A banker or bank is a financial institution that acts as paymnet agent for customers, and borrows and lends money. Banks act as payment agents by conducting accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to the customer’s current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer.Banks borrow money by accepting


funds deposited on current account, accepting term deposits and by issuing debt securities such as bank notes and bonds. Banks lend money by making advances to customers on current account, by making installment loans and by investing in marketable debt securities and other forms of lending and other forms of lending. Banks provide almost all payment ervices and a bank account is considered indispesable by most businesses, individuals and businesses. Non-banks that payment services such as remittance companies are not normallly considered an adequate substitute for having a bank account. The history of banking is closely related to the history of money. As monetary payments became important, people looked for ways to safely store their money. As trade grew, merchant looked for ways of borrowing money to fund expeditions. In Egypt and Mseopotamia gold is deposited in temples for safe-keeping. The concept of banking arrived. The first banks were probably the religious temples of the ancient world, and were probably established sometime during the 3rd millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold, in the form of easy-to-carry compressed plates. Temples and palaces were the safest places to store gold as they were constantly attended and well built. As sacred places, temples presented an extra deterrent to would-be thieves. There are extant records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. By the time of Hammurabi's Code, banking was well enough developed to justify the promulgation of laws governing banking operations.


Ancient Greece holds further evidence of banking. Greek temples, as well as private and civic entities, conducted financial transactions such as loans, deposits, currency exchange, and validation of coinage. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could "cash" the note in another city, saving the client the danger of carting coinage with him on his journey. Pythius, who operated as a merchant banker throughout Asia Minor at the beginning of the 5th century B.C., is the first individual banker of whom we have records. Many of the early bankers in Greek city-states were “metics” or foreign residents. Around 371 B.C., Pasion, a slave, became the wealthiest and most famous Greek banker, gaining his freedom and Athenian citizenship in the process. The fourth century B.C. saw increased use of credit-based banking in the Mediterranean world. In Egypt, from early times, grain had been used as a form of money in addition to precious metals, and state granaries functioned as banks. When Egypt fell under the rule of a Greek dynasty, the Ptolemies (330-323 B.C.), the numerous scattered government granaries were transformed into a network of grain banks, centralized in Alexandria where the main accounts from all the state granary banks were recorded. This banking network functioned as a trade credit system in which payments were effected by transfer from one account to another without money passing. In the late third century B.C., the barren Aegean island of Delos, known for its magnificent harbor and famous temple of Apollo, became a prominent banking center. As in Egypt, cash transactions were replaced by real credit receipts and payments were made based on simple instructions with accounts kept for each client. With the defeat of its


main rivals, Carthage and Corinth, by the Romans, the importance of Delos increased. Consequently it was natural that the bank of Delos should become the model most closely imitated by the banks of Rome. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The development of Roman banks was limited, however, by the Roman preference for cash transactions. During the reign of the Roman emperor Gallienus (260-268 CE), there was a temporary breakdown of the Roman banking system after the banks rejected the flakes of copper produced by his mints. With the ascent of Christianity, banking became subject to additional restrictions, as the charging of interest was seen as immoral. After the fall of Rome, banking was abandoned in Western Europe and did not revive until the time of the crusades. However the commercial role of banks is wider than banking, and includes:

Issue of banknotes (promissory notes issued by a banker and payable to bearer on demand)

Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means

Issuing bank drafts and bank cheques Accepting money on term deposit Lending money by way of overdraft, installment loan or otherwise


Providing documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures

• • •

Safekeeping of documents and other items in safe deposit boxes Currency exchange Sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a 'financial supermarket'.

The economic functions of banks include:

Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable and/or repayable on demand, and hence valued at par and effectively transferable by mere delivery in the case of banknotes, or by drawing a cheque, delivering it to the payee to bank or cash.

Netting and settlement of payments -- banks act both as collection agent and paying agents for customers, and participate in inter-bank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economise on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables payment flows between geographical areas to offset, reducing the cost of settling payments between geographical areas.

Credit intermediation -- banks borrow and lend back-to-back on their own account as middle men.


Credit quality improvement -- banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and the bank's own capital which provides a buffer to absorb losses without defaulting on its own obligations. However, since banknotes and deposits are generally unsecured, if the bank gets into difficulty and pledges assets as security to try to get the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position.

Maturity transformation -- banks borrow more on demand debt and short term debt, but provide more long term loans. Bank can do this because they can aggregate issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes), maintain reserves of cash, invest in marketable securities that can be readily converted to cash if needed, and raise replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets) because they have a high and more well known credit quality than most other borrowers.

Pakistan is one of the key emerging markets of South Asia with a total population of over 140 million people. Pakistan’s GDP is expected to grow at over 5% during the year 200304. Macroeconomic stability and financial sectors reform are targeted to have a positive,

substantial impact on real economy. The financial sector in Pakistan comprises of Commercial Banks, Development Finance Institutions (DFIs), Microfinance Banks (MFBs), Non-banking Finance Companies (NBFCs) (leasing companies, Investment Banks, Discount Houses, Housing Finance Companies, Venture Capital Companies, Mutual Funds), Modarabas, Stock Exchange and Insurance Companies. Under the prevalent legislative structure the supervisory responsibilities in case of Banks, Development Finance Institutions (DFIs), and Microfinance Banks (MFBs) falls within legal ambit of State Bank of Pakistan while the rest of the financial institutions are monitored by other authorities such as Securities and Exchange Commission and Controller of Insurance. The banking sector in Pakistan consists of Commercial Banks and Specialized Banking Institutions. During the quarter-1 of financial year 2008 as per SBP Quarterly report there has been robust growth in deposit mobilization and credit off take with a rise of PKR 23.1 billion in net credit to the private sector. The banking sector in Pakistan is highly regulated. As the Central Bank of the country, the State Bank of Pakistan regulates the banking sector with full autonomy. In general, State Bank of Pakistan is responsible for licensing, directing, supervising, controlling and inspecting banks, and for exercising various monetary control policy measures. In addition, the Securities and Exchange Commission of Pakistan also monitors the operations of the listed banks in so far as they relate to public shareholding matters. The performance of the Pakistani banking sector has improved considerably in the years 2002 and 2003 on account of the following:


The performance of nationalized banks has significantly improved as the restructuring process initiated in these banks since the year 1997 has begun to show positive results.

