Financing from Rs.10,000 to Rs.500,000

 Fixed tenures of 6,12,18,24 and 36 months

 Low Processing charges

 Full credit Life Insurance

 Free Doorstep Delivery of items

 Available throughout Pakistan from over 330 designated Habib Bank

Branches

HBL Rescue
(Balance Transfer Facility)

HBL provides the facility to transfer your personal loan and credit card liabilities, at
the lowest rates ever.

For Personal Loans

The salient features of HBL Personal Loan are

 Maximum loan up to Rs. 1,000,000

 Choice of 12,24,36,48 and 60 months for payback

 Lowest Mark- up

 Quick processing

 Full Credit Life insurance

 Available from over 400 designated branches throughout Pakistan

23
For Credit Card Payments
 Maximum loan up to Rs.1,000,000

 Lowest mark-up-compared to any credit card

 Choice of 12,24,36,48 and 60 months for payback

 Quick processing

 Full Credit Life insurance

 Available from over 400 designated branches throughout Pakistan

Auto Cash (Debit/ ATM Card)

Habib BANK icard is used for dual purposes-a debit card and an ATM card and
provides you the direct access to cash in your account.

Habib Bank icard as your Debit Card

When payment is made at any merchant location using the card , exact purchase
amount is deducted from your account.

 Convenient, secure, quick and easy payment option

 Nationwide acceptability at various merchant locations displaying ORIX

Network logo

 Free of charge debit card transactions

HBL iCard as your ATM Card

 Offer a number of facilities such as cash withdrawal, Funds transfer
between accounts, Balance Inquiry, Mini Statement, PIN Change etc.

 Accepted at all 1LINK and MNET ATMs across the Country.

HBL Fast Transfer

This service provides a unique solution for overseas Pakistanis to send money back
home in a swift and convenient manner.

24
HBL E-Bank
It provides services via a dedicated communication link on the internet. The E-
Banking services provide “anytime, anywhere” banking to all 6 million customers.
This service, designed to be user friendly, assures secured access and
confidentiality.

HBL F-8 Markaz Branch

It was an honor for me to get training in HBL CDA Civic Centre. It is the largest retail
banking branch in Pakistan with deposits of 22 billion rupees. It is also the main
branch of Habib Bank in Islamabad. It also serves as credit hub as well as cash bank
for Islamabad region. It was an opportunity as well as honor for me because it not
only gives me a lot of practical exposure to real field work but also clear
understanding that how large institutions are run and controlled.

Departments I worked in
During the six week internship as I had to work in different department. The day I
reported in branch (27th July), manager operations had introduced me with Mr. Illyas
Ahmed experienced bank employee and told me that he would act as internship
coordinator. Mr. Illyas with mutual consultation assigned me seven departments
which are as follow

Operations
 Cheque Receipts Dept.

 Account Opening Dept.

 Fixed Deposits Dept.

 Remittances Dept.

 Clearing Dept.

Foreign Currency Department

Advances Department
In upcoming lines I will discuss departments one by one in detail.

25
Account Opening Department
Account opening department is one of the most important departments of a bank. It
is known as Gateway to the bank as anyone (any individual, partnership firm or
JSC) who wants to initiate relations or to avail the services of bank has to open an
account. This is why it is known as gateway to the bank. For opening of account a
form is given which includes all necessary requirements needed for further process.
This form also includes term and conditions of account holders and all details of
bank and customer relationship. (Annexure)Before opening an account there are
certain requirements.

Requirement for Account Opening

There are different accounts that can be opened with a bank. These are

 Current Account

 Savings Account

 Basic Banking Account

Current Account OR Demand Deposit:

Current Account of Habib Bank is open with 20,000/-, any Amount less than 20,000/-
the bank will charge 5% on the remaining balance, the current is mainly open for
the business man. Who can draw money any time from the bank this is the main

26
function of this account. With minimum balance of Rs. 5,000 in this account,
account holder can enjoy unlimited transaction facility. There is no interest paid by
the bank on this sort of account.

SAVING ACCOUNT
Saving accounts are opposite of current account. These sorts of accounts are
provided to encourage savings habits. There are different classifications of saving
accounts, usually termed as short, medium and long term saving plans. Each set
has its own unique characteristics. The saving Account of Habib Bank is started
from 20,000/-, any Amount less than bank will make charges of 55 per month
against the balance. The function of the saving accounts is to save the surplus
money of the people by giving them good interest rate. (Annexure 1)

Basic Banking Account

This account is basically introduced to cater needs of student and salaried persons.
We can say that it is an aspect of corporate social responsibility of bank. It is similar
to current account as no interest is paid. There will not be any deduction or
penalties in case of minimum balance. The only precaution to operate this account
to make sure that balance should not be zero or negative.

Opening of an Account
When all requirements are fulfilled by the applicant, the procedure of account
opening starts. To open an account of any type, bank officer has to go through five
different windows of MYSIS than the account holder information is sent for
verification.

