ACBL Multan

Internship Report Askari Commercial
Bank
Table fo Contens
PREFACE..........................................................................................................4
ACKNOWLEDGEMENT....................................................................................5
Author...............................................................................................................5
INTRODUCTION OF ASKARI COMMERCIAL BANK......................................6
FORMAL DEFINITION OF BANK.....................................................................6
Evolution of Banking. ........................................................................................7
Bank Origin........................................................................................................7
There are different views about origin of the world “Bank”. According to some
people the word “Bank” is derived from the world “Bancus” which means a
“Bench”. They argue their point by this transacted their business of money
exchange on the benches. If the business of any businessman failed, his
bench was destroyed by the people. Due to this practice the word “Bankrupt”
was also used. ..................................................................................................7
On the other hand some people say that the world “Bank” is derived from
German time the word “Bank” was replaced by the word “Bank” which is
called “Banco” in Italian language. ...................................................................7
Evolution of Banking .........................................................................................7
First Stage of Evolution. ...................................................................................8
Second Stage. ..................................................................................................8
Third stage of Evolution. ...................................................................................8
Fourth Stage of Evolution..................................................................................9
Growth of Banking in Pakistan. ......................................................................10
Time of Independence. ...................................................................................10
Establishment of State Bank...........................................................................11
Development of Commercial Bank..................................................................11
Specialized Financial Institutions....................................................................11
Nationalization of Commercial Banks.............................................................12
Privatization of Commercial Banks.................................................................12
COMMERCIAL BANKS...................................................................................13
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COMMERCIAL BANKING SCENARIO IN PAKISTAN ..................................14
ASKARI COMMERCIAL BANK.......................................................................14
CORPORATE FLOW......................................................................................15
ASKARI COMMERCIAL BANK LIMITED MULTAN........................................15
DEPARTMENTS .......................................................................................................16
TYPES OF ACCOUNTS.................................................................................17
CURRENT ACCOUNT....................................................................................18
SAVING ACCOUNT........................................................................................18
ASKARI SPECIAL DEPOSIT ACCOUNTANT................................................18
Interest Rate....................................................................................................19
ASKARI BACHAT ACCOUNT.........................................................................19
TERM DEPOSITS...........................................................................................19
ACCOUNT OPENING PROCEDURE.............................................................21
INDIVIDUAL'S ACCOUNT..............................................................................21
DOCUMENTATION REQUIREMENT.............................................................21
OPERATION...................................................................................................21
JOINT ACCOUNT...........................................................................................22
DOCUMENTATION.........................................................................................23
OPERATION...................................................................................................23
PROPRIETORSHIP ACCOUNT.....................................................................23
DOCUMENTATION REQUIRED....................................................................23
OPERATION...................................................................................................24
PARTNER SHIP ACCOUNT...........................................................................24
DOCUMENTATIONS......................................................................................24
OPERATION...................................................................................................25
LIMITED COMPANY ACCOUNT....................................................................25
DOCUMENTATION REQUIRED....................................................................25
OPERATION...................................................................................................25
LETTER OF THE THANKS ............................................................................26
ISSUING PROCEDURE.............................................................................................26
RECEIVING INWARD CHEQUES................................................................27
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Another responsibility and function of account Opening Department is to
receive Inward cheques for collection of other Banks as well as of ACBL.
Then these cheques are sent to clearing official who clears these checks at
SBP from other banks. Inward bills from collection opposite are IBC number,
their OBC number. Lodge in clearing cheques pending on realization. Cleared
cheques are credited in the bank account. ....................................................27
ENCASHMENT OF CHEQUE ........................................................................27
Closing of Accounts. .......................................................................................29
PROCEDURE..............................................................................................................30
EVERYDAY POSTING....................................................................................30
ATM- CARDS DEPARTMENT........................................................................31
ATM CARD......................................................................................................31
ISSUING PROCEDURE..................................................................................31
ASKARI BACHAT CERTIFICATE ..................................................................32
ACCOUNTS DEPARTMENT..........................................................................34
CHECKING BANK’S DAILY ACTIVITY...........................................................34
INSTRUMENTS OF BILLS & REMITTANCE DEPARTMENT.......................35
CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT...................46
FEATURES OF FOREIGN CURRENCY ACCOUNTS .................................46
CREDIT CARD DEPARTMENT .....................................................................71
PROCEDURE FOR ISSUANCE OF CREDIT CARD.....................................72
ASKARI MASTER CARDS..............................................................................73
ISSUING PROCEDURE .................................................................................74
PROFESSIONALS .........................................................................................74
BUSINESS MAN ............................................................................................75
Land Lord .......................................................................................................76
PAYMENT PROCEDURE ..............................................................................76
TODAY’S POSITION OF BANK......................................................................77
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PREFACE
Internship is an integral part of MBA programme. For the sake of

internship the most initial thing is to have a practical experience.
This effort may get a student to get a practical experience if right
organization is selected. During this internship, a student comes to
particle knowledge. He/she learns what he has so far studied. As
an MBA student I have also done my internship in Askari
Commercial Bank Limited Multan. Here I come to know a different
and very interesting experience of learning and working with
people. First of all I will tell you about Bank then I will tell
operations of different department.
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ACKNOWLEDGEMENT
First and foremost all praise be to Almighty Allah to gave me the

courage and patience to carry out this responsibility successful.
I also wish to tender grateful acknowledgements with profound
respect and gratitude to respected Dr.Muhammad Zaffarullah
director of Institute of management Science for affording us an
excellent opportunity to explore ourselves in the case study of
Macdonald.
We are highly indebted to Mr.Ahasan Iqbal, Sir Zubair Marketing
manager of Macdonald Lahore..
I also feel indebted to all the respected staff of Macdonald
who gave me very effective guidance to make this work
successful.
Author
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INTRODUCTION OF ASKARI
COMMERCIAL BANK
FORMAL DEFINITION OF BANK
Bank is an institution which revives money from one party and
lends to another party.
These are the following types of banks
 Central Bank
 Commercial Bank
 Industrial Bank
 Exchange Bank
 Saving Bank
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Evolution of Banking.
Bank Origin.
There are different views about origin of the world “Bank”.
According to some people the word “Bank” is derived from
the world “Bancus” which means a “Bench”. They argue their
point by this transacted their business of money exchange
on the benches. If the business of any businessman failed,
his bench was destroyed by the people. Due to this practice
the word “Bankrupt” was also used.
On the other hand some people say that the world “Bank” is
derived from German time the word “Bank” was replaced by
the word “Bank” which is called “Banco” in Italian language.
Evolution of Banking
The history of banking evolution is very interesting. In the early
ages human like and wealth was not secure. Due to fear of loot-
mar and theft people buried their wealth under land but this
method was not satisfied. People started to search the custodians
of wealth. The evolution of banking started and it has crossed the
following stages.
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First Stage of Evolution.

After a great struggle people succeeded in finding the reliable
persons to deposit their money and valuable goods for safety.
These people were goldsmiths. These were considered the most
trusted persons due to their sounds financial position. On the other
hand they had a very strong iron safes for keeping gold, money
and other valuable items. People started depositing their gold and
cash in the safe of goldsmiths. Goldsmiths charged something for
this purpose and they returned the depositors their money
whenever they needed banking evolution and goldsmith were the
early bankers.
Second Stage.
During this period those receipts which were issued by the
goldsmiths against the valuables goods were being used as a
medium of exchange by the merchants. People purchased the
various things from the traders against their receipts against the
payments. So the receipts were used like the bank cheque of the
modern age.
Third stage of Evolution.

This period started at that time when goldsmiths came to know by
the experience that people are using their receipts as medium
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exchange and very few people demand their deposits. So they

reach to the conclusion that they may lend some pro9tion of their
total deposits to some other people and they can earn profit.
Goldsmith started the business of lending. They also started
paying interest to attract the depositors of net cash. Now this
business became very profitable, so the traders and money
lenders also jumped in this field.
Fourth Stage of Evolution.

