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An Internship report on

United Bank Limited


Timble Chowk Branch, Gujrat Pakistan.

Submitted by; Sadaf Mehmood Dar Roll no; 220784 Reg. no; 09-PGT-10716

Submitted to;
Mohi-ud-Din Islamic University Nerian Sharif Aj&k Business management department in partial fulfillment of the requirement for the Degree of Master in Business Administration (HRM) Specialization June 2012

Dedication

This report is dedicated to my beloved mother who has loved and taken care of me for all of my life and who taught me is to do my best and to try until succeed.

SADAF MEHMOOD DAR

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Acknowledgement
By the grace of almighty Allah, I have been able to compile my report. Without his help, I cannot accomplish any objectives in my lives. The omnipotent Allah bestows this ability, knowledge, strength and competence required for this report to me as boons. Special acknowledgement to my respected teacher Sir Sheraz Anjum in charge internship program and placement that provide this learning opportunity to complete my internship program and have a great practical experience in the one of the most popular bank of Pakistan United Bank Limited. I am really thankful to my teacher for his guidance for the completion of internship program and to make such report. I am greatly thankful to all the staff of UBL for their corporation, guidance, information and the necessary records which they provided me for the training and preparation of this internship report.

SADAF MEHMOOD DAR

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Letter of Transmittal
TO

The Management & Administrative Sciences MOHI-UD-DIN ISLAMIC UNIVERSITY

Subject:

Submission of Project Report

Dear Sir/Madam: It is a great honor for me to present you the internship report as required for the completion of MBA program. The staff of the UBL Gujrat has been very co-operative with me in providing information regarding the procedures and processes in practice. Due to some legal formalities, I have not been able to gather all the facts and figures about UBL Gujrat. Yet the report is comprehensive one. The practical work during the internship period has been fruitful experience.

Thank you, Project co ordinate Professor Sheraz Anjum ----------------------------Yours truly, --------------------Sadaf Mehmood Dar Roll no; 220784 MBA session 2011-2012

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Executive Summary

Banking operations and services are one of the basic needs of an economy. These include acceptance of deposits and disbursement of advances to individuals and others at higher rates. Banks perform various fundamental factions, which are directly or indirectly contributory towards economic and social development of countries.

UBL, a commercial bank was established in 1959 as result of reckless efforts made by Agha Hassan Abidi. The UBL has shown the fastest growth pattern and in a period of just 27 years became the second largest bank of Pakistan. The bank image however adversely destroyed when it suffered heavy losses during its nationalization period due to political and other factors. The bank is showing reemerging indications as is evident from its financial statements. UBL on October 19, 2002 was privatized and bought by two financially sound parties of international repute i.e. best way group and Abu Dhabi group holding 51% of the banks share and thus has emerged as the largest private bank surpassing MCB.

United Bank Limited is one of the banks playing a very important role in the economic development of Pakistan. Its providing high quality services, manage customer experience efficiently, have comparative advantage due to its innovative technology and provide high profit to its stakeholder. In order to maintain and improve its services in the competitive market UBL Human Resource Department plays a very important role. You will find in this report the complete HR function of UBL. Here is the Vision, Mission statement and the methods followed by UBL for analyzing and evaluating its jobs. How UBL recruit and select new employees. The methods used by UBL training and developing new skills in their employees. The methods used for performance appraisal of its job incumbents. Compensations and benefits provided by UBL to its employees and some other HR Functions.

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Table of Contents
Topic Description
Dedication Acknowledgement Letter of Transmittal Executive Summary Table of Contents

Page no.
2 3 4 5 6_9

1. Introduction to the Report


Introduction Purpose of study Scope of Study Limitation of Study Methodology of Study

10 10 10 11 11 2. Introduction to UBL

Banking history Banking in Pakistan Banking towards Islamization of economy Birth of UBL Number of branches Subsidiaries Objectives of UBL Role of UBL in banking sector Computerization of UBL Earlier Management of UBL

12 12 12_13 13 14 14 14 15 15 16

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3. Company Profile
Vision of UBL Mission of UBL UBL Culture Challenges faced by the organization Functions of UBL Functional Hierarchy

17 17 18 18 19 20 4. UBL Departments

UBL Departments Deposit Department Human Resource Department Advance Department Lockers Department Foreign Exchange Department Clearing Department Billing Department Account Department Computer Department

21 22_23 24_27 28 29 29 30 30 30 31 5. UBL Product & Services

UBL Products UBL Money UBL Chip credit card UBL Business line UBL Address

32 33 33 33 34

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UBL Drive UBL Deposit UBL Services UBL Whiz UBL Netbanking UBL E-statement UBL Hamrah UBL Wallet Remittances UBL ATM Cards UBL Online banking

34 34 35 35 35 36 36 36 36 37 37

6. UBL Branch Analysis


The Group and its Operations Basis of Presentation Branch Hierarchy Significant Accounting Policies Risk Management Concentration of Credits & Deposits Investment Portfolio Financial Analysis 38 38 39 40&41 42 42 43 43_45

7. Qualitative Analysis
Qualitative Analysis of UBL Organizational 46 46

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Departmental UBL SWOT Analysis Strengths Weaknesses Opportunities Threats

46_48 49 49&50 51 52 53

8. Suggestions & Recommendations


Recommendations 54_60

9. Bibliography
Bibliography 61&62

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1. Introduction to the Report

a) Introduction:
Students of MBA studying courses leading to Master degree in business are required to undergo an internship programme of two months duration. This is an essential academic requirement. The internship is followed by comprehensive report writing. This report is properly evaluated on the basis of its description and analytical capabilities by internal and external examiners. I did my internship in United Bank Limited.

b) Purpose of study:
The purpose of the study is to work in real life situation and learn banking practice by doing. In this context its objectives are: i. To analyze banking operations i.e. operational analysis, financial analysis. ii. To develop concrete and feasible recommendations. iii. To improve report writing skills.

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c) Scope of study:
The study is confined to banking operations. An attempt, along with all its limitations, to collect financial data and general statistics of the bank has been made. Keeping in view the purpose of the study, which is to make an acquaintance with practical doings in the bank, this seems a comprehensive effort.

d) Limitation of study:
It is to admit that the study attempts only those aspects, which are closely relevant to the purpose of the study. Facts and figures, which otherwise might be equally important, but not having a direct bearing on the conclusions arrived at this study, have been ignored. The most important limitation from which the study suffers is the non-availability of information in a manner required for analysis and the secrecy of the bank. Another important limitation of the study is time and space constraint.

e) Methodology of study:
Both primary and secondary data were used in compilation of the report. Methodological tools used were:

i. Primary Data:
Personal Observations. Discussion with Bank Personnel.

ii. Secondary Data:


Brochures/ Manuals of the bank. Annual Report State Bank Foreign Exchange Manual Bank internship reports on UBL available in library. Journals, newspapers and books. Internet.

