CHAPTER 6: CRITICAL ANALYSIS

6.1. INTERPERSONAL RELATIONSHIPS

The nature of interpersonal relationships is very much varied. At one extreme

they may be positive and constructive or else employees may dislike each other
and don’t have mutual respect for each other. Conflict can be good for a group if
it is managed appropriately. Conflict is the disagreement between two or more
individual, groups or organizations.1 By airing differences, group members can
produce quality decisions and satisfying interpersonal relationships

Interpersonal relationships in the branch operations can be discussed in two

different aspects. Firstly, the relationship of employees within the department.
Secondly, the relationship of Branch Operations with other departments. The
Human Resource Department should keep an eye on the interpersonal
relationships of the employees in the bank as it can harm the functioning of the
banks and can impart a very negative impression on other employees and the
internees.

6.1.1. Interpersonal Relationships in Branch Operations

Competition inside the department with other employees can encourage
employees to work more but if viewed unconstructively, many problems can arise
due to this reason.
Interpersonal relationships are usually affected when the employees are in the
quest of competing each other. This approach no doubt is positive but at the very
same time it may result into antagonistic behaviors. Employees who lead in the
competition and who are able to create a good impression on the upper
management often find difficulty in adjusting with their colleagues.
Similar situation exists in the Branch Operations. It has five desks that deal in all
the major important processing of the bank. The employee’s work differs but

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requires coordination for the efficient working of the department. Lack of
coordination may prove to be disastrous.
Employees in the department at times even pass comments on each other. No
doubt such incidences are very rare but are very shocking for the interns and leave
a very bad impression. Inspite of these practices being uncommon but may get
tense at times leave a very negative impression.

6.1.2. Interdepartmental Relationships

Sense of competition as discussed above can no doubt be a motivating factor for
the employees but it entirely depends on the context in which it is perceived and
practiced. The haste for taking a lead often results in lack of cooperation and a
rude behavior with the employees of other departments. Gradually this type of
behavior develops negative attitudes among the employees and often creates
tension and anxiety. The work environment gets disturbed and employees often
get frustrated. Also, employees waste their time in backbiting and gossips that
only create bad feelings for each other.
In case of minor mistakes by the employees of the rival department, it is often
made an issue and the qualification, devotion and concentration to the work is
challenged.
Furthermore, mistakes are often not accepted and others are held responsible for it
to avoid any trouble from the upper management. In this struggle other employees
who are never involved in such activities also have to face trouble.
Such problem arises almost daily as departments are interlinked and dependent on
each other for their processing. The employees, no doubt do not let the customers
to suffer but extreme behaviors may not prove beneficial for the employees and
ultimately for the customers.

6.1.3. CAUSES

 Differences in the Backgrounds

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Interpersonal relationships of the employees in Branch Operations are apparently
constructive. But in fact, the employees have personal conflicts, prejudices and
jealousies for each other. There are many reasons for such behaviors. The first
and foremost is the differences of the employees due to different backgrounds.
Their educational qualification and experiences differ. This nonuniformity has
basically generated conflicts. Also, Personality clashes has resulted into conflicts

Consideration and solution is required by the manager for this problem as it can
prove to be highly unproductive. The manager should try to make them work as a
team. In addition to this, training programs can be arranged for those who fall
behind in education from the other employees of the department to enforce
uniformity in the department.

 Politics in the Bank

Political behavior describes the activities carried out for the specific purpose of
acquiring, developing and using power and other resource to obtain one’s
preferred outcomes.2 Favoritism and politics in promotions, rewards, etc., are also
the main factors that added to the negative interpersonal relationships. Also,
excessive competitiveness among the employees has created political attitudes
and behaviors in an effort to gain advantage over another.

Politics and favoritism observed during hiring, promotions, training, rewards, etc.,
is a major issue in almost all the organizations. It is also the main cause of job
dissatisfaction, low morale, low productivity, etc. similar problems exist in
Citibank as well which has created further problems.

Politics has been observed due to personal prejudices hindering the work and
future prospects of the other employee. This is in fact one of the major causes of
anxiety and tension among the employees. In other departments, this problem has
even forced employees to leave their jobs.