It was started at that tie when people were tempted to deposit
more and more cash to the traders, money lenders and goldsmiths
to earn maximum interest. On other hand number of borrowers
also increased borrowing the money. So for the borrowing and
lending business regular institutions came in to being.
In the present age bank is modernized shape of those institutions.
But to earn more profit every bank started issuing overdraft facility
without maintaining adequate cash reserves to meet the demands
of the depositors. This inability created the financial crises. Now to
maintain the good will of the banks perform their duties. All the
commercial banks perform their duties keeping in view the
instructions of the Central Bank.
Keeping in view the above discussion about the evolution of bank
we can say that it is the result of the different activity of goldsmiths,
merchants and money lenders. They are the real founders of
modern banking business. All the basic functions of modern bank
like accepting are similar with the founders. Now with the changing
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business requirements the secondary functions of banks have

been changing with the passage of time.
Growth of Banking in Pakistan.

The entire banking business was controlled buy the non-Muslims
before the partition of the sub-continent. When Hindues became
sure about the divisions of the sub continent, they secretly began
to transfer their capital to the safe places in India. The funds and
other valuables were transferred to India.
Time of Independence.
Hindues migration from Pakistan to India also caused drain on the
bank deposits. In order to ruin the economy of Pakistan. Hindues
closed down most of the head offices and branches of the
scheduled and non scheduled banks in Pakistan.
At the time of independence there were only two Pakistani banks,
that is Habib Bank and Australasia Bank. At the time, Pakistan had
631 branches of scheduled banks and 411 of no-scheduled banks.
The total deposits of Pakistan banks were Rs. 800 million and
advances were 198 million, the non-scheduled banks number
reduced from 411 to 106 over the same period.
The mass scale withdrawal of deposits closure of branches and
migration caused a deadlock in the banking business in Pakistan.
Keeping in view the above situation government, of Pakistan took
various steps to provide all kinds of facilities to they non-Muslim
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bankers for restoring normal banking facilities but response was

not encouraging.
Establishment of State Bank.

After independence it was not possible Sc-r Pakistan to set up the
Central Bank immediately. The Reserve Bank of India acted as a
Central Bank of Pakistan till 30th September. 1948 But it could not
protect the interests of Pakistan.
To remove the financial difficulties and to establish sound banking
system Govt. established the State Bank on 1st Julv 1948. In the
development, to banking system it played very important role as a
Central bank of the country.
Development of Commercial Bank

New branches were opened in the country with the development of
banking system. These banks also extended their branches to
foreign countries.
Specialized Financial Institutions.

Government of Pakistan established the specialized financial
institutions like ADBP. IDBP. NDFC, PICIC, HBFC. These
financial institutions financed the particular sectors like agriculture,
industry and housing.
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Nationalization of Commercial Banks

In 1974 Government of Pakistan nationalized all the banks. The
weaker banks were merged with the strong banks.
It was argued that these were nationalized So provide fair
distribution of Credit to all the classes of people and remove the
monopoly of few Capitalists over the banking industry.
Privatization of Commercial Banks.

Now government has decided to privatize the Commercial Banks.
The banks are in the process of privatization like other units of the
economy since 1990. This step is taken to provide better banking
facilities lo the public. It was also argued that loans were used as a
political bribe and it destroyed our banking system. People are not
willing to repay the loans despite of all Govt. efforts. So after
privatization private banks will not accept the political pressure and
loans will be issued on merit.
In January. 1991, a privatization Commission was set up and
two Commercial banks namely MCB and ABL were transferred to
private sector. While other banks like HBL and UBL are under the
process of privatization.
In August 1991 government has also allowed the establishment of
new private banks. Now new like Askari Bank, Platinum Bank,
Indus Bank., Mehran Bank, Soneri Bank, Union Bank and Al-Habib
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Bank are established. These banks have established their

branches in all the important cities of the country.
COMMERCIAL BANKS
Commercial banks are companies “which transact business of
banking in Pakistan Commercial banks have constituted the most
important source of institutional credit in the economy of Pakistan.
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COMMERCIAL BANKING SCENARIO IN

PAKISTAN
At the time of independence in 1947, there were 38 scheduled
banks with 195 offices in "Pakistan. But by December 31, 1973
there were 14 scheduled Pakistani Commercial Banks with 3,233
offices all over Pakistan and 74 offices in the foreign countries.
Nationalization of Banks was not done 1st January, 1974 under
the Nationalization Act 1974 due to certain objectives. But it had
negative effects on the efficiency of the banking sector. The
commission transferred many banks to the private sector i.e. MCB
and ABL.
ASKARI COMMERCIAL BANK

The government approved and the established private scheduled
bank in 1990. It is a branch of Army Welfare Organization.
(AWT).in 1992. It has total 30 Branches and spread all over the
Pakistan. Now it is no. 1 private commercial bank. It is so
successful only due to its safe portfolio of lending. It provides a lot
of facilities to its honorable customers. The main cause of its
success is its main concern on quality of services not quantity of
service. Its registered office or head office is at AWT Plaza. The
Mall, Rawalpindi Pakistan.
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CORPORATE FLOW
It the corporate body consists of 12 Board of director including one
chairman
1. President
2. Chief Executive
3. Secretary
4. NIT Nominees
ASKARI COMMERCIAL BANK LIMITED

MULTAN
Askari Commercial Bank Limited Multan was inaugurated on
December 28,1994.
It is located on Abdali Road Opposite to PIA Office. The location is
connected to all the main trade centers in Multan. It is a
prosperous branch streaming towards great achievements.
At the time of its establishment the factored who were considered
are as follows
 Multan is zone covering a large population.

 Multan City is linked to many big cities.
 Agro based area constituting growers and gainers
 Army Offices & Fort Colony
 Educational Institution
The total strength of staff in ACBL Multan is 35. They are

dedicated their work. The branch is progressing rapidly. Under the
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dynamic leadership of Vice President Mr. Tariq Mahmood and

Operational Manager Mr. Zubair Sheikh
DEPARTMENTS
The bank has following department:
 Account Opening department

 ATM Department
 Credit Card Department
 Account Department
 Credit Department
 Remittance Department
 Foreign Trade Department
 Cash Department
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ACCOUNT OPENING DEPARTMENT

Borrowing funds from different sources has become an essential
feature of today's business enterprises. But in the case of a bank
borrowing funds from outside parties is al l the more vital because
the entire banking system is based on it . The borrowed capital of
a bank is much greater their own capital. Banks borrowing is
mostly in the form of deposits. These deposits are lent out to
different parties. Such deposit creation is done through opening an
account in the Bank.
In ACBL Multan Mr. Asif Awan is operating the account opening
department along with performing some auxiliary functions of
Cheque Book Issuing and receiving IBC’s (inward Bills for
Collection).
TYPES OF ACCOUNTS
In ACBL, there are the following types of accounts:
• Current account.
• Saving Account.
• Askari Special Deposit Account.
• Askari Bachat Certificate.
• Term Deposit.
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CURRENT ACCOUNT
In current account there is no interest on it. It is for only transaction
purposes. They are paid on demand. When a banker accepts a
demand deposit, he incurs the obligation of the paying all cheques
drawn against him to the extended of the balance in the account.
As there is no profit paid on this account it is also called chequing
account because cheques can be drawn on it. Current account is
mostly opened for business.
SAVING ACCOUNT
The purpose of this account is to induce the habit of saving
individuals in the neighborhood. The profit is on the basis of 8.5%
per 6 month. The minimum deposit for opening the account is
Rs.100/- (as obvious in the Annexure).
Though individuals open such accounts for saving purpose,
persons belonging to Armed forces and different military
institutions are free to use this account on current basis.
ASKARI SPECIAL DEPOSIT ACCOUNTANT

ASDA account is an interest bearing current account interest is
paid. The payment of return is monthly, where as the rate of return
with aspect to the amount of minimum deposit clear from deposit
schedules in following table). It is also checking account because
cheques can be drawn on it. It is necessary for this account that
the client must maintain a minimum balance of Rs. 50,000 at the
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end of the month. That’s why it is similar to current account. It is

mostly opened by Business but individuals too open this account.
Amount in Rs. Interest Rate

50,000 – 499,999 8%
500,000 – 4.99 9%
million
5 million – 20 million 10%
ASKARI BACHAT ACCOUNT

ABCs are long term fixed deposit for 3 and 5 years. Theses are
not term deposits because payment of return is on monthly basis
rather than on maturity of deposits. The minimum balance
requirement is Rs. 25000/- and maximum balance requirement is
Rs. 1.0 Million. If ABC is for 3-years, the rate of return for 3-years
is 12% if ABCs is for 5-years the rate of return is 13%. Because in
such account the balance is kept for either '3' or '5' years within the
bank no cheque is drawn on it. That is why it is not a checking
account. Return is made monthly.
TERM DEPOSITS
A term deposit is a deposit that is made for a certain periods of
time at the end of the specific period. The customer is allowed to
with draw the principle amount .
ACBL Term deposits are of types clear in the deposit scheme in
the table). One of them is "Askari" Advantage one month. The rate
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of return on this account is 9.75%. The term deposit account vary

one month to 5 years and the min balance requirement is
Rs.5000/- for all following accounts (as clear from Deposit Scheme
in the table ).
Period Interest Rate