Banks, especially the nationalized banks have taken steps, to reduce their administrative expenses versus total income

The tax rates have reduced from 58% in 2001 to 50% in 2002 to 44% in 2003 to 41% in 2004 and will decline to 38% in 2005 and reach 35% for 2006 onwards.

The State Bank of Pakistan/ Ministry of Finance has introduced the following reforms in the banking sector: • • • Further strengthening of Prudential Regulations. The policy for opening and closing of branches has been significantly liberalized. A free-floating market driven exchange rate system has been introduced. In addition, restrictions on buying and selling of foreign exchange by banks have been removed. • The Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was introduced in February 1997. Special banking courts have been established under this Act to facilitate the recovery of non-performing loans and advances from defaulted borrowers. • The Government has formed the Corporate and Industrial Restructuring Corporation (CIRC) to take over the non-performing loan portfolios of nationalized banks on certain agreed terms and conditions and issue government


guaranteed bonds earning market rates of return. The purpose for which CIRC has been established is two-fold: o to concentrate recovery efforts against loan defaulters o to improve the profitability of nationalized banks • Appointment of independent persons to the Board of Directors of the Nationalized Commercial Banks • The requirement for minimum capital of banks has been enhanced to Rs 1 billion to encourage consolidation of smaller banks. • To improve the quality and reliability of reporting, the format of statutory accounts has been revised on the basis of International Accounting Standards, quarterly reporting to the shareholders has been initiated, and periodic reporting to regulators has increased. In addition, the State Bank of Pakistan has published a list of approved auditors for various sizes of banks. • Good corporate governance culture is being enforced, both by the SBP and SECP, covering director’s responsibilities, improved reporting, empowerment of audit committees and internal audit and independence of external auditors. • • Credit rating for all commercial banks has been made mandatory. Extension in the period of carry forward of losses to 10 years and offsetting of losses by parent company in case of acquisition is allowed. • • Tax rates for commercial banks have been reduced. Tax laws have been changed to facilitate merger and acquisition of banks and financial institutions by allowing group tax loss relief.


Government bonds have been issued against long outstanding tax refund claims of banks. Consequently, this will lead to an increase in the profitability of these banks, as funds blocked in non-earning assets will be converted into earning assets.

The key trends in the banking sector are as follows: • Increased Merger & Acquisition activity in the banking sector with local private banks having made several domestic acquisitions • Large expansion of branch network and deposits by private and some foreign banks • • • •

Rationalization of branches by nationalized banks Increased focus towards consumer finance Increased focus on attracting local rupee deposits Increased emphasis towards automation and customer service Reduction in the increase in non performing loans as a result of better governance of banks and greater accountability process initiated by the government.

Following are the banks that are functioning in Pakistan.



State Bank of Pakistan

• • • • • First Women Bank Limited Khushhali Bank National Bankof Pakistan The Bank of Khyber The Bank of Punjab

• • • • The Punjab Provincial Co-operative Bnak Limited Zarari Taraqiati Bnak Limited SME Bank of Pakistan Industrial Developmentr Bank of Pakistan

• • • • Allied Bank Liited Hbaib Bank Limited MCB Bank Limited United Bank Limited


• • • • • • • • • • • • • Askari Commercial Bank Bank-Alfalah Limited Atlas Bank Limited Faysal Bank lImited Bank Al-Habinb Limited Habib Metropolitan Bank Limited (Karachi) KASB Commercial Bank Limited PICIC Commercial Bank Limited]Soneri Bnak Limited My Bnak Limited (Karachi) Meezan Bank Limited Saudi-Pak Commercial Bank Limited Crescent Commercial Bank Limited BankIslami Pakistan Limited

• • • • • ABN AMRO Bank AlBaraka Islamic Bank Citibank (Karachi) Hing Kong & Shanghai Banking Corp. Ltd. (Karachi) Oman International Bank (Karachi)

Dubai Islamic Bank

The author has completed his Internship in Askari Commercial Bank in fulfillment of requirements for the degree of MBA. This report is being submitted after the completion of six weeks practical training at Askari Commercial Bank Satellite Town Rawalpindi. Therefore, now I am going to explain the history, activities of Askari Commercial Bank and my experience.

Askari Commercial Bank Limited works as a unit of army welfare trust was established for the welfare of army officials. The office of army welfare trust is situated at AWT Plaza Rawalpindi. AWT offers the “AWT Saving Scheme” to the army officials only. AWT has its unit as Follows. 1 2 3 4 5 6 7 Askari Associates Askari Leasing Askari General Private Business Textile Mills Cement Industry Askari Commercial Bank

Incorporated in Pakistan on Oct. 09, 1991. The bank obtained business commencement certificate on Feb. 26, 1992 and started operations from April. 1, 1992, as public limited company, and has since expanded into a nation-wide presence of 140 branches, handled


by a human capital of 5000 employees and lowest turnover in Pakistani banking sector. The bank is listed on the Karachi, Lahore and Islamabad stock exchanges and the initial public offerings was over subscribed by 16 times ACBL is principally engaged in the business of banking as defined by the Banking Companies Ordinance, 1962. ACBL continues to scale new heights in all areas of its operations. The safety and security of depositor’s funds, high productivity and optimum use of technology are the hallmarks of its corporate strengths. While capturing the largest market shares amongst the new bank. Askari has provided good value to its shareholders. Share price of ACBL has remained approximately 12% higher the average share price of quoted banks during the last four year. Askari bank is principally engaged in the business of banking as defined in the banking company’s ordinance, 1962. As at December 31, 2002 the bank had total assets of PKR 70.313 billion, with over 250000 banking customers ACBL is the only bank with its operational Head Office in the twin cities of Rawalpindi Islamabad, which have relatively limited opportunities as compared to Karachi and Lahore. This created its own challenges and opportunities, and forced us to evolve and outward-looking strategy in terms of our market emphasis. As a result, ACBL developed a geographically diversified assets base instead of a concentration and heavy reliance on business in the major commercial centers of Karachi and Lahore, where most other banks have their operational Head offices.


