Report 1

Habib Bank Ltd.
Internship Report, 2010
Executive Summary
Department of Management Sciences demands every student of BBA/MBA program to go a procedure of 4 to 6 weeks internship course and to present the report based on the observations and work done during the training practice. It is actually the appraisal of any organization currently running its business, having its competitors. It is also meant for discovering the weaknesses and shortcomings and then giving the suggestions for perfection. I have fulfilled my eight weeks internship at Habib Bank Limited, The Islamia University Branch Bahawalpur and tried my level best to achieve something sensibly from this opportunity.
In my internship I opened many accounts of the customers; most of them were the employees of The Islamia University. I also did a lot of work on the pension and salary days. As there is a bunch of crowd on these days so I helped the staff of the bank by filling out the pension forms and then recording the entries in the register of the Pension Records. In this way we winded up the work quickly and in less time.
Department of Management Sciences demands every student of BBA/MBA program to go a procedure of 4 to 6 weeks internship course and to present the report based on the observations and work done during the training practice. It is actually the appraisal of any organization currently running its business, having its competitors. It is also meant for discovering the weaknesses and shortcomings and then giving the suggestions for perfection.
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Habib Bank Ltd. Internship Report, 2010
I have fulfilled my eight weeks internship at Habib Bank Limited, The Islamia University Branch Bahawalpur and tried my level best to achieve something sensibly from this opportunity.
This internship report starts from the introduction on word BANKING and then history of Habib Bank Limited of Pakistan i.e. how it helped the nation and country in any way.
Bank mission and vision statement shows that it focuses on overall performance of bank and quality of service and products.
The main objective of the bank is to realize the real importance of its customers and is profit-oriented.
A bank performs basic functions that are: Accept money as deposit Investing deposits to earn profit Miscellaneous functions
Each branch of the bank is divided into different sections on the basis of these basic functions.
Deposit Section opens different accounts of clients and maintains record of

money deposits from the customer and credited it into his account. It also maintains record of payment to the customer when he presents cheque.
Remittance and Collection Section deals with customers who want to

transfer or collect their money from other city.
Clearance Department deals with the clearance of cheques of other banks and
also the cheques can be cleared at any branch of bank.
I have also given the SWOT Analysis of HBL which shows that the bank as many Strengths and Weaknesses and also with many Opportunities there are numerous Threats as well.
After this I have suggested and recommended how bank can improve its working and flourish.
I also faced some challenges and problems before, during and after my internship in the bank which I have added in the report
In the end I have given conclusion of the entire report.

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INTRODUCTION OF ORGANIZATION
What is Bank?
Bank is an institution which revives money from one party and lends to another party.
There are different views about origin of the word 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.
The bank can be defined as a financial institution that borrows money from one party and lends to the other party (Government, individual, business) and the difference between borrowing and lending make profit for the bank.
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In Simple words we can also say that bank is a pipeline through which money moves into and out of circulation. Bank accepts deposits and repays cash to its customers on demand. The bank borrows money at a lesser rate of interest and lends it to the borrower at a higher rate. 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 many stages.
Why Bank is important?

Bank plays a significant part in the economic existence of nation. The growth of economy is strongly related to the reliability of its banking system. Although banks create no new money but they borrow, exchange and use wealth. In this way they become very valuable partners in the process of economic development.
The fundamental role of bank is to persuade the habit of savings among the people and to activate these savings for investment purposes. Banks serve in capital formation.
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If there are no banks then there would be concentration of capital in few hands and the great fraction of capital of the country would remain inactive.
Loan facility provided by the bank works as an encouragement to the produce to increase production. Banks offer transfer of payment facility, which is cheaper, quicker and safe. These facilities are very much accommodating for the development of commerce and trade.
Types of Banks
Banks are classified according to their field of activity; the main types of banks are as under.
Commercial banks Industrial banks. Agricultural banks Saving banks. Exchange banks.
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Central banks Cooperative bank
Commercial Bank
Commercial bank is occupied in performing the routine duties of banking business. Such bank collects the money from the people (as borrowing) and extends the same money as a loan for development purposes.
Commercial banks are having profit earning concerns. They receive deposits and advance loans to the borrowers. They greatly help in financing for internal and external trade of the country
So we can say that 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. E x a m p l e o f c o m m e r c i a l banks in Pakistan is HBL, UBL etc.
Functions of Commercial Banks:

Today there are more than 7000 branches of commercial banks along with an established network of supplementary financial institutions. The function of a modern commercial bank can be divided under four headings as: Acceptance of deposits Advancement of loans Agency service General utility Service
History of banking in Pakistan

At the time of independence, there were 487 offices of scheduled banks in the territories now constituting Pakistan. Following the announcement of independence plan in June 1947, the Hindus residing in the territories now comprising Pakistan started transferring their registered offices in Pakistan, transferred them to India in order to bring a collapse of the new state. By 30 th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to only 195.
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BANKING IN PAKISTAN
Pakistan has indeed unique banking history commencing as were from scratch at the time of Pakistan of this subcontinent. However it soon comes over its extra ordinary banking problems and by grace of Allah we have a stable banking sector.
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HISTORY
OF
HABIB BANK LIMITED
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Habib Bank Limited