One month 9.5%
2nd 9.75%
3rd 10%
6th month 10.5%
One year 11%
2 year 11.5%
3 year 13%
The amount of profit is given to depositors in three ways:

• By cash
• By sending a bank Draft to depositors Home address or
Officers or whichever is specified as mailing Address.
• The amount is credited in any one of the checking Accounts of
the depositor.
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ACCOUNT OPENING PROCEDURE

For the checking accounts (C/A, ASDA, SAVING), there are
different types of account holders are required for all these types
of account holders. The operation /procedure requirement that is
needed for " Individual Account " differ greatly from " Joint account
" proprietorship "Partner ship “, "Limited Company"
and "Club society or Association " as explained below.
INDIVIDUAL'S ACCOUNT
When a single man or women opens an account in his/her own
name and has the right to operate it is called individual Account.
DOCUMENTATION REQUIREMENT
For literate person copy of National Identity Card is required as a
primary requirement. For illiterate person and Veiled Women,
along with the copy of National Identity Card requirement he or
she must come in person for opening the account.
OPERATION
• The person place a "Check Mark " in the type of account and
type of operation required
• He/She fills in part-I of the form , a fix his /her either two or four
similar signature (or thumb expression in the signature space
and get it introduced and signed by a person who already has
an account with the bank and write his account no in the
specific rows in a specific space.
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• The person fills in "next of Kin " position where he/she father,
mother, husband/wife or any other relative's name, his /her
address, phone no and affix his/her signature to certify this
requirement. This requirement is needed because in his/her
absence bank can have correspondence with the specific
person.
• The person put her /his signature (" or thumb expression) on
the signature Specimen Card (SS CARD) similar in the area on
the form. One the back of S.S card mailing address, telephone
no, Person to contact and introducer space is filled in. All these
requirement are necessary for future
• The person deposits the initial amount for opening account on
to the cash counter.
The person put his signature on form -A (check book
requisition) on two places in "authorized signature" and fills in
the "Title of Account space by writing his name.
• If the person put his signature in Urdu or any language other
than English, he signed a "Vernacular form" where under take
that affixed signature are original and his own signature and
two postal size photos are needed.
The next day is the opening of account.
JOINT ACCOUNT
When two or more persons, neither partners, nor trustees, open an
in their name is called joint Account. Husband and wife or two
persons of same sex can open joint account.
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DOCUMENTATION
For joint account copy of National Identity Card of all the persons
is obtained other things remaining same as in individuals account.
OPERATION
• The person checks the type of account and type of operation
required in the respective box on the form.
• The persons fill in the Part-I and part-II in the form.
• Signatures of both persons are obtained on the form in the area
specified for signature and S.S. Card.
• In the title of account space names of all the persons are
mentioned.
• Accounts holder specified in the form that they will operate the
form singly or jointly.
PROPRIETORSHIP ACCOUNT
When an owner of a firm operating singly, opens an account in his
firm name, this account is called a proprietorship Account the
proper himself liable for all his acts.
DOCUMENTATION REQUIRED
For this kind of account, an application for opening the account on
the firm letter -pad (having the firm name) is required along with
the N-I-C- Card of proprietor.
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OPERATION
Al l operation remains the same except that the firm name is
written in the "Title of the Account" area and signature of the
proprietor are affixed in the S.S. Card and the area specified for
signatures on the form.
PARTNER SHIP ACCOUNT

The account is opened in the firm name and all partner designate
one two persons to act on behalf of the partner ship firmer all acts
on behalf of firm. The partners in the partnership firm are liable for
the acts of the firm jointly and severely. Every partner has in a firm
has an implied authority bind his co. partners by drawing and
enclosed cheques.
DOCUMENTATIONS
• Copy of N.I. card of all partners
• Application to open the account on the firm letter pad.
• Partner ship deed in case registered partnership firm.
• Letter showing the implied Authority of one or more partners to
act on behalf of the firm.
• In case of non -registered partnership firm, understanding on
behalf of the firm to remain liable for all acts of the firm.
• Name, address of all partners is written on the pad.
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OPERATION
All other requirement remain same except that the form is dully
signed by all partners cards are signed by all those partners who
will act on behalf of the firm and along filling part-I , Part-Iv is also
filled.
LIMITED COMPANY ACCOUNT

This account is for limited companies. In order to facilitate their
transaction with outside parties, bank provides many facilities.
DOCUMENTATION REQUIRED
• Memorandum of Association.
• Articles of the Association
• Resolution of the Board of Director.
• Certificate of Incorporation.
• Certificate of commencement of business
• N-I-C
OPERATION
The persons authorized in the Resolution of the Board of Directors
put their signatures on S.S Cards. Next of kin "requirement "is not
need in case of a Limited Company. After completing each and
every formality, introducer signature is verified by S.S card and is
stamped "Verified" customer signatures are admitted by stamping
"Admitting" near signature and again signatures on S.S card are
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admitted in the same way. The same process of verification and

admission of the signatures is repeated on Form-A and next of Kin
area.
After completing each and every formality, Accountant is open in
the computer by writing name, address, A/C Number etc.
LETTER OF THE THANKS

At the start of the letter 2nd day, ACBL issues letter of thanks to
"Account Opener" and "Account Introducer" for the trust they have
on ACBL.
OTHER RESPONSIBILITIES
CHEQUE BOOK ISSUING
Check books are issued only for checking account such as current
Account, saving Account and ASDA Account. They are not issued
for other fixed and term deposits because of their Long term
Accounts “nature.”
ISSUING PROCEDURE
 Signatures on cheque – book requisition are verified by
matching with signatures on SS.
 Cheque – book leaves number, account number, account
holder’s name are mentioned in the cheque- book is made
by mentioning the and the total of sum of excise duty and
provincial tax.
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 The name of A/c holder and date of cheque – book issuance

is written on cheque – book requisition the account-opening
officer puts his initials on requisition leave.
 A/c number is stamped over the leaves of cheque – book
and finally authorized person affix his signature over the
debit voucher and cheque book is handed over to the
customer.
RECEIVING INWARD CHEQUES

Another responsibility and function of account Opening
Department is to receive Inward cheques for collection of
other Banks as well as of ACBL. Then these cheques are
sent to clearing official who clears these checks at SBP from
other banks. Inward bills from collection opposite are IBC
number, their OBC number. Lodge in clearing cheques
pending on realization. Cleared cheques are credited in the
bank account.
ENCASHMENT OF CHEQUE
Issuance of Token
After scrutinizing the apparent tenor of cheque a token is issued
to the account holder.
Verification of Signature
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After affixing the two stamps i.e. paid stamp and branch stamp, a
cheque Is sent to the accountant for the verification of signature
from signature specimen card. After authentication a cheque is
sent to cash department
Encashment of Cheque
Cashier pays the amount to token holder after getting back the
token from him.
Deduction of Zakat
Form the profitable accounts zakat is deducted at the rate of Rs.
2.5 % .annually on the outstanding balance of accounts on the first
day of every valuation dale i.e. first day of Ramzan. The Central
zakat Authority (CZA) fixes minimum balance for the deduction of
zakat before the valuation date
Exemption from Zakat

The accounts of foreigners (including Muslims of other nations)
and Pakistani non-Muslims arc exempted from (lie compulsory
deduction of Zakat. The accounts of the followers of Fiqah-e-Jafria
sect are also exempted from the deduction of Zakat after the
submission of affidavit on a legal stamped paper.
Withholding Tax
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Whenever a profit is paid on any deposit it is subjected to the

withholding tax @ 10% annually.
Closing of Accounts.
There are many reasons for closing of account. Some of the more
common reasons are as follows: -
1- Account holder's own request
2- Death of account holder
3- Bankruptcy of account holder