“To be the bank of first choice in the region”

“To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stake-holders, and contributing to society”

The intrinsic values, which are corner stones of our corporate behavior, are:

 Commitment  Integrity  Fairness  Team-work and  Service




From the above organogram we see that there are different types of departments in Askari bank and the explanation of it’s department and operations are given below.


Accounts Department is quite important department of the Bank. Following are the responsibilities of the said department. a. Checking of Activity on Daily Basis b. Maintenance of SBP Account c. Payment of Bills to Different suppliers/couriers etc. d. Depreciation Vouchers at end of Each Month e. Payment of Staff Salary f. Submission of all relevant statements to SBP/Head Office DAILY BANK POSITION STATEMENT
All relevant reports pertaining to the whole day working are printed out in the daily working procedure of End of Day run by the Computer Department. Some reports in which each financial transaction either pertaining to customer’s accounts or to General Ledger Accounts is printed in this procedure are called Daily Activity Reports. This is responsibility of Accounts Department to check each transaction made through computer posting in order to assure that the entry passed in quite right and correct. Each & every voucher is sorted out and then is placed in the following bunches according to its nature. 1. Saving Accounts 2. ASDA Accounts 3. FCY Accounts 4. Head Office Vouchers


5. Current Deposit Accounts

Accepting deposits is one of the important functions of a bank. Deposits are as necessary to the bank as blood to the human body. It is backbone of the bank. The banks receive surplus income of the individuals, companies in the form of deposits. These deposits are useful in many ways as they provide source of earning for the bank and help in meeting the consumption and business needs of community. The surplus of money in a country is also influenced by the aggregate quantity of bank loans. All the deposits are in fact liability of the bank, as the bank has to offer suitable rates of interest on these deposits to the depositors or simply have to repay them on demand. Bank performs its business with depositor’s funds and earns profit on these deposited funds. A deposit made for a certain period of time is called Term Deposit. At the end of the specific period, the customer is allowed to withdraw the principal amount. The bank pays handsome profit rates on Term Deposits. Askari Commercial Bank Limited is offering following types of Term Deposits to its customers:  PLS Notice Deposits  PLS Term Deposits  Askari Advantage  Askari Bachat Certificates



Auto Teller Machine (ATM) is one of the more convenient services rendered by ACBL to its customers. It offers you 24-Hours Cash Payment through highly equipped global system of NCR ATM Machines. A person can withdraw an amount of Rs.10, 000/- from his balance amount in 24-Hours. ATM Cards are only issued to the people who are having their accounts in ACBL. More than 5000 ASKCASH cardholders are in Rawalpindi. The procedure for issuance of ATM Card is as following: When a person opens his account with ACBL he has the option to avail ATM Card Facility. For the purpose, he has to fill ATM Application form in which name of account holder, address and account number is to be reported. ATM Cards are issued from Head Office of ACBL and it takes 6-7 days for issuance of fresh ATM Card. For this extra ordinary and lucrative facility, ACBL deducts nominal charges @ Rs.200/- per year on six monthly basis (Rs.100/- after every six months). The ASKCASH card is your key to 24-Hours Banking Facility extended by the bank. This card is your electronic purse, which provides you easy access to your cash requirement wherever, and whenever you need it, all over the country, through the ASKCASH ATMs. ASKCASH is ACBL’s commitment to provide convenient banking to its customers. Askari commercial bank has recently introduced a mobile ATM, which is a bus that can reach at any branch of Askari bank whose ATM machine is out of order. Now the customers of Askari commercial bank are not required to wait, until ATM machine get corrected. PERSONAL IDENTIFICATION NUMBER (PIN)

This is a 4-Digit confidential number, which is know only to you and should be kept secret. The PIN can be changed any time at your discretion. This is the basic need of your ATM Card.

1.4.4 REMITTANCE & BILLS DEPARTMENT This department provides services to the customers of the bank. The main function of this department is transfer of funds. There are different modes of Remittances: • • • • • • • Demand Draft Telegraphic Transfer Mail Transfer Pay Order Pay Slip OBC IBC BANK DRAFT/DEMAND DRAFT
A bank draft is an order instrument issued for payment of a certain sum of money to the order of a certain person and drawn on one office of the bank by another office. Actually the DD is drawn on the same bank at the different branches. If two banks are involved, then the DD is sent to the other bank but in the other case, it is handed over to the applicant. There are three parties to the draft: Drawer: Issuing Bank Drawee: The bank on which the draft is drawn


Payee: The named person to whom the payment is to be made Standard application form is used for issuance of demand draft, which is to be filled in by the client properly and to be surrendered with cash or cheque covering the amount of the draft and other charges of the bank. After issuance of a bank draft, it is handed over to the applicant and its advice containing the particulars of the draft is sent to Drawee Branch for their necessary information and payment of the draft on its presentation. TELEGRAPHIC TRANSFER
Generally a mail transfer advice reached the Drawee Branch the next day, where courier arrangements exist. However, when it is sent through post offices, it usually takes 2 to 3 days to reach its destination. But sometimes, an individual whether customer or not, demands that his funds should be transferred from one place to another place through the quickest means. In such cases, transfer of funds message is passed on through a

telegram, or express, to the Drawee branch of the bank. A tested message is sent to the Drawee Branch followed by the confirmation copy. In this case the payment is immediately required by the payee, the tested message is given on the telephone. Besides normal charges as those recovered on issuance of demand draft, the bank charges on additional expenses, i.e., Telephone Charges/Fax Charges of Rs.150/- are also recovered from the customer.