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2. Introduction to UBL
a) Banking history
Consensus on the origination of word Bank is not yet reached at. Some authors opinion is that this word is derived from the words Bancus or Banque, which mean a bench and they further relate banking business inception to Jews in Lombardy. Other authorities state that the word Bank is derived form the German word Back which means Joint Stock fund and later on due to German occupation of Italy, this word was Italianated into Bank. Authors quote Babylonians who developed banking system as early as 2000. B.C

b) Banking in Pakistan
Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were nationalized, in the hope that new era of growth could be achieved through it. However the process is reverse since 1991, up till now MCB, ABL, and UBL have been privatized and HBL is in the process of its privatization.

c) Banking towards Islamization of economy


Interest based transactions/businesses are Haram in Islam. The GOP has shown interest to eliminate interest from its economy by developing various alternatives. To achieve this objective various efforts are made with the following outcomes:

1) Deposits PLS (Modarba) Accounts Current Accounts: (with no return paid)

2) Loans Qarz-e-Hasana Lending on the basis of Service charges

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3) Trade Related Modes of Finances Bai Muajjuai; (purchases of goods by banks and their sale to clients at appropriate mark-up in prices) Bai-Salam; (purchase of goods from clients by banks and their resale to the client at increased prices, to be paid in future) Financing for development of property on the basis of developmental charges. Purchase of trade bills. Ijara: (leasing) Hire purchase.

4) Investment Type of Modes of Finances Musharaka: (financing on the basis of profit and loss sharing) Modaraba: (equity sharing of borrower profit and loss on basis of purchase of Modaraba certificates) Rent sharing. Equity participation through purchase of shares.

d) Birth of UBL
On November 9, 1959, UBL was notified and included as a private schedule bank with authorized capital of Rs. 20 million; issued and paid up capital of Rs. 10 million divided into 1 million shares of Rs. 10/ each. Currently BOD and president/ CEO Mr. Amar Zafar Khan being a member of this newly formed set up manage UBL. Chairman His Highness Shaikh Nahayan Mubarak Al Nahayan and Deputy Chairman Sir Mohammed Anwar Pervez are the two supreme controllers of the banks affairs. Another development is the appointment of director operation, Nauman Hussain by the newly privatized bank. Senior management of the bank is shown in the chart given at the end of chapter.

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e) Number of branches
UBL has a large network of branches, which extends to the remotest areas of the country. In December 1983, there were 1623 branches whereas in 1974 it had only 1238 branches and in October 2003 these figures show total number of 1007 branches. UBL has been very active in increasing its overseas branches network. The first foreign branch was established in London in 1963. Now UBL has branches in Bahrain, Qatar, Saudi Arabia, United Arab Emirates, Yemen Arab Republic, UK, Switzerland, Egypt, Oman and The United States. These branches are playing a significant role in channeling home remittances and foreign trade of Pakistan.

f) Subsidiaries
UBL has four subsidiaries, namely: United National Bank Limited (UNB), UK United Bank AG (Zurich), Switzerland United Executers and trustees Company Limited United Bank Financial Services (Private) Limited

g) Objectives of UBL
The united bank limited sets its goal annually does revision of them and takes monthly feedback. To provide the online facility in every branch of bank. To achieve the goals which are in profit terms Make best efforts to win the trust and confidence of its customers. To offer the varieties of services to meet the requirement of domestic as well as foreign customers. To make it leading bank in banking sector. To adopt modern banking techniques. Operations proficiently assigned by the government. Efficient in providing evening time facilities. 14

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To make sure the provision of home remittance facility to its customers. To get all the branches computerized. Boost the financial sector all over the world particularly in Pakistan.

h) Role of UBL in banking sector


The impressive growth and development, which UBL achieve, present it undoubtedly the most dynamic and progressive. In a very shorter period of time it became one of the leading banks overtaking several other older and its competitor banks. The major contributions the bank has made are enlisted below: Record setting performance and commitment to serve the customers Professional management and modern banking policy Human resource development Small loans (or) micro credits and utility bills collection Pacesetter in economic research established in 1967, department for economic research. Credit cards (unicard-1970) Travelers Cheques (Humarah-1971) Diaries and calendars received prizes too Promotion of sports

i) Computerization of UBL
UBL has taken leading start in the introduction of computers in (1966-1968) in important cities. Its three computers centers Rawalpindi, Lahore and Karachi are equipped with the modern mainframe computers of various capacities. Every branch has been decorated with microcomputers. The use of computers has enabled the bank to save time and efforts raise efficiency and deliver the goods speedily to its customers. This has also allowed the bank to maintain its leadership within the industry.

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Earlier Management of UBL:


Senior Management of UBL

Sheikh Nahayan Mubarak Nahayan chairman Sir Mohammad Anwar Pervez Deputy Chairman Amar Zafar Khan President M.A Manna Deputy CEO Nauman Hussain Director Operations & Utilities Mansoor M. Khan Head Corporate Banking Group Shaharyar Ahmed Head Investment Banking group Shahid Waqar Mehmood Head Commercial bank Aman Aziz Siddique Ali Sameer Chief SAM (domestic) Head International Operations (Dubai) Rukhasana Asghar Global Head Human Resources Ameer Karachiwala Chief financial Office/HCA Risha Moheyuddin Global Treasurer Khalid Munawar-ud-din Head Credit Policy Supervision Muhammad Ejazuddin Audit Chief Mehboob A. Khan

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3. COMPANY PROFILE
a) Vision of UBL

To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof

b) Mission of UBL

The mission of United Bank Limited is to provide the financial services to the general public at the most reasonable rate. To cope out the rapidly changing environment To provide fully modern and atomized services to their customers To provide personalized banking system To mobilize the domestic saving

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c) UBL Culture
United Bank Limited culture is the personality of the organization. Culture is comprised of the assumptions, values, and norms of organization members and their behaviors. The organizational culture of UBL is that it always provides profit to its stakeholder and never misrepresents its financial reports and will never do any unethical act which harms its client and competitor. The employees of UBL will always be helping and friendly with its customers. The norms of UBL are it always follows the Laws of country and maintain its goodwill. The core value for UBL is as follow; Honesty and integrity Fairness and meritocracy Commitment and dedication Teamwork and collaborative spirit Caring and socially responsible

d) Challenges faced by the organization

UBL is a step behind in using new technology as compared to other banks Large and increasing competition. High operating costs and facing recession era Lack of huge deposits

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e) Functions of UBL
The main functions of UBL are listed below Collecting cheques & bills exchange from its customers. Collecting interest due, divided pensions and other sums to customers. Transfer of money from place to place. Acting as executor, trustee or attorneys for the customer. Acting as an executer, trustee or attorneys for the customer. Providing safe custody and facilities to keep jewelry, documents or securities. Issuing of travelers cheques to give credit facilities to travel. Issuing of letter of credit to facilitate imports and export. Accepting bills of exchange on behalf of customers. Purchasing shares for the customers. Undertaking foreign exchange business.