1) ANC stands for Add New Customer

2) CIM stands for Customer Additional Information Maintenance

3) CAA stands for Customer Account Address

4) OCA stands for Open Customer New Account

5) ZYC stands for Know Your Customer

Allotment of Account Number

After going through the procedure above mentioned an account number is given to
the customer. One thing is very important for understanding that even going
through the above mentioned procedure successfully, it does guarantee the
opening of account. After allotment of account number it remains block for two days

27
as the verification process is in process in these two days. This is why account is
inactive for its first two days.

Specialty of Account Number

Fourteen digits account number is allotted to the HBL account holder. The first four
digits are code of HBL branch where account is going to be opened, afterward eight
digits are customer account serial number and last two digits indicates type of
account. For example

1416 75000254 03

Branch Code Account Serial # Type of account

Cheque Receipts Department

It is a helping department for clearing as well as Remittance department. When any
customer brings any sort of negotiable instrument it has to be deposited in cheque
Receipt Dept. These receivables are than further classified as under

 Interbank transfers

 Intra bank transfers

 Online transfers

 Travelers cheques

All those cheques which are of same branch or bank (e.g. HBL) are termed as online
transfer provided that both concern branches are online. Cross stamps are
engraved in front of instrument received to make it ownership of bank.

As this department acts as facilitator and there is also enough idle time, so more
than often different responsibilities are also assigned to this department. These
include

 ATM Forms issued and Received (Annexure)

 Draft cancellation(Annexure)

 Complaint forms

28
  Phone banking (Annexure)

Fixed Deposits Department

Fixed deposits are those which can be withdrawn only after the maturity period. In
this type of deposits the Bank allows high rates of interest depending on the time
period of deposits. The shorter the period of deposits, the less will be the interest
and vice versa. (Annexure)

Remittance Department
As it is clearly depicts from its name, this department is used to remit amount from
one place to another. This department performs following functions

 Intra bank transfer

 Interbank transfers

 Local fund transfers

 Issuance of bankers Cheque

Intra Bank Transfers

When an account holder presents a cheque of another party who is also the account
holder of same branch, funds are transferred immediate by using online system and
available for usage. This is known as intra Bank transfer.

Interbank Transfer
When an account holder (may be of same branch but should be of HBL) presents a
cheque of another party (account holder of HBL any other branch), funds are
transferred immediate by using online system and available for usage. This is
known as interbank transfer.

Local Fund Transfers

If any HBL account holder wants to credit his account without being physically going
to the parent branch, he can transfer funds by LFT. Remittance department also
performs the services of LFT.

Issuance of Banker’s Cheque

Bankers Cheque is recently introduced by HBL to replace old concept of pay order
and demand. This step was undertaken to make banking operations more customer

29
friendly as well as brought simplicity in banks operations. Earlier Pay Order (PO) was
made for local funds movement whereas Demand Draft (DD) to make payments in
outside region. But now for all customers, banker’s cheque is issued. The issuance
procedure is same as earlier. Customer has to fill Remittance form which includes
all relevant information. (Annexure)

Clearing Department
Every bank performs both as a paying as well as collecting functions on behalf of its
customer. It is however an important function of crossed cheques. A large part of
this work is carried out through the bankers clearing house. A clearing house is a
place where representatives of all the banks of a city get together and settle the
receipts and payments of cheques drawn on each other bank. As the collecting
banker runs the certain risks in receipt of their ownership, the law has provided
certain protections to the banks.

The basic function of clearing dept. arises when HBL account holder deposits
cheque of another back to collect its payment on his behalf or HBL account holder
gives a cheque to any other party concerning to any other bank. Usually a cheque is
sent through clearing is credited to the depositor account day after tomorrow. In
this regard there are two types of clearings

 Inward Clearing

 Outward Clearing

Inward Clearing
Inward clearing means all those cheques which are issued by account holders to
other parties and now these cheques are presented for payment (in term of amount
of cheque credit to presenter account).

Outward Clearing
Similarly when outside parties issue some cheque to our account holders, they
deposit these cheques in Cheque Receipts Department. Afterward these cheques,
as relating to other banks operating in country, are sent to clearing department or
further process. Clearing dept. sends these cheques to respective banks and after
realization of cheque, funds are credited to the account of respective customer. In
this regard there are two types of clearing

a. Intra city clearing

b. Intercity clearing

30
These cheques are sent through NIFT. Time for realization may differ in case of
remote areas.

31
Main problems in HBL
During my internship I found some major problems in HBL overall management.

 There is noticeable communication gap between upper level management

and operational staff.

 There is also over staffing in HBL moreover inefficient individuals are in credit
card department.

 There is huge difference in approaches of experienced staff & young staff

 Imported upper level management

 Experienced staff is frustrated mainly because of two reasons

 Salaries have not been revised from last 10 years

 Experienced Habibians are neither satisfied by the privatization

of bank nor they were taken into confidence at that times

SWOT ANALYSIS OF HBL

HBL is considered to be a very sound bank in the financial circles. This is the bank
where customers can safely keep their money as long as they want.

In SWOT analysis the best strategies accomplish in organization’s mission by:

 Exploiting opportunities and strengths.