A banker’s payment order is an instrument drawn at him. Implicit in a payment order is an undertaking on the part of the banker to pay a certain sum of money, on the presentation of the instrument. The payment orders are generally issued for a client.

Lending or financing is one of the basic functions of banks of all categories, through which they exercise major part of their profitability. So this department deals with the preparation of proposals of advances, and then submitting them to Head Office for approval and sanction of limit to the worthy customers, according to existing policies of Head Office in respect of mode of Financing. TYPES OF FINANCING
Generally two categories are known as types of financing: a. Fund Based Financing b. Non Fund Based Financing The Purpose of Financing
The borrower must disclose factual purpose for seeking financial accommodation from bank without such, the proposal should not be given due consideration. The possible purposed may be as following: 1. 2. 3. 4. Export Finance/Packing Credit Import Trade Financing Working Capital need for Trade & Industry Fixed Investment for Industry (Project Financing)


Computer Department is the most important department in the computerized banking sector. In Askari Commercial Bank Limited, where most of the banking works is computerized; following are the responsibilities of the officer handling the department. START OF DAY
This is the first procedure adopted by the officer of the computer department after opening of the bank each morning. To start computers and a particular procedure on which all the day working depends called Start of Day. In this procedure, we feed in the computer date or working, next date of working, expected number of transactions, etc. and other relevant information which are required for the whole day working. UPLOADING OF ATM
After successful start of day and initialization of dates, first work to be done by the officer concerned is uploading of ATM. In this procedure all the transactions made at night after the Head Office authorizes close of business by ATM. TO HBI
This is the main process, which enables the computer to make satellite link with main serves of Head Office. It enables the branch to make ONLINE Transactions for the day. After making all the necessary and important working the computers are ready for all day transactions.



Askari bank provides following product & services to its account holders.




Personal Finance is a parameter driven product for catering to the needs of the general public belonging to different segments. One can avail unlimited opportunities through Askari Bank's Personal Finance. With unmatched finance features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank's Personal Finance makes sure that one gets the most out of his/her loan. Once a good credit history is established, the door to opportunity opens much wider. One can avail unlimited opportunities through Askari Bank’s Personal Finance. With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank’s Personal Finance makes sure that you get the most out of your loan. No matter what your need is, Askari Bank has more ways to serve you than ever before.

Askari "Mortgage Finance" offers the convenience of owning a house of choice, while living in it at its rental value. The installment plan has carefully designed to suit both the budget & accommodation requirements. It has been designed for enhancing financing facility initially for employees of corporate companies for purchase/ construction/ renovation of house. Ever since the inception of life, shelter has been rated among the primary needs of mankind. Owning a home for oneself still remains an exclusive dream for many. Askari Bank has made the realization of your dream to have a house of your very own possible. Whether you plan to build a house, tailor made to your requirements or buy a constructed house, Askari mortgage finance enables you to pursue your goal without any problems.


In pursuance of the National objectives to revive the economy of the country, ACBL is providing loans to small and medium size business enterprises under Askari Bank's Business Finance Scheme. Our goal is to offer a loan, which enables business community to receive the financing required by them based on their cash flows. Our valued customers can enjoy the convenience of getting financing on attractive terms with the minimum processing turnaround time. You always wanted to put in that extra money into your business, which makes it grow and grow! Now you can stop worrying about your daily cash requirements, and start enjoying our unique Askari Business Finance facility. Available upto 60% of the assessed market value of your residential property, through equitable/token mortgage.

This personal line of credit would be set up with a specified credit limit upto Rs. 500,000/-

Yet another of our products, Askar offers the most convenient and affordable vehiclefinancing scheme, which provides our valuable customers an opportunity to own a brand new vehicle of their choice. With minimum down payment, lowest insurance rates and widest range of available car makes and models, Askcar offers the best value to our esteemed customers. Askari Bank offers you the most convenient and affordable vehicle financing scheme to help you own your favorite brand new car.


Askari Bank is committed to provide you innovative and competitive solutions to your banking needs in a more efficient and personalized manner. Your Bank enjoys a strategic competitive advantage over all domestic players by virtue of its leadership, large network and technological advancement. In line with our tradition of innovation, Askari Bank takes pride in announcing launch of "Askari Debit Card"- Askari Bank's Debit Card. Askari Debit Card is tailored to your shopping needs and is another valuable financial solution reflecting our commitment to build lasting relationship with you. Askari Debit Card means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. Askari Debit Card is your new shopping companion which enhances your quality of life by letting you do shopping, diner at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime.

The range of our products and value added services enhances with introduction of Rupee Travelers Cheques (RTCs) launched in March 2002. In spite of our constraint on issuing higher denomination of RTCs against restrictions imposed by the Central Bank of Pakistan we have been striving to attain our shares with sizeable portfolio. Askari Commercial Bank Limited has always remained at forefront in introducing innovative and unique products in banking sector. Our financial instruments provide greater financial freedom and security in an unmatched way to our valued customers. Askari Bank offers you its "Rupee Traveler Cheques" eliminating all financial risks while


traveling. So avoid risk of carrying cash through Askari Bank's Rupee Traveler Cheques.You’re Best Traveling Companion. Why Askari Bank's Traveler Cheques? 1. Free Issuance. 2. Free Encashment. 3. Plus commission for the Customer at the time of encashment if retained for a specific period. 4. Nationwide acceptability. 5. Facility of encashment in cash to the purchaser. 6. Facility of encashment through clearing. 7. No purchasing limit. 8. Valid until enchased. 9. Easily Transferable. 10. Account relationship not mandatory. 11. Fastest refund procedure in case of loss/theft. 12. Safe & Secure due to foreign printing with multiple security features. 13. Available in Rs. 10,000 Denomination at all branches of Askari Bank.

No withholding tax on sale or encashment*.