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Functional Hierarchy
Organizational Hierarchy of UBL

Chairman

Deputy Chairman Board of Directors

Executive Committee Managing Director

SEVP EVP

VP

Officer Grade-I

Non Clerical Staff

Clerical Staff

Officer Grade-II

Officer Grade-III

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4. UBL DEPARTMENTS

1. Deposit department 2. Human Resource department 3. Advances department 4. Lockers department 5. Foreign department 6. Clearing department 7. Bills department 8. Account department 9. Computer department

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a) Deposit department
UBL receive money in the following accounts: Current deposit PLS Term Deposit Receipt Foreign currency deposit account PLS Saving Account

1. Current deposits:
This type of account allows the client to deposit or withdraw money as and when he likes. In This if he can deposit and withdraw money several times in a day. Usually, this type of account is opened by businessmen. On this type of account not interest is allowed but the bank deducts service charges. A new rule passed if the money is less then Rs. 10000 then after every month 50 rupee will be detect from the respective account. Only zakat and teacher account are secured from that rule.

2. PLS Term Deposit


If you wish to make a secured long-term investment, UBLs Term Deposit Receipt is the smart choice, just make an investment and see your deposit grow over time. By investing in UBL TDRs: You get an attractive rate of return. Your profit is credited to your account every six months. Your investment is secured .

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3. Foreign Currency Deposit Account


If you wish to make a secured long-term foreign currency investment, UBLs Foreign Currency Term Deposit Receipt is a smart choice, just make an investment and see your deposit grow over time. By investing in UBL TDRs: You get to choose from different range of currencies i.e. US Dollar, British Pound, and Euro etc. You can avail different attractive rates depending on the currency you choose. You get the pleasure of availing the best rate of return in the market. This is what you call value for money. You can open an account in any of the 174 branches offering foreign currency accounts. You get to take your profit home every six months. You get to make a secured investment

4. PLS Saving Account


For all you savers if you choose to keep a deposit in a secured savings account, which also gives an attractive rate of return then UBLs PLS, Savings Account will serve all your financial needs.

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b) Human Resource Department

The most important asset of UBL is its people. To maximize its work force investment, the Aim of the Human Resource department is to enhance the UBL as the best place to work. In the area of Human resources their goal is to maximize the return on the banks annual $4 billion investment in personnel expense by improving efficiency of HR operations. For this purpose and to follow the instructions regarding HR, the department of HR plays an important role. The main functions of this department are to; Assess the need of employees where, ever required. Provide equity opportunities for all the applicants. Select the most appropriate person for the job. For the purpose of selection conduct interviews, tests etc. Provides training opportunities to the employee both on the job and outside job. Motive the employee through the programs adopted by the head office. Evaluate the performance of the employees with the help of their immediate boss. Recommend reward and promotion for the employees. 24

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i. Objectives of the Human Resource Department:


To accomplish the organization goals and support its strategies, HR dept. has the following objectives. To establish employee recruitment and selection system for hiring the best possible employees consistent with the organization needs. To maximize the potential of each employee in order to attain the organization goals and insure individual carrier growth and personal dignity. To retain the employees whose performance helps the organization realize its goals and release those, whose performance is unsatisfactory? To ensure organizational compliance with state and federal laws those are applicable to HR management function.

ii. Recruitment & Selection

Human Resource is the most important assets of the organization. It is with people that quality performance really begins and ends. Recruitment represents first contact that a company has with potential employees. A well-managed and well-planned recruitment effort results in quality applicants. UBL has very well planned and well-managed recruitment process .UBL recruitment process begins with the determination of current and anticipated (short-long term) personnel needs. After it, the requirement of the job is determined by combining the job specifications. They first try to recruit people internally. If the applicants are not available internally then they go for external recruitment.

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iii. Performance Appraisal

Performance appraisal is the process of assessing qualitative and quantitative aspects of an Employees job performance .The UBL performance appraisal process answers the following questions: How well am I doing? How can I do better? How well are our employee doing individually and collectively? The appraisal program of the bank has different methods and different categories for employees. For clerical staff, they are using job description method. For managers they use performance planning and coaching evaluation (PPC & E) programs. It is similar concepts like management by objective.

iv. Performance Planning Coaching and Evaluation (PPC & E)


The Banks PPC &E process is designed to help the employees to work with the manager to improve its contributions to achieve the goals of the unit. The PPC& E have three salient features. The establishment of the performance plans. BY the coaching of manager. The evaluation of the overall combinations. SADAF (REG.NO 09-PGT-10716) 26

v. Subordinate Evaluation
The UBL is using latest performance appraisal techniques. Subordinates evaluation is one of them. These evaluations are used in conjunction with other sources of performance appraisal information.

vi. The bank and Career Development


UBL wants to create an environment that encourages its employees and provides career development paths.

vii. Family Resource Program


The program can help with personal matters ranging from finding childcare to helping older relative who live out of town. The bank has programs to help employees balance work and family life.

viii. Employees Assistance Program


The program provides information and outside referrals to employees and their families may be struggling with personal programs.

ix. UBL Club


The club offers employee opportunities to develop leadership skills network and socialize with co-workers.

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c) Advances Department
There are two types of advances, which UBL provides: FUND BASE ADVANCES NON- FUND BASE ADVANCES

1. Fund base Advances


These are those advances in which actual payment of funds is involved. These funds again have been dividend into two types. Running Finance or Cash Finance: This is a loan, which is provided only to the running businesses to meet their working capital requirements. The bank decides limit on continuing bases. It means that the customer can draw the amount, as much he is required as approved by the bank. He can deposit and withdraw the amount on his

account. The markup is payable on the outstanding amount only. Demand Finance Facility: The bank on demand provides this facility. It means that the bank pays the full amount to the client and mark up is also payable on the full amount. The bank considers the full amount outstanding. The bank provides also facility of loan to its own employees against the security of their immovable property. The rate of mark up on these advances is lesser as compared to the rate of mark up on the other advances.

2. Non- Fund based Advances


There are two types of this loan Issuance of Letter of Credit Issuance of Letter of Guarantee

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d) Lockers Facility Department:


First customer should be account holder in bank. Customer completes locker agreement form. Customers signatures are taken on Locker Hire Agreement. Customers signatures must be stamped with Admitted stamp. Fill the application Access to Locker. Key account is opened in system. Hand over the Key to the customer after key account opened in system. Advance charges collected by the customer. (Charges are taken annually) Registers are maintained annually.