4- Closing of account due to bad demeanor of account
holder etc. An account is .closed at the request of an account
holder or as a result of improper conduct of the account holder or
because of nil balance of the account. In first case account
holder’s request the manager of the Bank to close his account in
black and white.
Account is closed on the written request of the customer ACBL

debits Rs. 100/- as charges for closing the customer account from
that account. The account holder with draws the amount by
writing a cheque and just leaves Rs. 100/- in his account. But to
surrender the cheque book yet if some leaves are yet to be write to
the bank as a necessary requirements for closing the account.
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PROCEDURE
1. The customer for individuals account write an application to the
manager of the bank an a simple paper about the closing of his
account with the bank (In case of proprietor ship partnership
and limited company account the application should be written
an firm or company letter –head)
2. The individual or in case of other type- proprietor firm and
company surrender the cheque book to the bank.
3. The cheque book is then torn from one side and is attached
with the application.
4. In case of Ltd. Company account resolution of the board of
directors is also obtained to attach it with the application.
5. The account opening form of the account holder is taken from
the account-opening file, and the application, cheque book, and
resolution of board of directors in case of limited company
account are attached with the form.
6. Lastly, it is written in “Red Ink on the form that account closed”
and “Date of account closing.”
EVERYDAY POSTING
Following transaction of cheque book is posted:-
Dr_____________ party A/c 25(for 10 leaves)
Cr______________ excises duty on cheque book 20
Cr______________ provincial tax on cheque book 5
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ATM- CARDS DEPARTMENT

This department deals in issuing ATM-Card, term deposits and
Askari Bachat Certificate. Mr. Kamran deals this department.
ATM CARD
ATM – Cards are only issued to Account Holder. Any account
holder of ACBL (current “Saving Value plus Saving Account”) can
obtain ATM card from ACBL with in 15 days. Maximum limit of
daily cash withdrawal is Rs. 10000.
ISSUING PROCEDURE
1. The person, first open the account within the blank.
2. Then he fills the ATM application form in which name of
account holder, account number, address, phone number are
mentioned.
3. Then on the same application form bank officer guides branch
code, application number and signatures are verified by the
bank. Bank manager puts his signatures.
4. After completing this process, the application package is sent to
card centre.
5. Card along with pin code is sent to the branch from the head
office. ACBL head office takes a period of 3-4 weeks for
preparing and processing of ATM – cards. First, list of card
holder is issued and then after 15 days cards are sent to ACBL
issuing branch. The card and list are not sent simultaneously in
order to avoid any mishandling.
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Bank
6. ACBL takes Rs. 200/per year or Rs. 100/semi annual as

charges for a card.
You can deposit money “withdraw” get balance inquiry “transfer
the fund” 24 hours a day at any branch of ACBL which has ATM
facility. ACBL ha shared ATM network with ABN AMRO and HBL.
ASKARI BACHAT CERTIFICATE

The ABC application form is filed and signed. All the requirements
are properly fulfilled. The details are written. The credit voucher is
made against the cash that the customer deposits to the bank. The
certificate is filled according to the specification. The certificate is
then handed over the customer. The entry is made in the ABC
register. The application is then posted in the file.
TERM DEPOSIT
Any person can open a term deposit. He needs not have an
account in the bank.
PROCEDURE
• The customer comes to the bank and specifies the number of
days for which he wants to Deposit hid money in term deposit.
• The credit voucher is made for the amount of cash to be
deposited. The presence of account is not necessary.
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Bank
• The term deposit form is then filled by the officer. The date of
opening, the period, the name of the customer, the signature
etc is all written on the form.
• The term deposit Receipt is filed according. All the
requirements are carried out, the signature of the customer and
the authorized officer, the stamp of the bank etc.
• The term deposit Receipt is then given to the customer.
• The number of the term deposit form and term deposit is noted
receipt is then given to the customer.
• The number of the term deposit form and term deposit receipt is
noted in the term deposit Register.
• After completion of the form, it is posted in the term deposit file.
• A 0.2% tax on the provincial amount is taken while issuing the
receipt.
• A credit voucher made and the amount is credited to the tax on
TD.
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Bank
ACCOUNTS DEPARTMENT
Accounts department is a department which deals and checks all
the activity of all the department .It also deals in expression of
finance of the bank. Salary payment is also one function of the
bank. Mr. Kamran and Miss. Shagufta deal this department.
CHECKING BANK’S DAILY ACTIVITY

Accounts department deals and checks the entire working of the
Branch; all the vouchers that have been posted at the computer
are scrutinized in accounts department. The “End of Day” i.e.
computer print is also received from the computer. The next day
the activity is separated some statements from the “End of Day”.
Then next day activity separated some statements from the “End
of Day”. The vouchers are sorted out head wise. The vouchers are
matched with the entries in the statements.
Any abnormality if occurs, is immediately dealt with. All the
vouchers and instruction are checked individually are checked
individually against the computer printouts. After checking they are
signed by Mr. Kamran and the internal auditor Mr. Shafiq.
OTHER ACTIVITIES
 Preparation of daily bank positions statement
 Payment of salaries
 Preparation of the statements
 Depreciation calculation
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Bank
REMITTANCES DEPARTMENT
Remittance department provides services to the customer of the
bank. The main function of this department is transfer of funds.
Incharge of the department is Mr. Ahmad Feroz.
INSTRUMENTS OF BILLS & REMITTANCE

DEPARTMENT
The instruments that are handled in the B & R department are as
follows:
 Demand Draft.
 Telegraphic transfer.
 Mail transfer.
 Pay order.
 Pay slip.
 OBC.
 IBC.
DEMAND DRAFT
A demand draft is an instrument, which is drawn by one bank upon
another bank for a specific sum of money payable on demand. It is
made by the bank and given to the purchaser against cash or
cheque. If two banks are involved, then one banks sends a DD to
another bank. But in customer - Bank case the customer sends his
DD to the receiver.
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Bank
ISSUANCE PROCEDURE
A demand draft application (Annexure--) to given to the customer,
he fills in a relevant information and signs it.
 The Officer in charge then checks the information form.
 The charges such as commission, excise duty, postage is
charged as per effective schedule of charges. Tax is exempted
if he is taxpayer & knows his No.
 In case of cash deposit the cashier counts he amounts & signs
the DD application and enters it in the register.
 The cash received equals the amount of remittance & the
cheques there on.
 Then the officer of the bills & remittance department signs it
and operation manager counter signs it.
 The entry is made in the DD issuing register.
 It is given to the customer.
 Vouchers are passed.
Commission charges Cr
Excise duty Cr
 The vouchers and the DD form given for posting at the
computer.
 The DD advises are printed at the computer and mailed to the
respective branch.
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Bank
NOTE
On the contra, when a DD is received i.e. a customer comes to us
with the DD, the procedure is as follows.
 The DD credit advice is received through mail. The No’s are
checked & signatures are verified.
 An entry is made on the DD payable register, and the vouchers
are made.
The Branch Dr
DD payable Cr
 The DD credit is attached with the vouchers and given for the
posting at the computer.
 When DD is received, the test No’s are checked, and the
payment is made.
 The vouchers are given for posting. And the entry that was
made in register is closed. i.e. DD payable is Nil.
TELEGRAPHIC TRANSFER
A telegraphic transfer is a fastest & safest way to transfer money.
The message is fixed.
ISSUANCE
 The request for maintenance through T.T is taken on the
standard printed form.
 The customer fills it & signs it.
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Bank
 The Head & remittance department checks it, the charges such
as commission, tax, telex as per effective schedule and signs it.
 If he fills the tax exemption from then no tax is levied.
 Then a neat T.T is made on the white slip. There are 3 copies.
The original faxed to the Branch, one to the Head Office and
one is kept as record.
 The entry is made in the TT issuing register.
 The following vouchers are posted.
Commission Charges Cr
Fax charges Cr
W.H. Tax. Cr
 When commission bill is received, it is attached to the T.T office
copy in the file.
PAYMENTS
 When a T.T arrives, the test numbers are checked and the
signatures are verified.
 The entry is done in the T.T pay able register.
 The following vouchers are prepared & given for posting.
Head Office Dr
T.T Pay able Cr
T.T Payable. Dr
Party A./C. Cr
 If there is no a/c then the T.T receipt needs revenue stamps
and then the payment is made. The T.T receipt is strictly non
negotiable.
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Bank
PAYORDER
It is a cheque drawn by a bank on itself. Pay order is an
instrument in which the parties are involved the purchase, the
bank and the receiver. It can he purchased by any customer. It is
usually made by govt. Bodies. A single bank is included in this
case.
ISSUANCE
 The standard form is given to the customer; he fills in the detail
and signs it.
 The concerned staff checks the form.
 Charges as per effective schedule are applied.
 The cash of the pay order is received.
 A cost memo is signed, stamped and handed over to the
applicant as a receipt.
 Then the pay order receipt is filled accordingly.
 Counter foil is also filled.
 An entry is made in the pay order issued register.
 Then the authorized office after checking the pay order signs it.
 The pay order is then handed over to the application after
obtaining his signature on the P.O form.
A voucher is also made and posted at the computer Cr bills