 Neutralizing its threats and

 Avoiding its weaknesses.

Following is a list of SWOT of HBL

Strengths
 A skill or capability that enables HBL to conceive and implement its
strategies.
 The officers of HBL are considered as one of the most able professionals in
the banking world.

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  I observed that HBL employees (except annoyed ones) interact with their
clients as if they are their personal friends and discuss about their problems
as their own.
 HBL has got a reliable and easy to use internal computer system. HBL
maintained its data properly.
 HBL has very good security system.
 HBL is the larger commercial bank in Pakistan with the network of over 1466
domestic and international branches.
 Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest
in experience.
 HBL focuses on consumer banking by lucrative schemes, products and
services suiting best to the wants and demands of the customers.
 HBL has opened all its branches at commercial areas so that the customers
or clients face no problems in reaching to the bank.
 The band is always on the look to improve its services both to the domestic
as well as overseas customers.
 Human resources development and introduction of new technology towards
modern banking.
 24 hours cash access and safe payment products for high value transaction.
 Having potential to encounter the competitive environment in the market.
 Veteran and experience private management group also involved in other
interests like, textile and cement industry.
 Customer enjoys the services at the residential localities.
 HBL enjoys deep relations with all most all industries in Pakistan

Weaknesses
 There is week communication system in overall HBL as well as inside
branches.
 Highest number of branches effecting the proper maintenance and difficulty
in providing same working environment at the each branch
 Poorer system of recovery of the system is a threat to bankruptcy.
 Lack of customer feedback.

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  Low job satisfaction.
 Poor ATM’s Service
 Inconsistency in efficiency and working atmosphere due to the largest of
branches.
 Sense of insecurity in the employees serving at low profitable branches due
to the downsizing.
 Females feel uneasy in an environment among the male workers.
 Victim of political, legal and socio-cultural pressures
 .Lack of professionalism in the branch employees mostly.

Opportunities
 Huge untapped market potential in consumer banking as well as Islamic
Banking
 Opportunity for developing value added services combined with corporate
banking relationships, cash management services to large and medium sized
corporate clients.

 Growing policies of government on business and commerce sector provide

HBL opportunities to take advantages of these policies to meet efficiently
with the business people to solve their problems with the instant cash and
financing facilities.
 Government is supporting very bold steps of bringing and promoting IT
in Pakistan. HBL has an opportunity to improve in technology.
 Large international network which principally focuses on trade finance with
Pakistan can be utilized to tap trade activities in other markets. In addition,
services such as cross border / offshore financing for corporate customers
can be enhanced.

 Customer feedback on different products and accounts has really improved

the bank performance and encourage the atmosphere for other future
policies.
 HBL also has an opportunity to expand its new technological advancement
more effectively like; phone-banking and internet banking facilities in order to
serve the customer more efficiently, specially

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  E-banking facility is also a new opportunity which is a flourishing business in
foreign countries and can also be here, if HBL takes the initiatives.
 Further reduction in intermediation costs possible, with improving
technology.
 Due to efficient and veteran management group, HBL can also improve and
expand its foreign operation successfully.
 Habib Bank Limited provides opportunity to utilize its skills and efficiencies in
leasing business.

Threats
 Prevailing circumstances increases the difficulties the organization’s
achieving high performance.
 Consolidation in the banking sector resulting in increased competition.

 Shortage of trained and specialized staff at lower executive and officer levels
 The threat of inconsistency and government policy regarding to business and
economics sectors, specially political and regional situation which makes the
environment uncertain.
 Growing global technological advancement.
 Strict regulation by government over credit facilities to the customers as well
as to meet the prudential.
 Loss of confidence of overseas customers due to freezing of accounts.
 Facing more competition by foreign banks in the market.
 Foreign banks are flourishing in field of consumer financing.
 Also the increasing operation of private banks.
 Highly attractive and advance services by foreign banks to their customers.

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CONCLUSION & RECOMMENDATIONS

CONCLUSION

HBL is clearly the first choice of everyone who believes in qualitative approach of
banking an environment of highly responsible people. Bank is enjoying a healthy
market share and taste of good status in terms of its operative features and
customer support. HBL is clearly the best bank operating in Pakistan. Corporate
and commercial functions are distinguished features of HBL experiencing a good
reputation and reasonable mark up with respect to prevailing market mark up
with assurance of satisfaction and support. HBL has more customers as compare
to other banks, if they given proper attention to every customer then in few
years it will be the leading bank of the country (asset point of view)

RECOMMENDATIONS
 There should be authority in every region which ensures efficient flow of
communication and its understanding.
 HBL should immediately take brave steps towards the welfare of experienced
Habibians. In this regard NBP has set best example.
 The management should try to decrease job insecurity among the
employees.
 Training program should be started for internees and newly appointed
employees.
 The bank charges high service charges as compared to the other banks, so
these should be lowered down.
 Surveys must be conducted regarding customer satisfaction level and all
employees of this dept. should look forward to getting feedback whenever
possible.

 Adding of value added features that offer competitive advantage is also a

means of avoiding customer dissatisfaction.

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