The first liability product launched by this unit is showing a remarkable acceptability in the market. The growth of this product is witnessed by its share, which has presently


reached at Rs. 1,079 Million even after lowering down the profit rates due to sufficient liquidity in the market

Islamic Banking was launched under the brand 'Askari Islamic Banking', by opening 6 dedicated Islamic Banking branches in major cities of the country. Further expansion is planned with improved capabilities for offering products conforming to the Shariah principles. Askari Islamic Banking opens the doors for Halal banking solutions. Our objective is to put in place an efficient banking system supportive to economic justice and welfare of society in line with Shariah standards. A comprehensive range of Islamic Banking products and services is being offered, in order to meet customer's demand of Shariah Compliant Banking, in the following areas:
• • • • •

Islamic Corporate Banking Islamic Investment Banking Islamic Trade Finance Islamic General Banking Islamic Consumer Banking

Islamic Banking products have been approved by the Bank's Shariah Advisor. As per Shariah requirements, funds and products of Islamic Banking are managed separately from the Conventional Banking side. All funds obtained, invested and shared in Halal modes & investments, under supervision of the Shariah Advisor.


The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse geographical and climatic conditions the country has tremendous potential for growth and development in agriculture. However, adequate and timely financial assistance to the farmers will improve production potential of agriculture sector in the country. The modern concept of agricultural credit envisages establishment of an efficient institutional credit system to serve as a package of credit, supplies and knowledge for the overall strength of the farmers who at present suffer from low productivity and financial insecurity. A successful credit evaluation system, therefore, should have the basic ingredients to provide adequate amount at the right time and in the right form to help farmers in making a productive use of loan funds.

The Askari Kissan Agri Finance Program (AKAFP) has been designed to meet ON FARM / OFF FARM credit requirements of farmers on the most convenient, flexible, easy terms and conditions. The program features:
• •

A broad array of credit lines designed to meet farming requirements. Repay and borrow at your convenience on revolving credit basis at lowest markup rates renewal able after three years.

• • • •

Convenient repayment terms based on cash flow abilities. Availability of leased Tractors / Transport without Land / Collateral. No Hidden Cost. Availability of interest free package for inputs and tractors etc.


• • •

No Pre-adjustment penalties. Earn prompt payment Bonuses and reduce financial costs. Insurance cover of leased assets, animals, crops and life assurance of borrowers.

Traditional modes of cultivation viz Bullocks, Camels, horses etc can no longer keep pace with the demands of present times due to manifold increase in the population. Power in the form of modern technology is therefore the need of the hour. To meet this emergent requirement, Askari Bank has launched a Askari Kissan Tractor Finance to bring power to the fields. Salient Features of the Program are:

This program has been designed to benefit the owner as well as non-owner farmers.

The farmer will have privilege of availing non-funded facility at a reduced cost under this program on account of more equity participation.

Although the facility is available for a period of five years. However, good farmer bonus will be available to the borrower in case the loan is repaid as per terms of sanction.

Priority in delivery of tractor will be given by manufacturer as per arrangements with the bank.

The farmer’s life & tractor will be insured against contingencies, which will provide comfort and piece of mind.



Agriculture farming is impossible without adequate water. We can combat the prevalent water scarcity by harnessing more natural resources. Increased use of mechanical means thus provides a ready alternative. Keeping in view the scarcity of water, which is the lifeblood of arable lands, Askari Bank has started a program for farmers, to finance installation of Tube-Wells (electric, diesel and solar energy units) water management equipments and water channel development etc., which will help farmers to make optimum use of limited water resources. Salient Features of the Program are:
• • • •

To facilitate the farmer, to overcome the scarcity of water. To develop mechanical water resources, sprinkler and drip system etc. To avoid traditional / inefficient modes of irrigation and waste of available water. To manage natural / available resources through water management practices.

A grave handicap that afflicts our farmers is their inability, due to lack of proper facilities, to take their produce to the market through efficient means of transportation. This adversely affects the freshness, quality of the product and denies them the desirable Price-Fetching opportunity. Conversely, they lack mobility to acquire much needed inputs essential for their farming needs. One can safely conclude that if provided with appropriate and speedy transport, the farmer can benefit by enhancing his selling ability and thus increase his income / cash flow. it is pertinent to mention that a number of Banks, Leasing Companies and Private Agencies have geared their marketing efforts to concentrate on and have mainly captured the urban markets. There is no support provided


to cater to the transport needs of deserving rural farmer’s community. Askari Bank true to its commitment has taken the lead to launch Askari Kissan Farm Transport Finance. Salient Features of the Program are:
• • •

To increase mobility and access of the farmer to the markets. To lower the burden / cost of transportation against hired transport. To create awareness of market movements in order to obtain maximum price of their produce.

This will also supplement the income of the farmer which will ultimately enhance the repayment capacity of the borrower.

Additional income can be generated if used for hired services to the fellow farmers.



I started my internship on 21st of January 2008. I worked on different departments and sections of Askari Commercial Bank like: 1. Accounts 2. Credits 3. Remittances 4. Lockers and 5. Deposits During my stay in Askari commercial bank I tried my level best to grasp as much practical experience and knowledge about the working of the banks as I can. I spent


different duration of time in all above five departments. The working experience that I learned during my stay in the different department of the bank is as follows:

I started my internship from accounts department, first day I reported to accounts officer Mr. Masood malik. He gave me some information about accounts section and also introduced me with the staff of the branch. My first work in the accounts section was to sort the vouchers according to the account number. The account numbers contain 12 digits, out of which first two are branch code, other two are currency code, other three are type of account, next four are the customer title and the last one is computer no. e.g. 440101098751 can be an account number. The title of the account can be read through different codes e.g. 010 100 107 165 current deposit (CD) profit and loss saving account (SB) Askari value plus (AVP) Askari saving deposit (ASDA)

A. Current Account:
A current account is a running account, which is continuously in operation, by the customer on all working days of the bank, the customer deposits without previous notice to the bank. Before opening of current account there must be some important point which you should keep in your mind.