payable account P.O issued.
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Bank
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Bank
PAYMENT
 On representation of the pay two authorized officers of the
branch sign order receipt the receipt.
 The P.O entry is made in the P.O issued register.
 Then the amount is credited to the account of the customer or
paid in cash.
 The P.O is posted at the computer.
Dr bills payable A/C P.O issued.
PAY SLIP
It is an instrument used by the bank s for its payment. The slips
are issued to the employees of the banks their bills & invoices.
The bills are transferred payments. In this case only one bank is
involved. He is the issuer as well as the payer.
Procedure prescribed for P.O for issuance and payment is
followed for payment is followed for pay slips with the following
expectations.
1. Pay slips are the issued by the bank for the settlements of this
own payment.
2. No excise duty is applicable on P.S.
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Bank
ISSUANCE
 A credit voucher is sent from the accounts dept. to the b debt.
According to the b debt.
 The P.S books is taken out & filled according to the credit
voucher.
 It is entered in the P.S. /P.O register.
 It is signed by, an authorized officer, Operational Manager Mr.
Zubair Sheikh.
 The pay slips is handed to the customer.
 A voucher made and posted payment.
 The P.S. is received on the counter, clearing or transfer.
 On receiving the P.S. if it is transferred in the P.S. register.
 The payment is made and the P.O. is posted at the computer.
 Dr. Bills payable P.S. issued.
If Askari branch is in that city, the OBC forwarding schedule in

sent to that Askari Branch. Otherwise it is addressed to the
particular Branch to whom the cheque belongs.
OUTWARD BILLS FOR COLLECTION

The bills, which are sent to their cities banks for the local clearing
in that city, are called outward bills for collection.
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Bank
PROCEDURE
 The cheques that are banks in other cities are separated.
 They are entered in the OBC register, the number is written on
the stamps.
 The OBC forwarding schedules / (Annexure) are prepared for
the different branches.
 The respective cheques are attached with the schedule.
 Two authorized officers sign the schedule.
 The office copy is filled and the original schedule is mailed.
 On clearance the respective banks send back the OBCS along
with IBCA. Inter branch credit advice.
 The OBC no are checked for the OBC register and the received
any entry is made.
 Charges i.e. commission charges and postages charges are
deducted from the A/C.
Vouchers of following entries are made.
Party A/C Dr
Commission Charges Cr
Postage charges Cr
At the end of the day the contra vouchers are.
OBC collection Dr
OBC lodged Cr
OBC collection Dr
OBC lodged Cr
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Bank
INWARD BILLS FOR COLLECTION

The bills are received from other banks out of city for the local
clearing are called inward bill for collection.
PROCEDURE
 The OBC of the other branches will be the IBC’s of this branch.
So an OBC forwarding schedule is received by mail.
 The cheques are entered in the IBC register. The IBC numbers
are allotted to them.
 The cheques are lodged for clearing.
 After realization, an IBCA is prepared and mailed to the branch.
 At the end of the day two contra vouchers are made & posted.
IBC collection Dr
IBC logged Cr
IBC Collection Dr.
IBC lodged Cr
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Bank
OTHER FUNCTIONS
BALANCING THE REGISTER
At the end of the day, all the registers are balanced with the
computer balances. The heads and checked are as follows.
 DD payable
 IBC collection.
 MT payable.
 OBC lodged.
 OBC Collection.
 TT payable.
 IBC lodged.
 Bills payable. P.S. issued.
 Bills payable P.O. issued.
If the payables are not cleared for a lot of days, a reminder is sent
to the respective branches.
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Bank
FOREIGN TRADE DEPARTMENT

Incharge of the department is Mr. Noor. Foreign trade department
deals in:
 Foreign currency account
 Exports
 Imports
FOREIGN CURRENCY ACCOUNT

Mainly this account deals in individual, personal and companies
account
CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT
There are not hard and fast rules for becoming the Foreign
Currency Account holder. Bank wants only introduction of the
Client and very little about the background. I.D card is also not
necessary, if someone has; well and good, otherwise no restriction
will be there for him.
FEATURES OF FOREIGN CURRENCY ACCOUNTS

There will be legal protection for the account holders.
According to foreign exchange rules and regulation every citizen of
Pakistan, either within the Pakistan or outside the Pakistan, can
open the foreign currency account.
Resident firms and Resident Companies including investment
Banks can open Foreign Currency Accounts.
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Bank
All foreign nationals and foreign Companies in Pakistan or abroad

can open Foreign Currency Accounts.
Opening of Foreign Currency Accounts in the joint names of
residents/non-residents is permissible. Foreign Currency can be
deposited by:
 Remittance received from abroad
 Foreign Currency Notes
There will be no restriction and questioning to him about the
currency, which he wants to deposit that from where he got that
money.
No Zakat will be deducted on these accounts; no Income Tax
deduction, no Wealth Tax deduction will be there.
These incentives reinforce and motivated the people to invest in
foreign currency accounts rather to keep the foreign currency idle.
Foreign currency accounts can easily be transferred from one
person to another, one place to another, with in the ACBL
Branches or in other Bank.
The account holder can transfer the funds freely, in any currency
to any part of the world.
Foreign currency Accounts can be used for payment of purchases
at Duty Free shops.
FACILITIES
This account provides following facilities:
1) Traveling quota
2) Out ward remittances
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Bank
3) In ward remittances receiving

4) To make remittances procedure flexible
EXPORT
Mainly export deals in:
 Negotiation of documents
 Sending the documents for collection
 Pre-shipment financing
 Post-shipment financing
 Remittance against agent commission
 Forward covered booking
 Handling the documents for negotiation according to the
UCP 500 (uniform custom and practices)
 Handling the documents for collection according to URR
(uniform rules for collection)
 E form.
 Internal transactions are through Nostro and Vostro
accounts.
This section helps the exporters to settle the financial affairs
Registration
Who so ever desires to export the goods first of all he has to get
his name, name of firm, or his limited company registered with the
export promotion bureau. After getting registration, the exporter
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Bank
will be allowed to export his commodities. In order to get his name

registered with EPB, he has to submit the following documents.
• Bank certificate, showing that the exporter is account holder
and have a good dealing with us.
• Income tax certificate.
Documentation.
The exporter must submit the following documents to the
negotiation bank.
• Bill of exchange
• Invoices
• Insurance documents
• Bill of loading
As an evidence of dispatch of goods the shipping documentary bill

are indispensable part of documents. It is essential for the shipping
documents to clearly sale the parties. The name and address of
the shipper, the name of consignee. Shipping documents must be
drawn out in prescribed from by valid shipping or airlines.
The quantity, description, weight and packing of the goods should
agree with the invoices documents must also clearly sale the route
that the vessel or airline shall take. The route must be signed and
initials should be appears on it.
Sometimes the buyer through the documentary credit requests the
sellers to certificate of origin and packing list.
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Bank
After submission of the documents to the negotiating bank seller is

bound to receive his payment. The bank on its part to also duly
bound to make the payment however it is only reasonable to allow
the bank sufficient time to scrutinize the documents that exporter
has submitted.
If the bank finds the documents correct then the bank will make
payment to the exporter after confirming with the buyer’s bank.
The necessary documents includes the L/C form normally directly
comes to the exporter and not to the bank. The exporter brings all
these documents comes from foreign banks either through telex or
courier service then the documents are sorted and test is applied
and if it is correct, then stamp of test corrected without
engagement on our part is affixed. After examining the documents,
the advising bank made a scrutiny sheet to check the amount of
L/C as well as amount of bill of exchange etc.
The advising bank certifies From-E after checking the invoices,
L/C and the contract attached with From –E. after certification from
the bank the exporter then goes to the custom authorities and
makes certify form there and finally goes to the port for shipment.
E-Form.
Every exporter is required 10 furnish a declaration to customs
authorities for goods exported. This deceleration is submitted on a
prescribed Form-E in quadruplicate which is certified by the
authorized Dealers.
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Bank
Maintenance of Record of E-Form:

The Stock of E form is provided by the authorized dealers Head
Office to the Exchange dealing branches and the proper record is
maintained in the E-form Stock Register the dealing branches
maintained two registers one for the purpose of issuance of 'E'
form and the other for certification of E-Form.
Issuance of E-Form:
Blank 'E' form in quadruplicate is issued to the exporter having an
account with the branch against little request. In case the exporter
maintains his account at a branch other than the exchange dealing
branch, the request is routed through his branch. Before issue E-
Form it is ensured that the exporter has tendered the attested
photocopies of required documents e.g. valid export registration
corticated, N.I.C., NTN, Challan Copy of renewal few paid. Credit
report of the exporter is also obtained to ensure the credit
worthiness of the exporter. The set of E-Form after completion of
all formalities is then entered in the E-Form issuance register and
acknowledgement is obtained from the exporter or any authorized
person of the exporter.
Certification of E-Form
Before lodgment of E-Form to custom authorities is requested to
be certified by the authorized dealers. When the quadruplicate set
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Bank
of E-Form is presented for certification the same is very minutely

scrutinized and following details are checked
1. Export registration number is correctly mentioned on

the E-Form
2. Signatures of the exporters or his authorized signatory

are duly verified at the counters.
3. E-Form should be correctly and properly filled in

withiest any overwriting unauthentic corrections etc.
The following columns should be properly filled

a) NTR NUMBER, Income Tax Circle, and CCI & E Register
number and date.
NIC number with dale and place of issue.
I) Name and complete address of the exporter along with
Telephone number.
II) Item of export showing quantity and that it is not a
banned item.
III) Value of the: invoice mentioning the currency.
IV) Terms of payment e.g. C+F, C1F or FOB.
V) Country of export (destination) to ensure that the country

where export is made is not a restricted one e.g. Israel.
VI) Term of sale e.g. against Letter of Credit, firm contract or

consignment safe. Whether on sight basis or on usance
basis. It terms is of usance are beyond i20 days, .Stale Bank
of Pakistan permission is also required to be obtained.
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Bank
i) Mode of transportation.
j) Name and address of the foreign buyer (Importer).
Advance Payment
Sometimes the exporter may receive the payment for the item to
be exported in advance without waiting for documents in such a
case the advance payment received for this purpose is required to
be declared by the exporter on the prescribed form. Advance
payment voucher. A proceed certificate is issued to the exporter.
For such payments which is required to be produced at the time of
presentation of documents for negotiation.
Advance payment is certified on the reverse side of ‘E’ from under

the seal and signatures of the authorized dealer which is required
for reporting to the state bank of Pakistan.
CERTIFICATION
After certifying the correctness of the E-' Form certification register

in the folio allocated to each exporter separately. Bank / branch
stamp is filled beneath the duly certified are delivered to the
exporter or his authorized person.
Submission of 'E* Form:
After certification of 'E' form all the four copies are submitted by
the exporter along with shipping bill to (he customs authorities for
clearance (^'consignment. Three copies of ‘E' form are returned by
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Bank
the custom authorities retaining the original after endorsement of

shipment on relative portion on 'E' form. The duplicate copies
retained by the exporter while the duplicate and triplicate copies
are submitted to the authorized dealers along with other
documents for negotiation within 14 days from the date of
shipment. The bank retains the quadruplicate copy for its record
while the duplicate coy is surrendered to State Bank of Pakistan or
realization proceeds.
Utilization of ‘E’ Form
‘E’ form should invariably be utilized and received within 21 days

from the date of certification for 14 days from the date of shipment
failing which the exporter is persuaded to submit without further
delay. In case the exporter does not respond to the requests, the
matter is reported to State Bank of Pakistan.
Cancellation of form ‘E’
‘E’ form is canceled is 2 ways.
1. If goods are not exported and ‘E’ form is not presented to

the customs the authorities, the same is surrendered to
the cancellation which is recorded in the separate file duly
marked ‘canceled’.
2. If ‘E’ form has been tendered to customers authorities but

the goods could not be shipped due to non – availability
of space in shop or due to any other reason, the exporter
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Bank
is required to submit three copes of ‘E’ form along with

original.
Shut out notice duly stamped and certified by customs to the

bank. The bank submits all the three copies along with shut out
notice to the state bank of Pakistan under a covering letter for
cancellation and record at their end.
Collection mechanism explained diagrammatically.
COLLECTION MECHANISM
Sales Contract IMPORTER

EXPORTER
Goods Bill
Bill paid/
Presented
Documents acceptance
Proceeds
and paid
Credit to
exporter’s a/c
Documents COLLECTIONG
REMITTING
BANK
BANK
Proceeds
Remitted
Collection Mechanism Step by Step
Step 1. Exporter and importer conclude sales contract.

Step 2. The exporter ships goods to the importer’s country.
Step 3. The exporter through a covering letter and lodgment
form forwards his bill of exchange along with the
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Bank
supporting commercial and transport documents to the

remitting bank.
Step 4. The remitting bank forwards the documents to its
branch or correspondent bank in the importer’s country
called COLLECTING BANK, under cover of its
collection schedule called the COLLECTION BANK.
Step 5. The collecting bank if it is not the importer’s bank will

forward the documents to the importer’s bank for
presenting them to the importer of payment or
acceptance of the bill of exchange, as the case may
be.
Step 6. The importer pays the sight bill o9r accepts if it is a
usance bill.
Step 7. The collecting bank (or the presenting bank if it is other
than the collecting bank) presents the accepted bill to
the drawee (importer) on the maturity of the bill for
making payment.
Step 8. The collecting bank remits proceeds to the remitting
bank.
Step 9. The remitting bank credits the proceeds to the
exporter’s account.
56
Bank
IMPORT
 Opening the letter of credit
 For issuing the L/C bank requires sufficient funds in the
account of importer.
 Scrutinize the documents receive from flowing bank under
letter of credit. Account to UCP 500 and extending the credit
facility to the importer informs FIM (finance against imported
merchandise) FATR (finance against trust receipt).
 Arrange forward cover booking regarding import payments
 Also arrange forward cover booking for letter of credit open
other then ACBL
 Submission of monthly returns to SBP regarding the import
on form I
CREDIT DEPARTMENT
Credit department deals with the extension of advances to
individuals, companies etc. basic function of credit department is
to extend advances by checking carefully all the documents,
securities necessary for fulfilling the requirements which are
necessary, for extending advances. Incharge of the department is
Mr. Shaukat Babar.
Types of Advances.
i) funded advances
ii) non funded advances
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Bank
Funded Advances
Funded advances are those advances in which funds of banks
are involved.
Funded Advances
Term Finance Revolving Facility
Term Finance.
Main features of term finance are
i) It is for proper time period. May be of one year, two year,
and three year. House building finance is including in term
finance.
ii) Account will be debited only once adjustments are
possible further but account will be debited only once.
Term Finance
Clean Secured
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Bank
Secured Finance.
Financing against Govt. securities i.e. price bonds, defense saving
certificate.
Documents Required.
L/C, demand promissory note, L/G.
Clean Finance.
These funds are extended against personal guarantee for salaries
people.
Documents Required.
LC of Govt. salaries personal, letter of guarantee.
Revolving Facilities.
Proper limit is facility is called summing.
Types of Revolving Facility.

i) Running finance
ii) Cash finance.
Running Finance.
It is extended the business community and Govt. enterprises.
Cash Finance.
Cash finance against tangible securities.
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Bank
Non Funded Advances.