The bank has the locker facility for the convenience of their account holder. The bank provides the four types of lockers, which are small, medium, large and extra larger, (and the charges of the lockers respectively are Rs.500/-, Rs.1000/-, Rs.1500/-, Rs.2000/-, Rs.3000/-.) The bank collect the security when the account holder access the locker which is Rs. 1500/- and when the account lost the key due to own negligence then the account holder will pay the breakage fees to the bank and pay the charges to the lock master. And when customers want to release the account then the account holder fill a form of release of locker no. And withdraw the locker in the presence of custodian and custodians of the locker pay back the security, which the bank kept at the time of locker opening. In the absence of account holder a next of kin or a person who has the power of attorney to operate account of the accountholder if he/she has the proof by court and he/she will prove in the bank by this or her lawyer can open the locker.

e) Foreign & Exchange Department


The main functions of foreign exchange department are: To open the letter of credit (LC) facilitates imports and export. This department also deals with foreign currency accounts. This department deals with inward & outward remittances.

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This department also performs some general functions relating to foreign exchange e.g. private travel exchange quotas, business travel quotas etc.

f) Clearing Department
Every bank acts as both paying as well as collecting bank. A large part of this work is carried out through the bankers clearing house wherever it is established for a bank, following are the requirement of being a member of clearing house: It must be scheduled bank i.e. it is registered by state bank of Pakistan. 50 cheques per day must be drawn on it for continuously three months. It must have account with state bank of Pakistan. Sufficient balance should be in this account. A clearing house is place where representatives of all the banks of the city get together and settle the payments & receipts of cheques drawn on each other

g) Billing Department
A BILL is amount of charges from the seller to buyer. Bills department performs the function of collection of these bills.

h) Account Department
The daily working of all the departments is completed and compile in this department for the preparation of cash cum day book for the ultimate preparation of daily statement of affairs of the branch. In A/C department all the subsidiary ledgers are include maintenance of income and expenditure subsidiary ledgers are prepared. Generals types of statements called by head office are prepared. Income statement and expenditure statement at the end of each month is prepared. If there is any mistake in any record it is checked and removed in A/C department.

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i)

Computer Department
The IT vision is to create a central database linked to all the hubs, through a strong communication backbone, which will allow the customers to maintain one account with the bank and operate it from anywhere in the country. In preparation of numerous applications including the core online retail banking application, UNIBANK's front-end systems were vastly enhanced to a GUI version under Oracle D/2000. The new product UNIBANK2000 has a multi branch facility and runs in a client/server environment. The concept of a universal teller was introduced, which has greatly improved the counter services. More functionality was added like signature verification, printing of remittance instruments, etc. Full Online/Offline computerization of Hubs and off-line computerization of all PLS and CD accounts was achieved during the year. Going forward, UNIBANK 2000 will be installed in all Hub branches by the end of that year. UBL is also working on a value added Internet service, which will provide encrypted Internet access to customers as well as employees.

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5. UBL Product and Services

a) UBL Products
You as an individual can gain and benefit the most through UBL consumer banking. In UBL you get friendly, efficient and attentive personalized banking services. A unique banking relationship experienced by each UBL client. You can utilize the following products. 1. UBL Money 2. UBL Chip Credit Card 3. UBL Business line 4. UBL Address 5. UBL Drive 6. UBL Deposit

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1) UBL Money
UBL Money, the personal installment loan from UBL provides you with power, control, convenience and the flexibility to manage your financial requirements and realize your dreams. UBL Money is a fixed installment loan. It gives you access to funds starting from Rs. 50,000/- up to a maximum of Rs. 500,000/- without any collateral.

2) UBL Credit Card


Welcome to the world of UBL Credit Cards. It is Pakistans 1st chip credit card, which guarantees you both enjoyment and high value. It assures you global acceptability in more than 22 million establishments worldwide in 130 countries and in more than 12, 000 outlets within Pakistan. This unique high tech CHIP guarantees your security while conducting transactions within Pakistan and around the world. CHIP based credit cards have proven to be the most secure way of conducting credit card transactions globally. Win your prizes instantly! Visit selected UBL Chip Reward outlets and get exciting gifts on the spot. The more you visit, the more you get. All you do is dip the Chip to win free meals, free household goods, free electronic items, free clothes and a lot more.

3) UBL business line


UBL Business line a complete solution to all your business financing needs. With UBL business financing facility, you can now take your business to greater and newer heights, and achieve the level of success that you truly deserve. UBL business line is a running finance facility that not only provides funds for growth but also enables you to capitalize on profitable opportunities. With UBL business line, now you will surely say: It is a Credit Line/ OD Facility against residential property. It is an evergreen credit line that the customer can use for his/her business expansion

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4) UBL Address
You have always dreamt of having a permanent address. Now you can turn your dreams into reality with UBL Address - the unique offering that makes you the owner of your home while remaining within your limited income. UBL Address understands your home financing needs and offers you a variety of fixed, floating & adjustable rate options because at UBL, you come first.

5) UBL Drive
Drive is a unique auto-financing product, which offers you feature, options and flexibility unmatched by any other bank, because at UBL, You come first.

6) UBL Deposit
UBL has taken progressive steps and has introduced innovative products and services to provide you a variety of banking and financing services like UBL profit, Business partner, Uni-saver, foreign currency savings and foreign currency term deposits receipts.

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b) UBL Services
UBL has taken progressive steps and has introduced innovative products and services to provide you a variety of banking and financing services. As an individual or a group you can get much through UBL services. You can utilize the following services: 1. UBL WIZ 2. UBL Netbanking 3. UBL e-statement 4. UBL Hamrah 5. UBL wallet 6. Remittances 7. UBL ATM cards 8. UBL online banking

1) UBL Wiz
UBL Wiz is Pakistans first ever prepaid VISA Debit Card that provides the convenience, security and benefits of an ATM and Debit Card, locally and internationally. More than just an ATM card, you can use your UBL Wiz everywhere VISA cards are accepted. Whether you are using it online, paying for petrol, shopping or dining, you are accessing money directly from your prepaid card, without having to visit the bank. It is available is three types. i.e. UBL Wiz Travelers, UBL Wiz Ladies, & UBL Wiz Teen.

2) UBL Net banking


UBL net banking is an internet banking portal offering a simple, convenient and secure method of accessing bank accounts on the internet. It's never been so easy to access and manage your finances in a secure, real-time, online environment; anywhere, anytime. Using UBL net banking, the customers have access to their bank accounts 24 hours a day, 7 days a week and can keep a close eye on their account balances, print account statements, pay bills, transfer funds, track purchases and schedule their recurring payments at the touch of a button and much more.