Current account can be opened with an initial deposit of not less than Rs. 5000. The amount of initial deposit should be mentioned on AOF

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It is an open account for which there is no fixed period for deposit. There is no restriction on making deposits in and withdrawals from this account. Bank does not pay any inertest on these deposits, as they can be withdrawn without notice.

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Cheques are used for withdrawals from theses accounts. Loans and credits may be sanctioned to the credit worthy current account holders with ease.

B. PLS Saving Bank Account:
Saving deposits were introduction to inculcate and encourage the saving among people of small means in order to achieve the Isalmisation of the banking sector in the country, the government authorized the banks to accept saving deposit on profit and loss sharing basis. Deposits received under this scheme are invested in non-interest bearing advances and other avenue so as to eliminate the element of interest.

B.1 Points to Remember:
• The PLS Saving account may be opened in the name of an individual, or jointly in the names of two or more persons. These accounts may also be opened by charitable institutions or got provident fund and other funds of benevolent nature by 765local bodies, autonomous corporations, companies, associations, societies and educational institutions.


PLS SB Accounts can be open with initial cash deposit of not less than Rs. 10000/-. The amount of initial deposit should be mentioned on AOF. A minimum balance of Rs. 500 (or as per bank policy announced from time to time) will have to be maintained for qualifying for sharing profit/loss.

Not more than one account may be opened in any one name except in cases where such accounts are opened in the name of parent or guardian for more than one child.

Statement of PLS Accounts are normally provided once in every six months as on June 30 and December 31.

No service charges shall be levied on PLS saving account as per SBP prudential regulations.

As it is apparent from name, ASDA Account is special account with all facilities of current account along with profit facility. Profit is paid on monthly average balance. Minimum balance required for eligibility of profit earning is Rs.50, 000/-. The profit rate increases with the increase in balance. The payment of return is monthly. This account is more attractive for businessmen but individuals having handsome balances also prefer to open this account. The other works for which account officer and staff in the accounts department are to pay the salary to all the staff of the bank, charge the depreciation for all the furniture in the bank, approve the leave application for staff of the bank, keeping the inventory level which is required for the daily working of the bank i.e. stationary and other necessary


items, handle the grievances that occur among the employees e.t.c. I spent almost two weeks in the accounts department.

After working there I was transferred to credit section, where I worked under the supervision of credit officer Mr. Imran. There I learnt how the banks gives credit to customers, what legal documents are required to sign both by customer and the banker, how the amortizations are make in the banks. Before the sanction of the loan the customer of the bank has to sign four legal documents, document no. 1, document 7 A, hypothecation document e.t.c. The person who wants to get a credit from a bank must have to open an account in the bank that is he must be an account holder of the bank. The banker keeps the minimum amount of the cheques for settling of the amount of the bank. And withdraws the amount that is for the installment. If in any case the cheque is not honored, the banker makes the report to the bank with the help of retail banking. I can conclude my work in the following words. • Credit Lending Profile (CLP) compilation is the gathering of the documents required on the basis of which loan is disbursed. • • • Loan Disbursement Amortization scheduling and formation of Disbursement Certificate Credit Accounts Opening

In credit department when bank made the credit it design the credit report, Actually Credit report is the collection of maximum facts about the depositing customers or


borrowing customers with thorough investigation and compiled by a senior officer preferably the Branch Manager. These facts can be divided into three categories: 1. Historical Facts 2. Financial Facts 3. Investigational Facts THE NEED OF CREDIT REPORT Credit report is prepared to provide courteous services to depositing customers and sound lending to the borrowing customers therefore, we must know: Who the depositing customers are? Who the borrowing customers are? A credit report is the only source available with us to answer these questions. WHY CREDIT INVESTIGATION? Financing has always been one of the principal sources of Income or commercial banks and usually represents one of the principal assets of the Bank. Credit investigation helps the Manager in the quality of good financing therefore, the extension of credit on a sound basis is essential to the growth and prosperity of a Bank. INTERVIEW WITH THE BORROWER The most important investigational procedure is the interview or series of interviews with the applicant. The initial interview should be conducted with tact. The applicant has a great deal of pride in his accomplishments. One must be a good listener, but must also


ask sound financing questions because the borrower may innocently or purposefully omit important facts. The following questions must be answered:  Who is the borrower?  What is the purpose of Finance?  How much credit is required?  How will the specific credit solve the problem?  When will the finance be repaid?  Where from the funds will come to repay the finance?  What will be the period of finance?  What is the nature of security offered by the borrower?

From credits section I was transferred to deposit section. There I learnt how accounts are opened in the banks and how their processing is done in the banks. For the opening of the customer have to deposit minimum amount of the specific account with the bank, such as for opening current account with the bank the customer have to deposit minimum amount of Rs 5,000 with the bank, and for opening of Askari Special Deposit Account the customer have to make a initial deposit of Rs 50,000 with the bank, and for opening of Saving account with the bank the customer have to deposit minimum amount of Rs 2,500 with the bank. The customer have to fill a account opening form which they gets from the bank, and gives two signatures on the signature specimen card. I can conclude my work in the following words.


Account Opening procedure Change of signatures Updating of record especially updating of new CNIC numbers and addresses Calculation of profit on different accounts Requisition slips for the purpose of issuing new cheque book.

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When a customer opens an account, he enters into a contractual relationship with the bank. As such all requisites of the contract are to be fulfilled properly. For instance, at the time of opening the account, the intended customer must have following characters. a. Must be adult b. Must be of sane mind c. Must not be insolvent and bankrupt d. Must not be bewared under any law from entering into any contract While opening accounts the officer must see that the above qualifications of the customer are established.

If customer wants to change his signature then he should personally visit to the bank and explain why he wants to change his signature normally in Askari bank we do not allow the customer to change his signs once he had sign on the signature sign (SS) card then he is not allowed for making amendments in his signature but if he wants to change sign then he should open new account for it.