Habib Bank Limited commonly referred to as "HBL" and head-quartered in Habib Bank Plaza, Karachi, Pakistan, is the largest bank in Pakistan. The bank has a network of over 1450 branches in Pakistan and 55 branches worldwide. It has a domestic market share of over 40%. It continues to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers.
Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of financial intermediation while he was campaigning for the creation of a separate homeland for the Muslims of India. He persuaded the Habib family to establish a commercial bank that could serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in 1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000 rupees. The bank played an important role in mobilizing funds from the Muslim community to finance the All-India Muslim League's campaign for the establishment of Pakistan. Habib Bank also played an important role in channeling relief funds to Muslims hurt in the communal riots and violence that preceded the departure of the British from India.
After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General Jinnah, moved its headquarters to Karachi, Pakistan's first capital. This gave Karachi its first commercial bank of the newly formed Pakistan. The Habib family owned and managed the bank until the Pakistan government nationalized it on 1 January 1974.
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HBLs first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary.
On June 13, 2002 Pakistans Privatization Commission announced that the Government of Pakistan had formally granted the Agha Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 204, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees.
It was HBL that introduced products such as Credit Cards, ATMs, Travelers Cheques, etc., to the Pakistani market. Today, Habib Bank is truly the bank of the people, providing its customers convenience and satisfaction all over the world. HBL plays a central role in Pakistan's financial and economic development. Habib Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBLs leadership in Pakistans corporate arena.
Habib Bank offers the basic range of banking services to its customers, to include Commercial, Corporate, Investment, and Retail Banking, Treasury, and Islamic Banking. It has more than 1489 branches all over Pakistan and presence in 26 countries across five continents. With a revamped customer oriented philosophy, we
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are pursuing new avenues of leadership through innovation, as it gear up to face the challenges of the new millennium.
VISION, MISSION & VALUES
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Vision of HBL
Enabling people to progress with a confidence and success.
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Mission of HBL
To be recognized as the leading financial institution of Pakistan and a vibrant international bank in the promising markets, providing our customers with a best set of original products and services, and granting superior values to our stakeholders shareholders, customers and employees.
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Core Values
HBL is absolutely trapped with a business philosophy that incorporate five concrete values which each individual associated with the bank abides by. Our values are the fundamental principles that define our culture and are brought to in our life in our attitudes and behavior. It is our values that make us unique and unmistakable. Our values are defined below:
1) Excellence
This is at the core of everything we do. The markets in which we operate are becoming increasingly competitive, giving our customers an abundance of choice. Only through being the very best - in terms of the service we offer, our products and premises - can we hope to be successful and grow.
2) Integrity
For us, integrity means a synergic approach towards abiding our core values. United with the force of shared values and integrity, we form a network of a well-integrated team.
3) Meritocracy
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At every level, from selection to advancement, we have designed a consistent system of human resource practices, based on objective criteria throughout all the layers of the organization. HBL is therefore, able to achieve a specific level of performance at every layer of the organization.
4) Customer Focus
We understand fully the needs of our customers and adapt our products and services to meet those. We always strive to put the satisfaction of our customers first.
5) Progressiveness
We believe in the advancement of society through the adoption of enlightened working practices, innovative new products and processes, and a spirit of enterprise.
Objectives
The banks main aim is to provide better and efficient services to its domestic and efficient customers and overseas customer regarding the need for improving the financial performance of the company. Next are some of the main objectives of HBL. To get profit for the Bank itself and maximize its shareholders value. To offer solutions for multiple requirements of clients of assorted financial nature. To cope with the changing trends of the modern day financial market.
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To be a diversified bank by offering all basic consumer services along with specialized services Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationship. To provide employment opportunities to people. To help in development and industrialization of the country
ORGANIZATION STRUCTURE
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Domestic Structure
With a domestic system of 1408 trade branches and 17 business branches which are well located in all cities and towns of the country, the bank provides the entire banking services counting consumer and corporate finances, leasing, investment and money market transactions etc.
International Structure
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Through its 15 overseas offices including branches, locally included subsidiaries and joint ventures, the bank has international presence in 26 countries encompassing the United Kingdom, Continental Europe, the Middle East, Southeast and Far East Asia, Africa, Australia, and the United States. Besides providing banking services to the emigrants Pakistanis, these offices also help out in developing linkages between Pakistan and the international financial set-up.
Operational Structure
HBL is among the principal commercial bank of Pakistan. It accounts for a considerable share (40%) of the entire commercial banking market in Pakistan with a set-up of 1,705 domestic branches; 55 overseas branches in 26 countries extend over Europe, the Middle East, Far East, Asia, Africa and the United States; 3 HBL wholly owned subsidiaries explicitly Habib Bank Financial Services (pvt) Ltd. (Karachi), Habib Finance International Ltd. (Hong Kong) and Habib Finance Australia Ltd. (Sydney); 2 joint ventures namely Habib Nigeria Bank Ltd. (40%) and Himalayan Bank Ltd. (20%); and 2 delegate offices in Iran and Egypt.
Retail Banking
Retail banking of HBL consists of trade lending, deposits, and banking services to private individual and small businesses.
Corporate & Commercial Banking
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Consists of business customers and savings banking, includes advices and placements to commercial mergers and acquisitions, underwriting, privatizations, and securitizations.
Ownership Structure
HBL operated under Government possession from 1974-2004. After privatization in 2004, 51% of the banks shares were purchased by the Agha Khan Fund for Economic Development, an organization of the Agha Khan Development Network. The administration of Pakistan is expected to slowly strip its remaining 49% shares in the bank.
Business Segments
A segment is a noticeable constituent of the bank that is occupied in providing product or service (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risk and rewards that are different from those of other segments. The banks primary layout of reporting is based on business segments.
Geographical Segments
The bank operates in five geographic regions, being:
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Pakistan Asia Pacific (including South Asia) Europe North America Middle East Others
Board of Directors
What does Board of Directors do?
To construct the policies in order to support the business of bank.