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3) UBL e-statement
UBL brings a simple solution to all your problems by introducing the UBL e-statements facility. UBL is pleased to announce the launch of the UBL e-statement facility which makes it easier for you to get your statement of accounts and automated transactional debit/ credit alerts right into your inbox. Available for all rupee and foreign currency account holders, you now do not have to wait for six months to receive a paper based statement of your account any more. All you need to do is tell UBL the frequency of statements you require and UBL will ensure that it reaches your inbox.

4) UBL Hamrah
In continuation of the same tradition, UBL in the shape of "Hamrah" rupee travelers cheque enhances this facility for the convenience of its valued customers by offering denominations up to Rs. 10,000. UBL "Hamrah" has been designed keeping in mind, both convenience and security - be it business, property, trade or personal needs. "Hamrah" rupee traveler cheques are the ideal and safest way of carrying cash when travelling anywhere in Pakistan.

5) UBL Wallet
Introducing the new UBL wallet card is now with the international power of VISA. UBL wallet, now with the power and international acceptance of VISA! Your Wallet VISA ATM & Debit Card has all the convenience and security you desire and the quality you deserve. This Wallet holds all the cash in your bank account.

6) Remittances (UBL Tez Raftaar)


Free doorstep remittances within the country or from abroad, UBL offers the most efficient and price competitive service. With our large network of branches, we are poised to offer you service almost at your door step. UBL's new remittance service, Tez Raftaar offers all overseas Pakistanis the fastest and the most convenient delivery of their money to their beneficiaries in Pakistan. Best of all, Tez Raftaar is completely cost free and is available at all UBL branches along the bank's network in the Middle East, UK and US.

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7) UBL ATM Cards


Annual Fee (Rs.) Card Type Gold Silver Daily Limits (Rs.) ATM Withdrawal 40,000 20,000 Debit Card 100,000 50,000 Funds Transfer 500,000 300,000

Primary

Supplementary

500 300

250 150

ATM Location
Karachi Lahore Islamabad Gujrat Quetta Wahcant Rawalpindi Faisalabad Gujranwala Peshawar Sargodha Hyderabad Sukkar Sialkot Abbotabad Muree Multan Raheem Yar Khan Bahawalpur Wazirabad

8) UBL Online Banking


With UBLs state of the art online banking, you can access your account from more than 350 branches located in 71 cities across Pakistan. Your account gets to travel with you and can be accessed throughout Pakistan, be it Karachi, Kotli Main, Nalka Kohala or Mandara. Now UBL enables you to do all the following transactions in minutes through designated online branches. Salient features of online banking are: Cash Deposit and account statement Cheque Encashment Stop Payment

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6. UBL Branch Analysis


a) Introduction
These section efforts have been made to cover all relevant aspects of the financial performance of UBL. Overtime comparison and common size analysis are carried out with the view to extract concrete conclusion to describe financial standing and performance of the bank.

b) The Group and its Operations


The group consists of; i. Holding Company United Bank Limited, Pakistan ii. Subsidiary Companies United National Bank Limited, UK United Bank AG (Zurich), Switzerland United Executers and Trustees Company Limited United Bank Financial Services (Pvt) Limited

c) Basis of Presentation
The purchase and sales of UBL are restricted to the amount of facility actually utilized and the appropriate portion of mark up there on. They strictly observe the rules and regulations as applicable and promulgated by the GOP and or SBP.

Branch hierarchy
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Cheif manager

manager operations

manager international banking

manager credits

Internal audit department

marketing department

accounts department

imports department

leasing department

cash department

exports department

home finance department

account opening department

foreign exchange department

car finance department

remittences department

credit card department

clearing department

d) Significant Accounting Policies


Following are the significant accounting policies of UBL.

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1) Revenue Recognition
Returns on advances and investments are recorded on accrual basis. Debts securities purchased at premium or discount are amortized over their maturity periods. Dividend income is recognized on accrual basis of declaration of dividend up to the year-end. Returns on classified assets are recorded on receipt basis, rescheduled and restructured loans are treated in accordance to SBP regulations. Fees/commissions etc. on letter of credit and others are recorded on accrual basis.

2) Investments
UBL classify its investments as stated below; a) Held for trading b) Held to maturity c) Available for sale-other than the above two types In the light state bank Pakistan regulations quoted securities are shown at market values and any changes arising are taken to profit and loss account only upon actual realization. Unquoted securities are valued at the lower of cost and break up value and difference is charged to income. Provisions for diminution in the values are made after permanent impairment, if any.

3) Lending/Borrowing from Financial Institutions


Sales under Purchase Obligation: These are reflected as liabilities and the charges against these are recorded as an expense on pro rata basis. Purchase under Resale Obligation: The differential of the contracted price and resale price is amortized over the period of their contract and recorded as income.

4) Fixed Assets and Depreciation


a. Owned

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Such assets are showed at their cost or revalued amount less accumulated depreciation and impairment loss, if any. No depreciation is charged on freehold land. Gains and losses on sale of fixed assets are included in income currently, except that the related surplus on revaluation of fixed assets is transferred directly to retained earnings/accumulated losses. b. Leased Assets under financial leases are stated at cost. The outstanding obligations are shown as a liability. The finance charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. c. Foreign Currencies Balances are translated into rupees at the applicable rate of exchange prevailing at the balance sheet date or where applicable at contractual rates. During year transactions are converted into Pak rupees applying the exchange rate at the date of respective transactions. Gains and losses are included in income currently. d. Deferred Cost and Lease Payments These are amortized over a period of five years. Rental obligations under operating leases are charged to profit and loss account as incurred.

5) Taxation
Provision is based on the taxable income for the year or minimum tax computed on the basis of turnover, whichever is higher. The bank accounts for deferred taxation on major timing differences, using the liability method in respect of those timing differences, which may reverse in the foreseeable future. Deferred tax debts are, however, recognized only if there is reasonable expectation of realization of the amount.

e) Risk Management:
The bank is primarily subject to interest rate, credit and currency risks. The bank has designated and implemented a frame work of controls to identify, monitor and manage these risks are as follow;

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1. Currency Risk Management


For the purpose of efficient management of this risk, the group enters into ready, spot, forward and swap transactions in the inter bank market and with the state bank of Pakistan in order to kedge its assets and liabilities and cover its foreign exchange position.

2. Credit Risk Management


The banks major credit risk is concentrated in textile sector. To manage it the bank applies credit limits to its customers and obtains collaterals. Credit risk in the portfolio is monitored by the credit risk management who formulate appropriated policies and procedures to ensure building and maintaining quality credits and efficient credit process. The banks financial institution risk management unit assesses, recommends financial institutions and also controls cross border/country risk.