C. UPDATING OF RECORDS: Some times it happens that customers usually change their home addresses for this customer should go to bank and give his new address to bank, after taking new address from him bank makes the changes in its record system so bank can deliver letters to the proper and exact address. In deposit department my concerned officer Mr. Masood told me that following things should kept in mind when you are going to open an account.

Askari bank gives profit to its account holders on ASDA and saving account, ASDA is the Askari Special Deposit Account the initial deposit of this account start from Rs.50000 to onward. Askari bank has set different rates on the different amounts. While on saving account the bank gives profit on the remaining balance which customer has in his account the rate of profit vary from remaining balance.

E. REQUISTION SLIPS FOR PURPOSE OF ISSUING OF NEW CHEQUE BOOK: There are some requisition slips of bank that often use when customer finish its cheque book leafs, for very first time bank issue the cheque book to its customer it will use FORM “A” requisition but on second time it will issue cheque book on FORM “B”. MAIN POINTS

As much information as possible must be elicited from the prospective customer relating to his means, line and place of business.


 Each and every column of the account opening form should be properly filled in along with all relevant details.  Account must be properly introduced. As far as possible the person introducing the account should attend the bank personally with the prospective customer.  In case the person introducing the account does not call at the bank, extreme care should be taken while verifying genuineness of his signatures.  Staff members generally should not introduce the account. They should introduce accounts of those persons only who are personally known to them.  Introduction from persons having doubtful dealings with the bank should be discretely declined.  Signature on the account opening form as well as specimen signature card must be put in by the customer in presence of the bank officers/manager who will attest them preferably in presence of the introducer.

Letter of thanks should be sent to the introducer very next day the account opened. This precaution would accomplish the purpose of intimating the introducer that the account has been opened on strength of his introduction thereby inviting disclaimer of untrue. DOCUMENTS REQUIRED
For literate person, copy of National Identity Card is required as a primary requirement. For illiterate person and pardanashin women, it is required that he/she must visit in person along with the copy of National Identity Card. After that I learned that how cheque book is being issued to bank customer.

The customer for withdrawal of any amount uses chequebook. Requisition slip is

required for issuance of chequebook. Requisition is a request from customer for issuing chequebook. When an account is opened, cheque book is usually issued on the very next day, however the same can be issued on the same day if the customer is well known to the bank and already maintaining accounts, the bank has no objection to issue cheque book on the same day. After issuance for the first time, chequebook is reissued on proper request of the customer after surrendering requisition slip of the previously issued chequebook. Cheque books containing 25 & 50 leaves are issued to current & ASDA accounts whereas PLS Saving account are normally issued 10 leaves cheque book, however upon specific request of the client, 25 leaves cheque book may be issued also.

From there I was transferred to lockers section I spent about four days in the lockers department. There are three sizes of lockers available in the Askari Commercial Bank, large, medium, and small. Like credits the person who wants to avail the facility of the lockers must have to be an account holder of the bank. The rates of the lockers vary with the size of the lockers. A person who wants to get a locker must have to come with the copy of ID card and he/she can get the locker instantly. The banks have two keys of the locker one is given to the person, who want to get a locker, and other one bank keeps with it self, the locker will only open if both the keys of the locker used at the same time. Following operations comes in this head.


Lockers opening and operations OBC Cheques stamping and lodging Formation of OBC forwarding schedule. TYPES OF LOCKERS • SMALL:
If customer wants to operate small locker then he/she has to pay Rs. 25000 to bank as a security this money is refundable and customer can take it back when he will close his account. • MEDIUM:

If customer wants to operate Medium size locker then he/she has to pay Rs. 30,000 to bank as a security this money is refundable and customer can take it back when he will close his account

For large size locker customer has to give Rs.45000 to bank and this is also refundable.

I spent my last week in the remittances department. There I worked under the supervision of Mr. Israr. He is in charge of remittances department. There the checking of the cheques are done, any cheque which is of heavy amount like 25,000 or more is to be supervised first from the remittances department. The remittances department also does the OBCs.


The OBC is outward bill for collection. In remittance department the following things comes • • • • Demand Draft Pay Order Pay Slip Telegraphic Transfer Demand Draft:
It is an instrument payable on demand for which value has been received, issued by the branch of the bank drawn i.e. payable at some other place (branch) of the same bank. If two banks are involved then the DD is sent to other bank but in other case it is handed over to the applicant. PAY ORDER P.O
A banker’s payment order is an instrument drawn at him. Implicit in a payment order is an undertaking on the part of the banker to pay a certain sum of money, on the presentation of the instrument. The payment orders are generally issued for a client. PAY SLIP
Pay Slip is an instrument, which is issued by the bank for the purpose of payments of its own expenses to the concerned suppliers/parties. The procedure for issuing the pay slip is as following: Firstly relevant vouchers are sent from the accounts department to the remittance department for issuance of pay slip. Separate stationery is used for pay slip and after


entering correct particulars according to the vouchers, it is signed by the two authorized officers. General Ledger A/C of Bills Payable Pay Slip Issued is credited against the debit of expenses to the relevant G/L Head. The pay slip is then handed over to the customer after entering in pay slip issued register. Pay slip is just like a cheque and the bank is liable to pay its amount either in cash or through clearing to another bank where the beneficiary is maintaining his account. When the bank for payment receives pay slip, it is again entered in the register in the column of payment with date of payment. Then the payment is made and it is posted in the computers also. At the time of payment the bills payable account is debited. TELEGRAPHIC TRANSFER Generally a mail transfer advice reached the Drawee Branch the next day, where courier arrangements exist. However, when it is sent through post offices, it usually takes 2 to 3 days to reach its destination. But sometimes, an individual whether customer or not, demands that his funds should be transferred from one place to another place through the quickest means. In such cases, transfer of funds message is passed on through a

telegram, express, to the Drawee branch of the bank. A tested message is sent to the Drawee Branch followed by the confirmation copy. In this case the payment is immediately required by the payee, the tested message is given on the telephone. Besides normal charges as those recovered on issuance of demand draft, the bank charges on additional expenses, i.e., Telephone Charges/Fax Charges of Rs.150/- are also recovered from the customer.