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6.2. OVERBURDEN EMPLOYEES
As far as the working of the bank is concerned, Branch Operations is perhaps the
most imperative department of the bank. Its importance can be judged by its
responsibilities and duties that it performs. This is the place for actual transaction
and it deals with all the paper work. Furthermore, other departments of the bank
heavily rely on the processing of branch operations making it the busiest
department of the bank. Also, employees have to be very careful in their work as
a minor mistake in any transaction from their pert can lead to disaster.
The dependence of other departments and the pressure that it has to bear makes
it’s employees overburden generating the need for more staff. The employees are
always found very busy in their job. They even try to utilize their lunch break to
finish their work in time. Although the bank timings are from 9:00 to 5:00 but the
employees are often found working till late at night. Often the expense table is
found to be very much overburdened at the end of the month. It has to compile
and prepare summary reports of the various expenses occurred in the entire
month.
The over timework can also be perceived as a dedication and commitment on part
of the employees. But at the very same time, the fact that it proves the workload
and the work pressure cannot be denied. This usually creates a negative stress on
the employees and can affect their efficiency and effectiveness.
Thus, the department needs more staff to reduce the burden of the employees and
to enhance the quality of the work. This will help the employees to work more
effectively decreasing the chances of mistakes that can ruin their career.
The Human Resource Department should consider this problem and should take
concrete steps to solve it.

6.3. PHYSICAL ENVIRONMENT OF THE WORK PLACE

Physical environment has a direct impact on the quality of work. Employees
working in a secure and a better physical environment are able to concentrate

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more in their work. Organizations have to provide such an environment to their
employees where they can fully give attention to their work.
In addition to this, employees and customers judge the organization by its outlook
and other aspects of physical environment. An organization equipped with the
latest technologies that ensure security and provides a soothing environment to its
employees can best extract the work from them. It also makes them feel that they
are being given importance and consideration by the bank hat further enhances
their commitment and dedication to their work.
Citibank provides a healthier working environment considering every aspect for
improvement. Organizations should not expect much from their employees if they
provide poor working conditions to them as it distracts their attention from their
work.
Utilizing the latest technologies branch operations apart from being centrally air
conditioned with the rest of the branch is fully equipped with comfortable
furniture and computers for carrying out the routine work. The department is
arranged in such a way that a single glimpse gives an idea of a professional
environment.

6.3.1. Disturbance: Hindrance in Efficiency

Inspite of providing a good physical environment one factor is missing. Being the
busiest department of the bank it requires a work environment that enables them
to pay complete attention towards their work.
The physical setup in the department leaves little privacy for the employees. The
department is in fact very small and looks very jam-packed. The desks are placed
very near to each other and look crowded with the cupboards. A normal
conversation can easily disturb the other employee creating obstruction in his/her
work. This factor affects their concentration thereby affecting the quality of their
work. Considering the importance of this department and its functioning efforts
should be done to reduce this problem.

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Usually, the department gets overcrowded after the lunch break. This is due to the
fact that the employees of other departments gather here for the completion of
their processing or if there is any error in some transaction. Moreover, the
department was crowded with interns that added to their disturbance.

6.4. LACK OF WAITING AREA

Lack of waiting area brings forward another major flaw of Citibank that can
challenge its professionalism. It looks very awkward that a multinational bank
offering a wide variety of products and services and successfully competing in the
market lacks a place where customers or other guests wanting to meet the
employees doesn’t have a place to sit and wait for them.
Moreover, the situation becomes worse when the guests have to stand outside the
department until the guard informs and takes permission from the respective
employee. After the permission has been granted they have to sit in the office
where privacy lacks putting them in a state of discomfort. The visitors also feel
hesitant while talking to or discussing their problems with the employees. This
creates a poor impression of the bank. No doubt, the department is restricted for
the customers but vendors and the service providers to the bank may require
meeting with the processors.
From the employee’s point of view, they are in a similar state as to that of the
customers. This creates an uneasy atmosphere in the department discomforting
both the sides. Moreover, customers also fear lack of confidentiality further
adding to their uneasiness.
Customers who are impressed by the architecture of the bank, lack of a sitting
place is a sheer disappointment for them. The building no doubt is very
impressing but it has a few discrepancies. Such important imperfections needs
immediate solutions.
In the present day, where customers needs and comfort has gained tremendous
importance and where only those organizations survive and prosper that think and
act on behalf of customers, are ranked poorly in the opposite case. Physical