3. Interest Rate Risk Management


The group is mainly exposed to mark up interest rate risk on its deposit liabilities and its loans and advances and investment portfolios. The asset liability committee of the bank reviews the portfolio of the bank to ensure that risk is managed within acceptable limits. Most of the loans and advances portfolio comprises of working capital, which are reprised on a periodical basis.

f) Concentration of Credit and Deposits


The major class of business for UBL related to advances is the textile and private sectors. UBL is advancing 27.2% to textile and 74.5% to private sector. Majority of the depositors fails in the category of individuals, contributing 65% of the total deposits.

g) Investment Portfolio
UBL employs diversified investment portfolio. The bank invests its funds both in risk free assets as well as in risky assets. This enables it to minimize its unsystematic risk to a great extent.

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h) Financial Analysis
Financial statements are the principal means of reporting the financial condition and results of operations of a business entity. These statements are meant to assist various parties in decision making who are interested in the activities of the business. These statements are means to an end of helping stakeholders in decision-making. To improve the quality of decision making proper analysis of these statements helps a lot. Financial statements analysis helps in determining the financial conditions at any particular points in time and effectiveness of operations of a firm during a specific period. The various stakeholders of business are interested in the analysis of financials statements. But the focus of interest of all is not the same. For example, creditors and credit reporting agencies are interested in finding out the credit worthiness of the firm to which they have extended credit or intend to extend credit. Short term creditors are interested in short term liquidity of the business and long term creditors are interested in the long term cash flow which the firm can generate over the long period of time. Investors are interested in the firms ability to sustain profitability over a period of time. Government agencies analyze financial data for tax purposes. The internal users of financial statements like management also analyze financial data for planning and control.

UNITED BANK LIMITED


Summarized Balance Sheet of Three Years

Rs in '000

Common size (%)

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Assets
Cash/Bal. With Banks lending to F.Is Investment (ST) Advances-Performing (ST) Other Assets Total Current Assets Investment (LT) Advances-Performing (LT)

2009
3609108 4370006 9190430 39489369 8641263 97782157 19388131 28477494

2010
70463707 3627557 33883311 43632117 2641471 118177074 33623058 26423058 5739798 2831534 5026459 73643958

2011
35591280 19050791 29580252 89292490 3509351 177024164 25007413 10312297 3671991 3884990 5486357 48363048 225387212

2009
21.5 2.6 5.5 23.4 5.1 58 11.5 16.89 7.01 1.7 4.92 42 100

2010
17.93 1.89 17.66 22.75 1.38 61.61 17.53 13.77 2.99 1.48 2.62 38.39 100

2011
15.79 8.45 13.12 39.61 1.55 78.54 11.09 4.57 1.62 1.72 2.43 21.45 100

Advances-Non performing (LT) 11813855 Operating fixed Assets Deferred Tax Assets Total L.T Assets Total Assets 2864018 8297500 70840998

168623155 191821032

Liabilities
B/Payables Borrowings ST Deposits Current Lease and Others Total Current Liabilities Fixed Deposits Other Long term Liabilities Total LT Liabilities 1540592 4004130 1847025 174533 2991269 174533 152580240 5933743 161679785 37252204 10883720 48135924 209815709 0.91 2.37 60.83 5.24 69.36 22.98 6.21 29.19 98.55 0.96 0.09 61.6 5.2 67.86 22.94 2.72 25.65 93.52 1.32 0.07 67.69 2.63 71.73 16.52 4.82 21.35 93.09

102568752 118167469 8838842 9986608

116952316 130175635 38747422 21264831 43998916 5212755

49219400 49211671 166171716 179387306

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Total Liability

Shareholder's Equity
Share Capital Reserves Accumulated Losses/Profits Minority Interest Surplus on revaluation 22481680 3960453 5180000 4258947 5180000 4712569 454403 1412932 3811599 15571503 13.33 2.35 2.7 2.22 2.3 2.09 0.2 0.62 1.69 6.9

-27282709 -722387 1168264 2123751 24541439 1271700 2445466 12433726

-16.18 -0.38 0.69 1.26 1.45 0.66 1.27 6.48

Total

7. Qualitative Analysis
a) Qualitative Analysis of UBL

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During my two months of internship period I have tried to fully commit myself in the learning process. I kept critically observing the things that I could analyze and the result of the exercise is presented as below.

1) Organizational
Existing organizational hierarchy hinders vertical communication and blocks flow of information among the levels of management. The workload is not equally distributed. Coordination level among divisions/departments and employees are poor, particularly speaking of between the top and lower levels of management. There is centralization of authority and branch managers are bound and restricted to take initiative. Due to overlapping nature of duties and jobs there exists confusion in branches.

2) Departmental
During my internship period in UBL, in various departments, I noticed following departmental problems. Cash Department i. Not very frequently but there are instances of fake currency notes, being identified. At times notes received from other branches were found to have certain fake currency notes. ii. Counting mistakes occur due to overcrowding particularly during the collection of utility bills. Manual counting system also affects efficiency of the bank. iii. Code of conduct of cashiers is found unsatisfactory. Remittances Department i. Application of tests for authentication of TTs is not known to al concerned individuals that reduces the efficiency and further the wrong application of tests prevent payments and the delay could dissatisfy customers.

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ii. Telegraphic messages require specific skills and training. The employees are partially equipped of such knowledge.

Deposit Department i. Identification of customers signature is very important particularly when cash is to be withdrawn by him. Manual practices pose problems in the branch where automation has not been done yet. ii. In cases where the presence of customer himself is must, is sometime compromised due to influences of\r fear of loss of customer.

Clearing Department i. Wrong endorsement and stamping causes loss to the customers and extra efforts for the bank to repeat the procedures. ii. Reasons for the return of the cheques at times are not mentioned on the return memos. iii. At times due to lack of training wrong stamps are applied on instruments.

Credit Department i. Relationship Managers need to be fully equipped with the requisite knowledge and skills as presently plain BA/B.Sc qualified individuals are performing jobs of MBAs. ii. Large pool of potential borrowers cannot apply for loans due to lack of collaterals. Heavy collateral requirements restrict credit business of the bank. iii. The credit proposal and other documents at times are not properly and sufficiently prepared before taking approval.

Bills Department i. Employees at times mismanage their time and fail to forward bills promptly. SADAF (REG.NO 09-PGT-10716) 47

Foreign Exchange Department i. Problems of bills and remittances departments equally apply to foreign exchange department. There is overlapping of functions and complete separation of function has not been achieved thus leading to a state of confusion and conflict among employees. ii. Knowledge and educational background of employees working in this department do not match with the job they are doing. iii. Most of the employees of this department lack the ability to handle the Letters of Credit.