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Habib Bank Ltd. Internship Report, 2010 To announce the profits on deposits.
To declare the rate of interest on advances and loans. To make the policies for the benefit of bank recruits.
List of Board of Directors

Sultan Ali Allan CHAIRMAN
R. Zakir Mahmood
PRESIDENT & CEO
Mushtaq Malik
DIRECTOR
Ahmad Jawad
DIRECTOR
Yasin Malik
DIRECTOR
Moez Jamal
DIRECTOR
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Management
List of Management
R. Zakir Mahmood Sohail Malik Saima Kamil Nauman K Dar
PRESIDENT & CEO RISK MANAGEMENT CORPORATE BANKING INTL BANKING & CEO HABIB ALLIED INT BANK
Ayaz Ahmad Abid Sattar
CHIEF FINANCIAL OFFICER RETAIL & CONSUMER BANKING
Zafar Aziz Usmani Mudasir K Khan Jamil Iqbal Faizan Mitha Saleem Amlani Aslam Gatit Tulu Islam
HR & ORG DEVELOPMENT GLOBAL OPERATION CHIEF COMPLIANCE OFFICER GLOBAL TREASURY AUDIT & INVESTIGATION ASSET REMEDIAL MANAGEMENT IT & SYSTEMS
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Mirza Saleem Baig Kashif Shah Aly Mustansir
COMMERCIAL BANKING INVESTMENT BANKING BRAND MANAGER
Management Hierarchy
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President
Board of Directors
Member Executive Board
Zonal Chief
Branch Managers
FUNCTIONS AND DEPARTMENTS

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FUNCTIONS OF HBL
Basic Functions
Receiving of money and deposits
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Lending and investing the deposit money Miscellaneous functions
Miscellaneous Functions
Collecting negotiable instruments on behalf of customer. Issuing Letter of Credit for the customer. Receiving values for safe custody. Issuing guarantees and LCs. Utility services. Transfer money from one place to another. Giving there customer life insurances for better future.
Departments of HBL
A variety of departments are working in all the branches of Habib Bank Limited to smooth the progress of banking for the customers. Few of them are:
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1) Account Opening Department:

Account opening is a contract in which customer offers his finances and bank accepts those funds, hence the nature of relation between a banker and customer is of a contractual one and all the conditions pertinent to this agreement act are also applicable.
The essential function of accounts department is to open fresh customers account and assist the customers for the account opening purpose.
A) Types of accounts:
Depositors can open following types of accounts. Current account Profit and Loss account Basic Baking Account
Current Account/Demand Deposit:

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In this category of account the customer is permitted to withdraw or deposit money as and when he likes. Unlike term deposit there is no restriction of withdrawals. The depositor can draw or demand amount money at any time by presenting the cheque in the bank. No revenue or interest is specified on these accounts. These types of accounts are generally maintained by the businessmen who may draw money at any time. Zakat is also not deducted on these accounts and no any notice is necessary for the withdrawal of money. In urbanized and developing countries a very noteworthy amount of money is kept under current account.
Profit and Loss (PLS) Account:

These sorts of accounts are one footstep towards the Islamisation of banking system in Pakistan. Under such accounts bank allows no interest to the customers. Following each six months the executive board of the bank specifies the profit/interest on this account and the rate of profit is declared by the Head Office Habib Bank Limited. On the first of Ramadan Zakat is deducted at the rat of 2.5%. If any customer does want to pay the Zakat form his account then he must give an affidavit that he will give Zakat by himself or he belongs to Fiqah-e-Jafria. Limitation on withdrawal of heavy balances is now abolished. Customer can withdraw heavy amount within the banking hours without giving any notice.
B) Requirements for Opening an Account:

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Habib Bank Ltd. Internship Report, 2010 A copy of ID card of both introducer and customer
Original ID for verification copies of student card for students and appointment letter from the employees of IUB.
If customer use thumbs impression then must give his 3 recent photographs.
Next of kin: the customer must clear that who is responsible for the account in his absence.
Customer must be present at the time of opening the account.
C) How to open an account:

There is a definite official procedure which is to be observed for opening a current or saving account with a Bank. These formalities in brief are as under:
I.
Formal Application:
The customer is to fill an "Account Opening Form. It is a official request by a customer to the bank to permit him to have and manage the current or saving account.
II.
Obtaining Introduction:
The bank previous to opening an account obtains introduction of the customer from an old customer, responsible person etc
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III.
Specimen Signature:
When the Banker is contented about the truthfulness of the customer, he agrees to open the account. The Banker then obtains the specimen signatures of the customer on the signature book or on card.
IV.
Minimum Initial Deposit:
In Pakistan the current account can be opened with a minimum balance of Rs. 500/and PLS Saving Account with a minimum of Rs 100/- These amounts are also the minimum balances to be maintained by the account holders with the bank.
V.
Operating The Account:
When an account is opened in a Bank, the Banker gives to the customer. i. Pay in slip book. ii. Cheque Book and pass book with a view to operate it.
Cheque book:
It is a printed book of blank cheques provided by the bank to its customer for drawing money from their account. Different cheque books are available for the current and PLS account.
Issuance of chequebook:
For issuance of cheque book of a new account, the customer first fills out the requisition slip and submit it to the relevant officer, who in turn will issue chequebook to the customer within 4-5 days or a week. The officer will enter the date, account title, number of leaves, cheque number from start to end, account numer and the
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signature of the applicant on the chequebook issuance register. The officer will also enter the account number on each cheque of the book and in case of photo account ( either having thumb impression or shaky signs) stamp is impressed written All the cheques to be signed in the presence of the bank officer(this stamp is impressed on the cheque books of those people who have shaky signs) Right or left thumb will be affixed in the presence of bank officer (This stamp in impressed on the cheque books of those people who use thumb impressions). And in case of Minors account, every cheque has a stamp impressed written The account will be operated by minor if even minor attains the age of majority.
D)
Withdrawal from an Account:
Withdrawal is done through cheques supplied by the Bank. A new cheque book is issued only on receipts of the requisition slip attached to the cheque book issued earlier and this offered along with the depositor pass book for entire against cheque book challan. Cheque book is issued on prudence of the branch manager.
E) Transfer of an Account:
Account can be transferred to any other branches of Habib Bank Ltd., free of charge. If a shareholder wants to transfer his account, he presents his pass book individually or sends it to Bank and writes a request for the transfer of an account.
F) Closing of an Account:
A shareholder ready to close his account must present his pass book in order that withdrawals and the amount of interest due on the account is entered within and final balance stuck. This balance is then paid to the depositor and his proof of payment is
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taken, the pass book is canceled, unused cheque forms on hand are also surrendered at the same time.
G) Secrecy:
The confidentiality of depositors account is the responsibility of every official engaged in the Bank service.
H) Money Deposited or Drawn by Post:

When currency is sent by post for deposit, the pass book and a letter starting the amount of the deposit and the number of the account escort it. When a depositor desires to withdraw money by post he must forwards his pass book with a letter stating the number of his account, the amount to be drawn and either the money is to be remitted by money- order or in currency notes registered.
2) Remittance Department:
Remittances are arithmetic of money sent in payment for or against something. The remittance department is chiefly concerned with these payments. As it is the responsibility of the bank to pass on the money to any place where there is a bank. Remittance is the chief department of the bank. It is the easiest and safest way to send money to any situate. Remittances are divided into:
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A) Inward Remittance:
Inward remittances refer to payment in goodwill of the banks account holders. Inward remittance includes all cheques received for collection i.e. cheques and drafts received for the payment and clearance or drawn on us from customers or other bank on behalf of their customers are called remittance inward.
B) Outward Remittance:
Outward remittances are the entire payments prepared to other people on behalf of the account holders in the bank. Outward remittances can also be done for nonaccount holders who deposit cash in the bank and remittance tools are prepared for them. In short, all instruments issued by us which are drawn on other branch of the same bank or instrument deposited for collection from other bank locally or out of the city is called remittance outward.
Types of Remittance:
Habib Bank Ltd. Of Pakistan deals with the following types of remittance:
I.
Demand Draft:
Demand draft is the on paper order given by one branch of the bank on the behalf of client to another branch outside the city of the same bank for a certain amount to the certain person. It is the most commonly used method for the remittance of money. It is very simple, firstly a form is to be filled, in which all details are specified that where and in which branch the draft is to be sent then the money is deposited which is called draft and
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money can by drawn after showing to the bank of the specified branch of the bank. Only specified person can draw the money on that draft. Another method to secure the payment of the draft could be the crossing of the draft which means that it will only be deposited in the payees account.
It is unconditional order. The payee is not bound to have an account in the bank. It is issued to rest of the customer and the bank receives the charges and exchange.
II.
Pay Order:
A pay order is on paper order issued by the bank on its own branch, drawn upon and payable by itself to pay a particular sum of the money to the person. The purpose of the pay order is to transfer the funds from one place to another. It is usually not issued in favor of the parties of other cities. Usually the pay order is issued for the local transfer of money between the parties. Pay order is less costly method of relocate money. Normally this method is used to transfer money inside the city. If it is used city wide, it takes a long time.
Procedure of DD and Pay order:

First remittance application form is filled that is etched in annexure of the report. Here the customer is requested to fill update, branch, amount, cheque #, beneficiary details; his complete name, address, CNIC no., account no. and the details of the applicant.
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Customer is asked to submit money on the counter by first filling the pay in slip and required amount is received by customer from the customer. Cash is received by the cashier on counter and he place stamps on the pay in slip and give the receipt to the customer. Then the remittance department will make the DD or pay order and then handed overt to customer.
3) Clearing Department:
Clearing house is a place where ambassador, of all bank get together for the intention of setting the inter bank indebtedness arising from the transmit of deposit by a customer of a particular bank to another bank.
This is a superfluous banking facility which is provided to the community in this if they are maintaining an account with the HBL they can lodge Cheque of any bank in Pakistan, which will be collected and credited to their respective accounts through the course of clearing. In this representatives of various banks are gathered at State Bank of Pakistan and exchanges the Cheque presented to them for debit of the respective accounts and in second round of meeting provide each other the fate of those cheques to be credited to respective accounts.
When people present the Cheque of any other bank for clearing, first enter the Cheque into the clearing register of the bank. Then this Cheque sent to the NIFT for clearing. NIFT is the department which is created by the SBP for clearing the checks of different banks.
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NIFT
National Institutional Facilitations Technologies (Pvt) limited was established in 1997 by the banking giants of Pakistan, i.e. HBL, NBP, ABL, MCB.
NIFT has the blessing and the support of the SBP. It has offices in all the major cities of Pakistan. NIFT facilitates the clearing of cheques between institutions locally (within the city).
It is also referred to as the Automated Clearing House.
NIFT collects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of different banks within city through its carriers and send them to the branches on which these are drawn for clearing. After the branches approve the instruments drawn on them, NIFT prepares a sheet for each branch showing the number for instruments and amount in its favor and drawn on it and sends it to each branch.
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SWOT ANALYSIS
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The short form SWOT stands for an organizations internal Strengths and Weaknesses and its external Opportunities and Threats. The principle of such examination is to assemble on companys strengths in order to take advantage of opportunities and argue against threats and to accurate companys weaknesses. SWOT analysis is based on the supposition that if executives cautiously evaluate such strengths, weaknesses, opportunities, and threats, a valuable approach for making sure managerial accomplishment will become apparent.
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SWOT Analysis of HBL