Non funded advances in which bank funds are not involved e.g.
L/C, L/G.
Credits policies & contract guidelines

 Directors determine the commercial credit activity of ACBL
 Delegation of authority to credit committee
Policies are as follows
 Credit principles
 Credit portfolio limits
 Credit approval
 Credit administration
 Credit monitoring
Objectives
 Provision of suitable credit services and products
 extension of credit is out compromising the rules and
regulations
Performance
The advancement shall focus on the development enhancement of
customer relationship
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Bank
Administration
Administration should insure compliance that is all laws and
regulations of regulatory authorities loans / facilities and related
security shall be closely and regularly monitored and reviewed at
the branch level. By a separate unit unconnected it credit approval.
 Total facilities
They must confirm it to the regulatory requirements.
 Term facilities
Aggregate term facilities in excess of one year should not
exceed 30% of the total credit portfolio
 Exposure to customer group

Credit facilities extended any one or group must not exceed the
guidelines currently inforce by the regulatory authorities.
 Unsecured facilities
Similarly the aggregate of all advances to a single person should
not exceed the guideline. Exposure against none funds based
facilities. The aggregate of contingent or non-funds based facilities
should not exceed ten times paid up capital and open all
resources.
 Financing against shares
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Unsecured credit facilities will not be extended towards floatation

of share capital listed companies.
 Conditions
Borrowers liquidity ratio. The current ratio of the borrowers must
be equal to or less then one. The debt to equity ratio should not
exceed 60:40.
 Credit reviews
All limits shall be subject to at least an annual review.
 Credit Approval.
The primary individual factor determining the quality of the bank’s
credit portfolio is the ability of each individual authority. Credit will
be extended in accordance to the authority levels. Approved by the
BOD from time to time.
 Credit risk assessment

Prevention of criminal use of banking channels. Efforts should be
made to determine the true identity of a customer and in case of
cash transactions the source of funds is established.
 Credit administrations
The principle amount of credit add are as follows
• Credit approval
• Credit file maintenance
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Bank
• Facilities evidence
 Credit monitoring and review

 Bank ACBL
 Capital funds
 Credit facilities / extensions
It means granting of financial accommodation or considerations to

a customer, which incur the back in monitory loss in the case of
non payment or non performance by the customer.
 Secured Advances
Pledges, hypothecation, charges or mortgages on tangible readily
realizable assets.
 Security is often an additional security over & above the assets.

For example advance allowed against stock in trade.
 Unsecured / clean
Which are not covered by any tangible security.
 Credit committee
Head office credit committee only
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Bank
Objectives of Lending
In the modem economics, more than 90% business concern raises
their funds from various financial institutions to meet their multifold
transaction. Actually it is very difficult for the modem businessman
to run his business on a huge scale solely. He has to float his
shares to the public or knock the doors of financial institutions, for
example Bank. The most easy way to make fund available to seek
assistance by such agencies including Banks which have got
surplus funds and will to come to the assistance of producing
units, and distributing units, and exchanging units. This is the
primary factor which toads towards lending of money by Banks. No
doubt, we cannot neglect the second factor profit orientation while
running the credit business, the single way for the bank to earn
profit lies in lending money to the customer on comparatively
higher rate to mark-up that it gives to the depositors.
Principles of Lending
Apart from the instructions and directives sent by the state Bank of
Pakistan, Muslim commercial Bank, Ltd. Guided by three basic
principles of profitability, safety, and dispersal.
64
Bank
1. Profitability
The management of Muslim Commercial Bank, ltd. Is very careful
to seek advances where advances can generate a higher return.
Bank has to spend huge amounts on establishment, payment of
profit to depositors, salaries of the staff, other variable expenditure
and to provide a fair return to the share holders, it must therefore,
earn profit.
2. Safety
Safety principle is very important. No one will take a risk of losing
the principle in order to earn profit. So bank will prefer to lend at
lower rates than to risk his money for higher rates. For making his
advances safe, a bank select his borrowers cautiously. Safety
does not necessarily means the taking of security. It would be
wise, not to lend however, good the security be if it is clear that it
will have to be realized for clearance the debt. Safety also employs
the borrower's ability to reply without difficulty. Another aspect of
safety is the lenders legal right to claim repayment from the
borrower.
3. Liquidity and Disposal

In its simple definition liquidity means the easy convertibility of an
asset into cash. But when we speak of liquidity in relation to
advances, it is rather different, It means the adjustment of
advances at a short notices. Bank advances are made in such a
65
Bank
manner that they are repaid in reasonable period so that the bank
can make new advances. Dispersing the advances in reasonable
amount over a large number and types of borrower is necessary to
avoid bid debt, stick up by single or few borrowers. It is therefore,
necessary to advance moderate sums to a large number of
customer engaged in different types of industries.
Selection of Borrowers
The selection of a reasonable and trustworthy borrower is

complicated and at the same time very sensitive task which
requires decision-making power from the bank employees. In the
words of the manager of a branch of Muslim Commercial Bank,
Ltd. "Good selection of borrowers does the half task in the profit of
the Bank. 'Bank do not through money away but every application
is tested carefully before being sanctioned.
To assist the Branch manager in this test, bank provides a

performed, outlining the manner in which a proposal should be put
forward for consideration. If any specific information that is
required is not mention, it affects the proposal as a whole, making
it appear weak or inconvenience, it is therefore, necessary for
credit officers to see that all relevant questions following are, as far
as possible completely and exhaustively answered.
Following are 6'C, S and 3P's, which are considered before

lending:
66
Bank
1. Character
The bank get to know the customer we!! and be able to judge his
intentions, for the bank shall be entering into a contract with him
involving the financing of his business. It is, therefore, common
and business senses to make sure that the other party to this
contract will live up to his obligations, this factor, therefore,
contributes significantly to the safety of the advances, as it relates
to the willingness to repay under all circumstances. Particularly
adverse circumstances. Are the partners or directors of the
business unit, which is seeking finance, persons who can be relied
upon as regards details of their proposal as will as promise of
repayment? What is their reputation in the market place for
meeting their commitments in respect to prices & delivers to
purchasers and timely payment to their trade creditors?
Confidential and tactful inquiries from wholesalers, suppliers and
other bankers are necessary to obtain this essential information.
2. Capacity
This factor relates to the ability of the borrower to manage his
business successfully. Do they have the necessary management,
accounting and technical skills? And the degree of experience, in
the particular line of business for which the finance is required, to
utilize the advance productively and profitably, so that repayment
is possible, along with our share of the profits? This ability can be
judge from the trading results. A study of the company's audited
financial statements for the past few years would real whether
67
Bank
sales have deep growing, stagnating or declining or declining.

Similarly, the trends of gross & net profit margins indicate the
profitability or other wise of the business. The efficiency of the
management can be Judge from the turn-over ratios, collection of
receivable and management of accounts payable.
3. Capital
The proportion of the borrower's own resources to the amount of
finance is requested, is the next point to receive the branch
manager's attention.
Is the amount required in proportion to the borrower's capital and

contribution to the project? Is it within the powers of the borrower?
In the case of a corporate customer, a check on the memorandum
& articles of association is necessary to ensure it is within
prescribed limits. If the amount describe to be borrowed is too
large. Under the circumstances, can it be sagely reduced to an
acceptable & practicable level? Past experience has taught bank
that it is unwise to lend more than is actually required, as it
sometimes has led to speculative uses of the surplus.
4. Cash Flow
The source of repayment should be ascertained at the beginning.
As commercial banks, bank advances must, be largely confirmed
to provide short" term finances to business customer. Hence
financing the current assets of traders and manufactures. Would
68
Bank
ensure that repayment would normally come from the sale of

inventory and the realization of account receivable of our
customers. If we are confident of the customer's ability to buy the
right materials, at right markets and be able to produce finished
goods which can be readily sold, at a satisfactory profit, there
should be no doubt about repayment. Therefore, cash flow
statements and profit projections need to be submitted by the
borrower and carefully evaluated by the credit officers.
5. Conditions
From quantitative and qualitative information the bank need, to
examine the conditions which the firm is operating. This requires
identification of the factors that have up to now contributed to the
success of .the business, and to
Examine factors change has recently occurred or is likely to occur

in the near future which will adversely affect the profitability and
prospects of the customs. Accordingly to nature and prospects of
the customers' business need to examine will it continue to
prosper, or will additional competitors or new competitors with the
latest technology result in reduced profit margins? Is the product
essentially required, in a wide market with continued demand? The
industry conditions and the firm's place in industry and its market
share need to be examined demand? The industry conditions and
the firm's place in the industry and its market share need to be
examined. An important quality here is the management's
69
Bank
tendency to look and think ahead to anticipate and adapt to

change by diversification or otherwise, which will instill confidence
in the banker. For this purpose, it is necessary to maintain &
update at the time of renewing the advances.
6. Collateral
Since the bank is lending money, which it has, received form

depositors, the bank must ensure that there is a second way out.
Security is, therefore, taken as a form of insurance. In case the
business plans of the borrower, do not work out, due to
circumstances or developments beyond his control.
It is the final safe and credit officer should be able to identify
appropriate assets, which would most suitably serve as security, in
the given circumstances. The qualities which constitutes a good
banking security are transferability i.e. whether a valid charge
should be created by the borrower over his asset in favor of the
bank should be such that the bank can obtain a good title with
minimum formality and expense. Its value should be easily
ascertainable and stable. It should be easily realized, in case of
nee. Finally security be obtained & formalities completed before
the finances is disbursed.
7. Purpose
Credit resources are scarce but have alternate uses- The unity's
needs demand that banks put them to the best possible for which
70
Bank
the finance will be used, within the credit policy the bank? In
conformity with the country's laws, credit control and exchange
control requirements. Is it a desirable one from the economic and
banking viewpoint? Is it for productive of emulate purpose?
In short, they're in need to ensure mat the purpose is conductive &

within the borrower's normal sphere of business activities and
scale operations.
8. Period
Short-term advances are favored that is for not more than a year,
renewable each year, if still justified. Accordingly the most usual
purpose is to assist manufacturing and trading customers in their
need to purchase current assets in line with their production or
trading cycle, and seasonal loans for agricultural purposes.
Being a developing country, EBI do grant medium-term loans but

to a limited extent, for the fixed- asset financing need industrial
customers.
CREDIT CARD DEPARTMENT