Marketing Department i. Lack of marketing at desk due to lack of training and awareness among employees. ii. Lack of promotional activities. iii. Little attention to the apparent conditions of the bank exterior, interior layouts and design of furniture in the branch.

b) UBL SWOT Analysis


SWOT is useful tool for providing a framework for analysis of an organization. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a common approach to make assessments in terms of internal and external environment of the organization, and to formulate strategies analyzing its internal strengths and weaknesses, external opportunities and threats, coming up is the SWOT analysis for the UBL. SADAF (REG.NO 09-PGT-10716) 48

1. Strengths:

Strengths are the internal competencies possessed by UBL in comparison with its competitors. UBL with an integrated network gives you direct access to a comprehensive range of better banking facilities to help you monitor your business internationally. It is one of the largest private banks with a deposit base of Rs. 94883/- millions showing constant growth over the period from 2009 till the day. It has a well-knitted and adequately equipped branch networking system that efficiently covers both the domestic and international markets. It is involved in both corporate and retail banking. The bank is actively emerging and is engaged in international trade and foreign exchange transactions. Foreign trade volume showed an increase of 17% over the previous year. Advances investment of the bank shows a constant growth pattern. The current years growth rate is 32%. The overall efficiency of the bank operations and management ability can be noticed by looking at to its income pattern and provisions/write off practices. o Net revenue from funds increased by 18% for the current period. o Provisions decreased by 14%.

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o Total income increased by 16%. UBL is actively participating in international markets and has recently introduced credit cards in UAE, Behrain, and Qatar, being backed up by 24 hours call center out of UAE. The bank is owned by parties of financial repute and credit worthiness like, state bank of Pakistan with 48.69% interest, Best Way group and Abu Dubai group with 25.50% of interest each. Others are GOP, NBP Trustee Department, State Life Insurance Corporation etc. The bank is run by highly professional recruited from and trained by foreign banks like City Bank.

2.

Weaknesses:

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Weaknesses are the internal attributes of the bank to decrease in comparison with competing bank. Due to risks such as political, economic and legal etc the bank has suffered losses the main reason was that of piling up of large amount of unrecoverable loans and debts which has adversely affected the image of the UBL. Accumulated losses pushed the bank to cut down its promotional activities in order to reduce expenses for last few years. During the nationalization life span of the bank political lords used influence in bank business and selection of employee at each level and thus adversely affected the banks efficiency and effectiveness. Administrative expenses are 51% of the mark up revenue. Promotions are carried out on annual basis ignoring the importance of capabilities and performance outputs. The bank has large number of employees who are simple graduates with no banking knowledge. Ineffective system of recruiting and selection. Lengthy credit processing and documentation procedures. Unsatisfactory working conditions.

3. Opportunities
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An opportunity is an external component lies in outside the organization. They would be beneficial for the company. An opportunity is any chance to follow a new or revised strategy or business, which would be of benefit to the UBL. The efficiency of stock market and sound exchange reserve level is providing a good opportunity for effective investment decisions. Foreign remittances are another area as present world wide control systems over transfer of currencies through illegal channels has facilitated the area for the banks. Reconstruction of Afghanistan is a golden opportunity where the bank can effectively participate. Expansion of IT platform and internet based banking system. Interest of businesses in leasing facilities provides a healthy opportunity for banks. There is a large pool of unemployed MBAs who can be hired to achieve professionalism on its organizational culture. Outsourcing of promotional companies or use of available excellent promotional facilities. Entering new market segments. Increase the product range to meet the broader range of customers needs.

4. Threats
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Threats are also external factors in the environment, which are not in the favor of company, which can seriously hamper the companys ability to serve its customers. An Increase in competition due to increasing number of foreign and domestic private banks offering highly specialized and attractive services. Growing global technological advancements and adaptation of modern style of management in banking sectors. Extensive promotion campaigns run by competitors. Unemployment, lower level of income and prices like problems in the motherland coupled with low rate of industrialization, geo political adverse conditions, religious factor, and lack of consistency in policies due to political instability are some of the other major threats. This SWOT analysis is a mirror image of the banks present conditions. Some efforts are made and others are still required to be made in order to improve the situation. The management can develop elaborate strategic plans for capitalizing the available opportunities. The bank should maintain principal of professional management and adhere to sound and sophisticated banking rules and regulations so that confidence and trust of the public in the institutions could be re earned.

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8. Suggestions & Recommendations

Recommendations
Recommendations are considered to be the most important part of an internship report, without which no report is considered complete and meaningful. This part of the report is based on the previous sections i.e. analysis. Moreover, for bringing suggestions, discussions have been conducted with the staff of UBL officers, who not only provided the basis for recommendations but also pointed out some areas, where the change for the development is utmost important. Realizing the importance of this section, efforts have been made to give feasible recommendations, which are categorized under the following headings. The following are the suggestions that I have recommend for the united bank limited. The behavior with the customers should be improved. There is a great need of proper training of employees. Because when ever they were asked about the latest banking the answer was sorry we dont know. Like the other reputed commercial banks UBL should recruited some officers especially from the fresh MBAs and M.Com students. Doing so, the more talented persons would enter in the management and they will try to make the UBL compatible with the other banks. Try to establish effective communication between top-level management and executive.

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Also do marketing through internet. This branch is not doing many functions to open the L/C and to deal in export and import facilities. So bank should hire export staff for such type of activities and start them in the branch. The bank must have to apply the marketing strategies to attract the customers which are depositors, like other banks are doing such as City Bank and in the Pakistan.

a) Human Resource Department


The importance of manpower cannot be denied in any organization. In case of banks it is the most valuable asset, because the bank is very sensitive organization and to be in harmony with this sensitivity, need for proper human resource is felt badly. Critical analysis of UBL necessities recommending suggestions that would increase banks efficiency and effectiveness.

1. Development of Managerial Leadership: In service industries like banks the need of managerial skill is much more important. It makes positive contribution towards higher effective results. Without development of managerial leadership, the effective utilization of the human resource will be impossible. UBL should also focus on this area and should avoid deficiencies in managerial leadership, by applying the modern styles of management.

2. Political interference: The political intervention in the bank needs to be stopped so that the top hierarchy as well as the personnel placed at other important levels of the institution is not changed Just on political grounds and the on going developmental work is not obstructed. It will enable the management to formulate long term strategies and their proper implementation because the long term policies, accurately based on calculated risk, have proved the pivotal role players for organizational sustainable development.

3. Basis for Promotion: SADAF (REG.NO 09-PGT-10716) 55

A sizeable portion of the officers of UBL, are promoted in without test and interviews to officers cadre. The promotion policy must be too tight and transparent that no one may have the chance to be promoted on criteria other than the required qualification, experience and performance. As for the present excess staff, those who do not found up to the required criteria may be given GHS etc.