HBL has very effectual net of branches all over the country. Each 10th Pakistani is account holder of this bank. HBL has made enormous savings in almost all the essential economic sectors of Pakistan. HBL not only has made investment in commerce but also in small scale industry as well. HBL has well-organized & a smaller amount of technical set up. Habib Bank Ltd. has introduced monthly revenue plan that provides almost maximum interest rate. ATM was introduced in Pakistan by Habib Bank Ltd. Master Card facilities are also accessible to the customers.
HBL is measured to be a very sound bank in the financial circles. It is the bank where the clientele can securely keep their money as long as they want.
In SWOT analysis the most excellent strategies accomplish in organizations mission by:
1. Taking advantage of opportunities and strengths. 2. Reducing the effect of its threats and 3. Evading its weaknesses.
Strengths:
A proficiency or potential that facilitates HBL to visualize and put into practice its strategies. The representatives of HBL are considered as one of the most competent professionals in the banking world.
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Habib Bank Ltd. Internship Report, 2010 I noticed that HBL employees cooperate with their clients as if they are their
personal friends and talk about about their problems as their own. Habib Bank Limited has acquired a consistent and easy to use internal computer system. All information regarding the transactions in customers deposits has been automated. HBL uphold its data appropriately. HBL has very good quality security arrangement. HBL is the bigger commercial bank in Pakistan with the system of more than 1439 domestic and international branches.
Being the leading the way of banking in Pakistan, HBL is the oldest and the richest in familiarity.
Habib Bank Ltd. spotlights on consumer banking by rewarding schemes, products and services suiting best to the requirements and demands of the customers.
HBL has opened all its branches at marketable regions so that the customers face no problems in reaching to the bank.
The bank is all the time on the look to get better its services mutually to the domestic as well as overseas customers.
Human resources development and introduction of new technology towards contemporary banking.
24 hours cash access and secure payment products for high value transaction.
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Habib Bank Ltd. Internship Report, 2010 Having prospective to meet the competitive environment in the market.
Customer takes benefit from the services at the housing localities.
Weaknesses:

Maximum number of branches carrying out the proper maintenance and complexity in providing identical working atmosphere at the every branch Inferior organization of revival of the system is a danger to bankruptcy. Be deficient in customer feedback. Little job contentment. Pitiable ATMs Service Irregularity in efficiency and working environment due to the largest of branches. Sense of uncertainty in the employees allocated at little money-making branches due to the down sizing. Females feel nervous in an environment in the middle of the male workers. Prey of political, legal and socio-cultural stress Short of professionalism in the branch employees frequently.
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Opportunities:
Huge available market prospective in consumer banking. An opportunity exists, in shape of opening of ladies banking segment inside the branch which is completely a new idea and it will pull customers towards bank.
Chance for mounting value added services combined with corporate banking relationships, cash management services to large and medium sized corporate clients.
Emergent strategy of government on business and commerce sector provide HBL opportunities to take return of these policies to meet professionally with the business people to solve their problems with the instant cash and investment facilities.
Government is taking very courageous steps to endorse Information Technology in Pakistan. HBL has an opportunity to recover its technology. Huge international net which mainly emphasizes on trade finance with Pakistan can be operated to valve trade activities in other markets. In addition, services such as cross border / offshore financing for corporate customers can be improved.
Customer advice on diverse products and accounts has really improved the bank performance and encouraged the ambiance for other potential policies. Habib Bank Ltd. also has an opportunity to enlarge its new technological expansion like; tele-banking and internet banking facilities in a way to serve the customer more competently.
E-banking facility too is an innovative opportunity which is a prosperous business in foreign countries and can also be here, if HBL takes the step ahead.
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Habib Bank Ltd. Internship Report, 2010 Due to well-organized and expert management group, HBL can also develop
and enlarge its foreign business productively.
Habib Bank Limited provides opportunity to make use of its abilities and efficiencies in leasing business
Threats:

Consolidation in the banking segment ensuing in increased rivalry. Scarcity of qualified and focused personnel at minor managerial and officer stage.
The danger of irregularity and government policy concerning about business and economics sectors, specially political and regional situation which makes the environment doubtful.
Increasing global technological progression. Firm regulation by government over credit conveniences to the customers as poorly as to meet the prudential.
Loss of assurance of out of the country customers due to freezing of accounts. Facing more opposition by overseas banks in the marketplace. Overseas banks are flourishing in field of consumer financing. Also the rising operation of private banks. Highly striking and advance services by overseas banks to their customers.
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Financial Analysis
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1. Return on Assets
FORMULA: Net profit after Tax / Total Assets*100
Year ROA
2005 1.808%
2006 2.138%
2007 1.457%
2008 1.45%
2009 1.55%
2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2005 2006 2007 2008 2009 Yea rs
INTERPRETATION:
ROA measures the overall effectiveness of management in generating profit with its available assets. The higher return on total assets is considered best.
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Return on assets decreased in 2007 onwards and it was on peak in year 2006. This may occurred because of more debt financing in 2006 as compare to years 2007 to 2009 which resulted in declining of net profit and rising of interest cost.
2. Return on Equity:
FORMULA: Net Profit / Equity*100
Year ROE
2005 24.12%
2006 24.18%
2007 16.19%
2008 16.61%
2009 16.1%
25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
INTERPRETATION:
ROE measures the return earned on the common stock holders investment on the firm. Generally the higher the returns the better off are the owners.
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In 2005 and 2006 ROE is very high which indicates that the more efficient management is utilizing the equity base and is giving a better return to its investors. While in the years 2007 and onwards ROE is decreasing this happened may be due to increased issuance of long-term debts.
3. Advances to Deposits:
FORMULA: Year Advances to deposit Advances / Deposits 2005 73.3% 2006 76.11% 2007 71.93% 2008 76.43% 2009 66.60%
78.00% 76.00% 74.00% 72.00% 70.00% 68.00% 66.00% 64.00% 62.00% 60.00%
Yea rs
2005
2006
2007
2008
2009
Interpretation:
This ratio shows advances of the bank as compared to the deposits.
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Loans to deposit show a decreasing trend in alternative year from 2005 to 2009. This shows that the advances of the bank decreased but on the other side bank deposits increased. While in year 2006 and 2008 the advances of bank increased and deposits of bank decreased.
4. Equity to Assets:
FORMULA: Year Equity to assets Equity / Total assets 2005 7.50% 2006 8.84% 2007 9.00% 2008 8.72% 2009 9.64%
10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
The equity to assets ratio shows the profitability and finance of the bank. In 2005 ratio is lowest this means that much of the bank is financed by loans. From 2006 to
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onwards this ratio increased to 9.64% in 2009 showing better financial and profitability position of the bank as approximately all of the long term capital is equity.
5. Deposits to total Liability:

FORMULA: Total deposits / Liabilities
Year 2005 Deposits to 88.56% liability
2006 85.2%
2007 85.0%
2008 87.36%
2009 87.60%
89.00% 88.00% 87.00% 86.00% 85.00% 84.00% 83.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
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This ratio shows the relation between the total deposits and total liability. Its value should be high because deposits of the bank should be high than liabilities. The value is decreasing in year 2006 and 2007 but increasing in 2008 and onwards which is a good sign for the company.
6.
Equity to deposit ratio:
FORMULA:
Year Equity to deposit ratio 2005 9.16%
Equity / Deposits
2006 11.44%
2007 11.72%
2008 10.96%
2009 12.19%
14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
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Interpretation:
This ratio shows the relation between total equity to the total deposit. In 2005 ratio is lowest this means that much of the bank was financed by deposits made to bank rather than equity. From 2006 to onwards this ratio is increasing to 12.19% in 2009 showing better financial and profitable position of the bank as approximately all of the long term capital is equity with less or no deposits involved in the financing of bank.
7. Investment to total assets:

FORMULA: Year 2005 Inv. to total 20% assets Investment / Total Assets 2006 20.13% 2007 25.71% 2008 17.32% 2009 25.06%
30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
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The above ratio shows the relation between the investment and total assets. As the calculation show that for the couple of years the ratio was low but the value has increased in year 2007 and 2009. This means that the investment has increased a lot as compared to the assets.
8.
Advances to Assets:
FORMULA: Year Advances to assets Loans / Total Assets 2005 59.91% 2006 2007 2008 2009
58.8%
55.23%
60.86%
52.64%
65.00% 60.00% 55.00% 50.00% 45.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
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This ratio measures the percentage of funds provided by the creditors. Loan to asset is continuously decreasing except in year 2008. This continuous decrease shows a decrease to the advances of the bank but on the other side the bank assets increase rapidly.
9. Cash to deposit ratio:

FORMULA: Year Cash to deposit ratio 2005 14.99% Cash / Total Deposit 2006 17.92% 2007 15.53% 2008 16.06% 2009 17.61%
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18.00% 17.00% 16.00% 15.00% 14.00% 13.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
Cash to deposit ratio is lowest in 2005 indicating a decrease in cash while in 2006 it is highest showing an increase in cash and decrease in deposits. From 2007 onwards cash is increasing continuously but on other hand deposits of bank is decreasing.
10.
Earning per share:
FORMULA: Profit available to Common Shareholders / No. of Equity Holders
Year EPS
2005 13.86%
2006 18.30%
2007 14.49%
2008 11.83%
2009 14.70%
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20.00% 15.00% 10.00% 5.00% 0.00% 2005 2006 2007 2008 2009 yea rs
Interpretation:
EPS shows the companys profitability. In 2006 company has a maximum EPS it indicates that company is enjoying profits more as compare to year 2007 onwards till 2009 which shows a tremendous decrease in EPS showing adverse effect to the companys profitability.
11. Net
Interest Margin:
Interest Income / Earning Assets 2005 4.91% 2006 1.74% 2007 1.74% 2008 1.86% 2009 1.84%
FORMULA: Year Net Interest Ratio
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5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
Net Interest Margin measures difference between interest income generated by banks or other financial institutions by their lending and interest paid on borrowing. NIM is highest in the year 2005 and then it decreased rapidly in 2006 and onwards. This happened because interest expenses were greater than the amount of returns generated by investments.
12.
Net Profit Margin:
FORMULA: Year Net profit margin
Profit after tax / Total income 2005 32.31% 2006 35.11% 2007 30.33% 2008 27.90% 2009 29.95%
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40.00% 30.00% 20.00% 10.00% 0.00% 2005 2006 2007 2008 2009 Yea rs
Interpretation:
Net profit margin shows how much a firm is earning per dollar of sales. In 2006 company is producing highest net profit of sales i.e. 35.11% than in any other given year. After 2006 the net profit margin is decreasing that is not a good sign for the companys profitability.
RECOMMENDATIONS & SUGGESTIONS

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I spend six weeks of my internship in Habib Bank Ltd, The Islamia University Branch Bahawalpur. During this period I felt as the part of the bank. It was my first experience to work in a banking environment. I had less knowledge about the operations of the bank and its ambiance. This internship gave me an opportunity to learn more about the Banking systems. Based on my experience in HBL I can recommend or suggest them which can help them in short or long-term issues.
So, I will give following suggestions for the better function of the bank:
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It is strongly recommended that HBL must introduce employees training

programs on regular basis. So that employees have awareness about the new developments with the clients.
Habib Bank Ltd. should update all the branches throughout the country as the
banking competition is very tight and they have to make their banking systems quicker and reliable.
Habib Bank Limited even though providing the customer service in better way
but there is a lot of work to be done in a custom banking due to which employees work for stretched duration. Management should reduce the burden of the employees by hiring new qualified staff and trim down the working hours.
If any bad debt comes up, then the bank should recover those debts as soon
as possible so that its financial position should improve.
Branch managers attitude and behavior should be supportive & friendly in

order to entertain the difficulties faced by the workers.
All the additional banks are taking hold of the customers on very high interest
rate presented to the depositors, HBL should also implement some approach to grab the customer and enhance total deposits.
The amount of women employed by Habib Bank Limited is not as much as

compared to male staff, so it should provide work to more women.
Working conditions must be improved for the employees. Immediate feedback to customers inquiries is essential to sustain a healthy
relationship with the customer.
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Top executive should take all the decisions for the promotion of employees on
the basis of their work done in the bank
Supplementary conveniences of loans should be provided to individuals for

enhancing the business, studies etc on simple state of affairs.
For financing actions the procedure should be simple to the customer. The recruitment procedure must be reasonable and clear. Studies must be carried out regarding degree of customer satisfaction and all
employees of this department should look forward to get criticism whenever possible.
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CONCLUSION
Habib Bank Ltd.:
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Habib Bank Ltd. is obviously the first and foremost selection of each and everyone who believes in qualitative approach of banking, an atmosphere of extremely accountable employees. Habib Bank is taking pleasure in a strong market share and enjoying the taste of high-quality standing in terms of its operational features and customer support. Habib Bank Ltd. is undoubtedly the unsurpassed bank operating in Pakistan.
Personal loan is a distinguished feature 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 additional customers as contrast to other banks, if they give appropriate concentration to every customer then in coming few years it will be the principal bank of the country.
I noticed that Habib Bank Ltd. is an economically sound bank. Its proceeds are increasing gradually more years by year. Its personnel are exceptionally good and genuine with the bank. But due to the current economic crash, business of the bank has been reduced.
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Habib Bank Limited views specialization and service brilliancy as the foundation of its policy. The people at Bank understand that innovation, creativity, reliability, customized services and their implementation is the important constituent for their future enlargement.
HBL is aware that they have paced into 21st century and they must get together its challenge by obtaining the maximum level of technology. Thus they will be speeding up their technological advance to facilitate them to deal out their products and services through most professional and high technology way.
Habib bank was among the top banks of the world but in few years it has lost its position. HBL is not giving any progress due to political pressure and instability. Other factors holding back the performance of HBL are unproductive and inefficient management. Last but not the least corruption is the root cause of declining worth of HBL.
Removing these factors will not only retain the worth and place of HBL but also lead it to top ten banks of the world.
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HBL is lacking in conflict management. There are many problems aroused regarding any issue that leads to a conflict; HBL must be having a conflict resolving system in which higher officials must be involved to have a keen and close look on the critical issues. The decision making will become easier and beneficial as the issues are observed by the higher officials. This will result in the decreasing of conflict within the organization resulting in the motivation of workers as they are now working in ethical environment, ultimately this will lead to increased productivity of the bank.
HBL took a great step of introducing mobile banking. But a huge problem HBL is facing is the lack of knowledge of client. Client is unaware of this sort of banking.
HBL can launch an organized marketing program to make its customers aware of their product.
HBL has upgraded its system by installing MISYS to ensure real time banking at its about 300 local and overseas locations.
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Habib Bank, The Islamia University Old Campus Branch:

I want to sum up the pleasant experience I had during my internship program in Habib Bank Limited, The Islamia University Old Campus Branch. I worked in various departments of the bank and got the chance to know about the banking operations.
Pension Forms:
On the first day of internship there was Salary and Pension week was in process. So the bank was crowded with people to get their salaries and pensions.
We were told to help the bank staff by filling the pension forms. It was fun but I had to do it with responsibility. So I and other internees did this work with full enthusiasm. After filling out the forms we were asked to record the entries in the register of Pension Records. We were told that there are two types of pension:
69
1. Personal Pension: The pension which is taken by the worker or employee by himself/herself after he/she is retired from the work it is called PERSONAL PENSION. 2. Family Pension: The pension which is collected by the family i.e. wife, children etc of the employee/worker after his/her death is called FAMILY PENSION.
Every individual is assigned a P.P. no. through which he is given the pension and then the entry is made in the register of the bank to which the pension is paid. I worked in the various departments of the bank. My workings in those areas are as follows:
Account Opening Department:
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This department deals with opening account and saving account for its customer and all matters regarding there off. I opened the current and saving accounts of individual customers only.
We were told that there are five basic steps to open an account of any customer. 1. Add New Customer (ANC) 2. Open Customer Account (OCA) 3. Add Customer Address (CAA) 4. Customers Information (CIM) 5. Know Your Customer (ZYC)
Keeping in mind these steps I opened accounts of many customers. Most of them were the employees of The Islamia University so they wanted to maintain a salaried account with the bank. To open the account the customers were given the account opening form and a specimen signature card to fill. And with these clients were required to give the copy of identity card and employment certificate in case they are employed in any organization.
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After the paper work the information of the customer was entered in the automated system, MYSIS, which then gives the account number for that customer. 14 digit account number is allotted to HBL ac holders. The first four digits are the branch code where ac is going to be opened. Afterwards the next eight digits are customer account serial number and last two digits indicate the type of account.
This account number will be used to carry out different transactions by the customer as the same number will be imprinted on his cheque book.
Account can be OPENED with Minimum Balance Rs.1000/- with no maximum limit.
Deposits Department:
This is the fundamental department of the bank. The entire banking system is based upon borrowing. Like all banks, deposit department has acknowledged its worth as the most important. Almost all the operations generated from the deposit department and with due course of time reflect back to the deposit department. In order to attract funds bank has introduced various types of deposit schemes that may suit the need and tastes of a large number of depositors
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There are three basic types of deposits: 1. Demand Deposits 2. Time Deposits 3. Saving Deposits
Clearing Department:
Clearing is a system by which banks exchange cheques and other negotiable instruments drawn on each other within a specified area and thereby secure payment for their client through the clearing house at specified time in an efficient way.
There are two types of clearing:
Inward Clearing:
A type of clearing in which a bank does payment on the behalf of customer is called Inward Clearing.
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Outward Clearing:
A type of clearing in which a bank collects on the behalf of customer is called Outward Clearing.
Outward Bills for Collection (OBCS)

The cheques, which are sent to their city banks for the local clearing in that city, are called outward bills for collection. I also prepared these OBCs during my internship.
The kinds of clearing are as follows: 1. Normal clearing 2. Same Day clearing 3. Inter-City clearing
Cheque Book:
As told above cheque book is a printed book of blank cheques issued by the bank which is used by customer for further transactions. During my internship I observed the issuance of cheque book.
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In short, Habib Bank Limited is the first choice of the students who want to gain the practical experience of internship. As being the first multinational bank in Pakistan, HBL has always strived to achieve more market share by focusing on the needs of its current and potential customers. In this regard, HBL won THE BANK OF THE YEAR 2009award which is a big achievement for HBLs management and its hard working employees.
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Habib Bank Ltd.

Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Deposit Section opens different accounts of clients and maintains record of

Remittance and Collection Section deals with customers who want to

In the end I have given conclusion of the entire report.

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Why Bank is important?

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Central banks Cooperative bank

Habib Bank Ltd. Internship Report, 2010

Functions of Commercial Banks:

History of banking in Pakistan

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

HABIB BANK LIMITED

Habib Bank Ltd. Internship Report, 2010

Habib Bank Limited

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

VISION, MISSION & VALUES

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Corporate & Commercial Banking

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

To construct the policies in order to support the business of bank.

List of Board of Directors

PRESIDENT & CEO

Habib Bank Ltd. Internship Report, 2010

R. Zakir Mahmood Sohail Malik Saima Kamil Nauman K Dar

Ayaz Ahmad Abid Sattar

CHIEF FINANCIAL OFFICER RETAIL & CONSUMER BANKING

Habib Bank Ltd. Internship Report, 2010

Mirza Saleem Baig Kashif Shah Aly Mustansir

COMMERCIAL BANKING INVESTMENT BANKING BRAND MANAGER

Habib Bank Ltd. Internship Report, 2010

Member Executive Board

FUNCTIONS AND DEPARTMENTS

Habib Bank Ltd. Internship Report, 2010

Habib Bank Ltd. Internship Report, 2010

Lending and investing the deposit money Miscellaneous functions

Habib Bank Ltd. Internship Report, 2010

1) Account Opening Department:

Current Account/Demand Deposit:

Habib Bank Ltd. Internship Report, 2010

Profit and Loss (PLS) Account:

B) Requirements for Opening an Account:

Customer must be present at the time of opening the account.

C) How to open an account:

Habib Bank Ltd. Internship Report, 2010

Minimum Initial Deposit:

Operating The Account:

Habib Bank Ltd. Internship Report, 2010