3.2. The Skills Which I Have Learned

I have learned how to deal with customers. I have learned how to deal with people from different backgrounds. I have learnt to adapt to a variety of tasks. I have gained persistence to complete tasks. I have gained ability to plan with and work cooperatively with others. I have learnt how to deal in stressful or hectic situations.

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3.3. Challenges which I have faced
During my internship I have learned a lot from my bank but there were also some hurdles, some challenges which I have faced. They are as follows. • There were six more internees which were doing internship with me so ratio of learning was low. • Some of the officers had very stick behavior so it was difficult for me to work with them but still I had work. • The biggest challenge for me was to cover the maximum things which I could cover in just 42 days. • The branch which I have chosen was the busy branch of ACBL that’s why the work load was quite heavy over there.




SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.


Implementation of advance technology in all branches recently Askari bank has purchased new software which is UNI software because of it the staff can perform much faster.

Professional staff, right person hired on the right place. With the passage of time askari bank has expand their branches and now running almost 140 branches.


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Askari bank is providing quality services to it customers. One distinctive feature of the bank is that it is the only bank working for the welfare of army officers, which was established by the Army Welfare Trust.


Askari bank has lesser number of branches as compare too many other branches. Due to this problem army officers cannot avail the benefits of their own bank

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As far as deposits rate are concern askari bank has very low deposits rates. Need to work more on agriculture and Islamic banking. Plan makers of ACBL are not competent they are not focusing on the marketing (new product development, attract new customers)


Askari bank is surrounded by many competitors. It has an opportunity to do aggressive marketing to increase its business.

Offshore, Islamic and corporate banking

• ACBL has many competitors, which are continuously increasing its products and marketing aggressively. It may cause its customers to shift to competitors.


Some other banks have competent taskforce, which is also threat for ACBL because human resource is the most valuable resources.

In competitive analysis we analyze that on which ground our company has a competitive edge on its competitors.A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Askari bank has some competitive edge on the following ground.

Union bank gives free ATM card but requires you to maintain Rs.100000/-Avg monthly balance, otherwise deducts Rs.200/month while Askari bank does not deduct any charges.

Askari bank is offering I Net facilities but Alfalah bank is not offering such facility.

Union bank charges Rs. 20/ leaf for cheque book and Askari charge Rs. 5/ leaf. If you are an account holder of Askari bank then you can enjoy the online information facility you can also transfer your funds but ABN AMRO do not provide such type of facilities.

ACBL provide online utility bills payment facility like PTCL, Mobile Bills etc, but Standard chartered do not provide this facility to its account holders.

The withdrawal limit of Askari ATM card is Rs. 25000 but HSBC withdrawal limit is 15000.

BOK is not offering ATM card do you believe?


BOP charges Rs. 10 for each ATM transaction but Askari do not cut any charges on ATM transaction.

ACBL provide you free account statement twice in a year but after that deduct Rs.50 if you want to take more than provided limit and hand over you on the spot but Standard chartered gives you monthly statement, deducts Rs.50 per statement and usually hand over you after 1 day.

The initial deposit of ACBL current account is Rs. 5000 but initial deposit of S.C current account is Rs. 25000.

Minimum balance requirement for profit of ACBL SB account is Rs.10000 while standard chartered requirement is Rs. 25000.

ACBL provides free online transfer up to Rs 1.0 million and every branch is online.

Free issuance of traveler’s cheques with incentives for retention beyond one month.

As far as profit rates are concern Askari bank offers very low profit rate currently Askari profit rate is 9% for 5 years but Faysal bank is giving 11% for one year.

Askari bank cut Rs.175 ATM charges after every six months but Bank Alfalah does not cut any ATM charges from its customers.

As compare to HBL, ABL, UBL, NBP, and MCB, askari bank has very less number of branches.




Although the working of the Bank is really good but there is always some room for improvement. After working in Askari Commercial Bank as an intern, I would like to give the following suggestions: • Measures should be taken to resolve internal conflicts (office politics) so that work environment remains smooth and calm.

There should be a proper coordination between the coworkers, so that the desired results could be achieved. Like in case of personal loan there should a proper coordination between the telemarketer and the sales executive for the daily sale calls, and also there must coordination among the sale executive and the collection officer, who is responsible to collect the monthly installments.

The bank should look for new systems processes, procedures, to get a desired result in the sales area. The department can cut cost in one area and spend this extra cost on sales. Extensive research is also important in this regard.

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Flexibility should be there in the work environment to some extent. Right people should be hired with related field of education in the Bank. Delegation of work is not proper. Sufficient space should be provided to the employees in order to work in comfortable atmosphere because the working space is very congested.


The office should be closed at 5 o clock which the official closing time, the over work reflects that the particular organization is not efficient and effective.

There should be proper cafeteria in the Bank so that people can have proper lunch in the office instead of going out at far places to take lunch.

Askari Commercial Bank Limited works as a unit of Army Welfare Trust and was established for the welfare of army officials. ACBL started its operations from April 1 1992 as a public limited company and has since expanded into a nation-wide presence of 140 branches, handled by a human capital of 5000 employees and lowest turnover in Pakistani Banking sector. ACBL continues to scale new heights in all areas of its operations. The safety and security of depositors’ funds, high productivity and optimum use of technology are the hallmarks of its corporate strengths. Basically I have worked in ACBL and was rotated in different departments. i.e., Credit, Deposits, Remittance, OBC/Lockers etc. where I have performed different activities and gained experience. I have improved different skills of mine and learned some new as well. I really enjoyed working over there. In the whole internship, the courses (I have studied in MBA), which helped me are the Finance courses, IT and Management. I have tried my best to utilize my skills and to learn the most.



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Online References:
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