4. Management Changes on Merit: In UBL, though very rare fresh recruitments are made, and the bank faces saturation in personnel, now clipping will be more helpful. This downsizing will leave the bank with the staff, to be retained on the basis of ultimate meritocracy with zero tolerance of incompetence. Now in this remaining workforce, a cultural change right from the top management down to the front line, that better suits to the present day needs of banking environment could be included through proper discipline and training.

5. Needs of change in Recruitment Policy: It is important to say that the external level market is full of the required talent like MBA, M. Com etc. But on the country only graduation with simple subjects is still the requisite qualification for officers cadre, which has already worked amply in the devastation of UBL. Therefore the recruitment qualification to the officers framework should be enhanced for simple graduation, to professionally qualify preferably masters in their respective fields.

6. Refresher Courses: The Human of the bank should frequently conduct meaningful refresher courses, seminars and workshops with a view to improve the knowledge of the staff. Due to severe competition and technological developments, the banking business is experiencing rapid changes therefore the HRD should have arrangements for staff trainings to cope with the new changes that may become threats for the interest of the bank.

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7. Computer Trainings: The present conventional training programs need to be made more comprehensive and reinforced with inclusion of computer training courses.

8. Training for Credit Management: Special trainings on credit management should be imparted to the finance dealing staff. Financing is main fountain banks income. Sound finance is extremely necessary for opening of springs of the smooth inflow of the income.

9. Training with Clear Objectives: Training needs assessment is necessary so that only the relevant staff is sent for the training courses.

10. Change in Appraisal System: The present performance appraisal system is good. However, it needs to be implemented in true sense. The drawbacks that are obvious like nepotism and favoritism etc. need to rooted out and the culture of ultimate meritocracy in appraising needs be inculcated.

11. Introduction of New Courses: The human recourses division of the bank should focus on the restoration of the corporate image of the bank by floating programs such as, marketing excellence, courses on corporate culture and others. It works as profit maximization devise. In my opinion the above two programs marketing excellence and corporate culture, added with the best counter service and outdoor informal relationship with the potential customers by the line managers will save the sum of money spent on various media of advertisement.

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12. Customers Orientation: Every entrepreneur if concerned about the success of his business has to understand, recognize, carefully and appropriately that his customer is The King of the business system and the original spring of the business revenue. UBL needs to be provided the deserved respect, quality and in time service and to be politely dealt with. 13. Career Development: As a matter of personnel policy HRD of UBL should prepare a plan showing the future growth potential of employees on the job performance and evaluation and it should be made known to the employees. In this regard, employees should be given opportunities to show their performances, which would help in their career development.

b) Fake financial presentation


The bank should confirm that the provided figures by the borrowing organization are fairly audited and that the auditors are on the approved list of the bank and they have clear opinion about the affairs of company and nothing has been made secret. The bank should have expert to examine various changes and developments for years in areas of the borrowing corporation like; i. ii. iii. iv. Financial condition Cash generation Ability to pay back Operational performance

The focus should be on identifying and explaining significant changes and developments in payback of loans, profit maximization, capital flow and operating expenses etc. the bank should take critical view of the financial and should assess changes occurred during the favorable and slack reason for the company.

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c)

Poor Management
A large number of industrial units and projects become sick because of poor management. When a business becomes sick or fails it is unable to return the loans, it has taken, and as a result such loans become bad debts. To avoid this, it is the responsibility of UBL, to ensure that the company to which loan is sanctioned enjoys good management skills and reputation. This can only be confirmed, if the bank assesses the management of the borrower party by taking care of i. Length and type of experience ii. Qualification and integrity iii. Reputation of managerial skills and style of management being used iv. SWOT analysis v. Financial procedures and documentation followed by employees vi. Span of authority and responsibility vii. Decision making skills of employees viii. Risk management of employees

d) Proper Documentation
Loans become irrecoverable through court of law in case of default when the bank fails to prove their claims against the delinquent borrower. If documents are obtained properly as per terms of the loan it is not difficult for the counsel of the bank to get decree against the defaulter. For proper and valid documentation the following aspects must be kept in mind. i. The bank should confirm that standard loan documentation is in place for each credit facility prior to disbursement. If the documents required are different from the banks standard approved format, arrangement for vetting of the legal counsel. ii. Bank should ensure that the documentation are correct, complete and correspond with the approved facilities. Also to ensure that blank spaces are filled, documents are dated, signed and stamped, the signer is authorized to execute such documents and signatures are verified.

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iii. Keep track of expiry of borrowing documents, insurance policies etc and follow up for regulation of any approved documentation deferrals. iv. Maintain documentation checklist, updating it properly each time new

documentation received. v. Maintaining computerized record of documentation. vi. Division of documentation on the basis of sector, to which loan is given.

e) Securities
i. Physical verification of the property offered as a security is must rather to rely on the documents. Investigation should also be conducted if the property is of ancestral nature or joint property. ii. Maintain in safe custody all collateral i.e. shares, govt. securities, property title deeds, mortgage documents etc. iii. Bank must ensure receipt of periodical statements of stock and receivables from customers, as per frequency specified in the credit approval. iv. Bank should also do the periodic physical checking and evaluation of pledged inventories as per terms of the approvals, i.e. using applicable margins, such that the drawing power adequately covers out standings amount at all times. v. Bank officials must ensure that the goods hypothecated or pledged are covered through a valid insurance policy with appropriate risk coverage, adequately covering the banks amount. vi. Concerned bank staff should ensure compliance with the institutional credit policies and procedures as lay down in the policy book or credit manual and advised from time to time by the credit committee or top management. vii. Ensure compliance with local regulatory requirements. viii. Confirm timely submission of correct information in the prescribed format as may be required by the central bank.

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9. Bibliography

Aswathpa, K, (2003) Human Resource and Personnel Management: New Delhi: Tata McGraw Hill Gibson, Charles H, (2002), 7th. Ed., Financial Statement Analysis, Prentice Hall International Corporation.

Meenai, S A, (1999) Money & Banking in Pakistan, Karachi: the Elahis Book Corporation.

Siddiqui, A.H, (1998), 6th Edition. Practice and law of banking in Pakistan, Royal Book Company, Karachi.

UBL (2007). Credit Manual. Gujrat.

UBL (2008). Deposit Manual. Gujrat.

UBL. (2010 2011). Annual Report. Gujrat.

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Van Horne, J. C & J.M Wachowicz, (1998), 10th Edition. Fundamentals of Financial Management. New York, Prentice Hall International Corporation.

http://www.ubl.com.pk http://www.google.com.pk http://www.scribd.com http://www.wikipedia.com

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