Mr. Ali Gardezi deals this department. Credit card is also called
Plastic Money. In modern world it is modern mode of money
transaction because it is easy to carry. There are two procedures
for issuing credit cards. One for the existing customers and other
for new customers.
71
Bank
PROCEDURE FOR ISSUANCE OF CREDIT

CARD.
1. Essential documents are obtained from the customer which
are:
a. National ID Card
b. Statement of Accounts of last 3 months.
c. Three Photographs
d. Hypothecation agreement
e. Prove of income.
f. Letter of Lien.
g. Letter of set off.
h. Direct Debt Authority
i. Latest Financials of the Company.
j. Customer Guarantee.
2. American companies are Visa Card and Master Card. ACBL
has the facility of master card only. They have to sent their
credit cards, they have given the authority of master cards to
two banks. First is City Bank and second is Bank of America.
ACBL has the agreement with City Bank. ACBL takes
master card from city bank and then issue to the customer.
3. ACBL takes the yearly fee, interest fee, late payment fee,
credit sale fee for issuance of the card. ACBL also pays
certain percentage to City Bank.
4. City Bank has the authority for the master cards for applying
credit cards, master cards certain limit is mentioned.
72
Bank
ASKARI MASTER CARDS.

1. ACBL is incorporated under the companies ordinance 1984.
Card means applicable master card, visa card issue by the
bank to the account holder. But ACBL is issuing only master
cards.
2. Card center means credit division which is in Rawalpindi.
3. Card holder means primary card applicant.
4. Card account means master card and visa card accounts
opened by the bank for the purpose entering debt.
5. Credit advances means an include any amount sanctioned
and advance by the bank. On the request of card holder the
determination of such cash advance shall however be at the
discretion of the bank.
6. Credit limit means the maximum limit permitted by the bank
on the card account for the applicable card. In ACBL limit is
for 40 days and after 40 days the card holder must have to
pay 10% of the total expenditures. 5 days are grace period.
He told me that the bank is authorized to issue the credit card of

two companies, which are under bank of America.
 Master Card
 Visa Card
But due unavailability of visa card machine in Multan, ACBL
Multan branch deals n only Master Card.
There are following types of master card.
73
Bank
 Silver card
 Gold card
These are different due to their credit amount limit. For example
for silver card, cardholder can take the maximum amount
ranging between Rs. 30,000 to Rs, 200,000. For gold
cardholder this limit has been extended to Rs. 300,000.
ISSUING CHARGES
When the card is given to cardholder, there are certain fee
charges to by the bank, which is different for different cards.
 Local cardholder is charged Rs. 1200 but if the cardholder
is Army officer there is special discount for him. And he is
special charged Rs. 750.
 Silver cardholder is charged Rs. 2500.
 Gold cardholder is charged Rs. 3500.
ISSUING PROCEDURE
Credit card is issued to three types of parties.
 Professional (Govt & private officers)
 Business man
 Landlord.
PROFESSIONALS
For professionals bank require
 Authorized letter from the concerned organization in which
he works. This letter shows all particulars about the person,
74
Bank
on the basis of these particulars; bank open on account and

some feasible amount is required.
BUSINESS MAN
In the case of businessman bank need
 Balance sheet of businessman.
 Type of business.
 Turnover of 5 years.
And then when it is sured that the business has the ability to cover
the expenses of credit card and to pay it at any time, the bank
issues the credit card.
75
Bank
Land Lord
In the case, the person is totally new, and the bank doesn’t know
anything about him. For this bank need an account having the
amount over and above the credit card limit of that credit card.
Usually, there is more chance of default in this case; so, the bank
avoids issuing credit card to that person.
PAYMENT PROCEDURE
The cardholder should have to pay all the amounts what he has
consumed. But in order to facilitate the cardholder, 5% is the
minimum limit that the bank requires and that should be paid
monthly. If you paid only 5% then 2% interests will be charged on
remaining amount and it is added into the next month payments.
If that 5% is not paid then Rs. 100 are the additional charges
charged to the next month payment apart form the 2% interest.
76
Bank
TODAY’S POSITION OF BANK
77
Bank
RECOMMENDATION
During my internship, what I feel should be there are:
 Human Resources Department should be there in order to
motivate and trained the employees. I have noted some
dissatisfaction among the employees, due to in efficient
promoting system. So the bank should provide clean and on
the merit basis promotion system.
 The bank is now over staff. The building under operation is
in adequate for such a large staff. So the building should be
extended
LATTER
78

ACBL Multan

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ACBL Multan

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Internship Report Askari Commercial

Internship is an integral part of MBA programme. For the sake of

First and foremost all praise be to Almighty Allah to gave me the

First Stage of Evolution.

Third stage of Evolution.

exchange and very few people demand their deposits. So they

Fourth Stage of Evolution.

business requirements the secondary functions of banks have

Growth of Banking in Pakistan.

bankers for restoring normal banking facilities but response was

Establishment of State Bank.

Development of Commercial Bank

Specialized Financial Institutions.

Nationalization of Commercial Banks

Privatization of Commercial Banks.

Bank are established. These banks have established their

COMMERCIAL BANKING SCENARIO IN

ASKARI COMMERCIAL BANK

ASKARI COMMERCIAL BANK LIMITED

 Multan is zone covering a large population.

The total strength of staff in ACBL Multan is 35. They are

dynamic leadership of Vice President Mr. Tariq Mahmood and

 Account Opening department

ACCOUNT OPENING DEPARTMENT

ASKARI SPECIAL DEPOSIT ACCOUNTANT

end of the month. That’s why it is similar to current account. It is

Amount in Rs. Interest Rate

ASKARI BACHAT ACCOUNT

of return on this account is 9.75%. The term deposit account vary

Period Interest Rate

The amount of profit is given to depositors in three ways:

ACCOUNT OPENING PROCEDURE

PARTNER SHIP ACCOUNT

LIMITED COMPANY ACCOUNT

admitted in the same way. The same process of verification and

LETTER OF THE THANKS

 The name of A/c holder and date of cheque – book issuance

RECEIVING INWARD CHEQUES

Exemption from Zakat

Whenever a profit is paid on any deposit it is subjected to the

1- Account holder's own request

2- Death of account holder

3- Bankruptcy of account holder

Account is closed on the written request of the customer ACBL

ATM- CARDS DEPARTMENT

6. ACBL takes Rs. 200/per year or Rs. 100/semi annual as

ASKARI BACHAT CERTIFICATE

CHECKING BANK’S DAILY ACTIVITY

INSTRUMENTS OF BILLS & REMITTANCE

A voucher is also made and posted at the computer Cr bills

Dr bills payable A/C P.O issued.

If Askari branch is in that city, the OBC forwarding schedule in

OUTWARD BILLS FOR COLLECTION

Vouchers of following entries are made.

INWARD BILLS FOR COLLECTION

FOREIGN TRADE DEPARTMENT

FOREIGN CURRENCY ACCOUNT

CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT

FEATURES OF FOREIGN CURRENCY ACCOUNTS

All foreign nationals and foreign Companies in Pakistan or abroad

3) In ward remittances receiving

This section helps the exporters to settle the financial affairs

will be allowed to export his commodities. In order to get his name