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structure and working environment creates the image of the organization. If the
very first impression is poor, customers expect less of them.
Since the bank gives the customers the top most priority, steps should be taken to
make them more comfortable on all the levels

6.5. EXPERIENCE AND SKILLS: A CRITERIA FOR HIRING

Every organization, which is dedicated in competing in the market, has a well-
defined recruitment policy. Every such decision depends entirely on the skills,
education, experience and other such factors required for a specific occupation.
Recruiting is the process of finding and attracting capable candidates for
employment3 The Human Resource Departments has to analyze and identify all
the requirements of the job and then accordingly hire individuals. Also, every
organization uses established methods of inviting candidates for the hiring
process. The bank due to it’s good image leave little constraints for the bank and
attracts a large pool of candidates benefiting the bank to select the most talented
and suitable person for the job.
In Branch Operations, vacancies rarely arise as normally other employees are
either rotated or are promoted to these positions. In the case of this specific
department, practical know-how along with education in the relevant field is
significant. While hiring employees for branch operations specifically, the bank
doesn’t consider the working experience of the candidate in the relevant field.
Employees are usually young and have just ended with their studies.
Work experience also reduces the cost of on-job-training of the employees.
Practical knowledge already gained in the relevant field would decrease the
waistage of time and effort of the trainer and the cost of the bank.
At the very same time, another drawback arises in the recruitment process of
Citibank if experience is made criterion for hiring. It would discourage fresh
graduates having fresh minds and who are ambitious, highly motivated and who
want to prove themselves. But considering branch operations particularly,

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candidates already trained will be beneficial from the bank’s point of view as the
working of this department is almost similar to any other bank.

6.6. COMMUNICATION AMONG EMPLOYEES

Communication is the process of transmitting information from one person to
another.4 In these days of Multinational cultures, where organizations extend their
boundaries throughout the planet and where Corporates’ rule the world, effective
and fast communication has become essential for the survival of the
organizations. Effective communication is the process of sending a message in
such a way that the message received is as close in meaning as possible to the
message intended.5 Organizations cannot afford to compromise on the
development of communication medias and channels. The greater the
organization has the adaptability of new technology, greater is the likelihood that
the organization will have less discrepancies in its functioning.
While discussing Citibank and specifically Branch Operations, any flaw in the
communication system will directly influence the functioning of the bank and in
extreme cases may result in the financial losses of the bank thereby affecting its
credibility. To prevent any possible error in this system, the bank apart from
emphasizing the verbal communication through face-to-face meetings and
telephonic conversation also fully utilizes the electronic medias especially the use
of e-mails via Internet reducing cost and time.

6.6.1. Verbal Communication

Verbal communication is face-to-face conversation, group discussions, telephone
calls and other circumstances in which the spoken word is used to transmit
meaning.6 The bank emphasizes on effective communication program at all levels
in the organization. Managers are responsible to ensure that employees are
informed of business objectives, policies and performance so as to generate better
understanding. Employees have an equal responsibility to feedback information,
ideas and suggestions to management. For better communication managers should

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convey the message properly and the receiver should receive properly.
Communication within the Branch Operations is sometimes affected due to
disturbances and the inability of the manager to convey it properly. Accent and
pronunciations often create problems for the receiver.
Furthermore, meetings are rarely arranged in this department. Meetings are
important for keeping the employees informed about progress and new plans of
the organization. Inside the branch, telephones are widely used for
communication with other employees.

6.6.2. Nonverbal Communication

All the Citibank branches are linked together through a computer network.
Communication with the employees of other branches is often nonverbal and is
done through e-mails in case if it requires no urgency other wise telephones are
used for verbal communication. Communication brings forward another problem
that is observed in almost every organization of the world. These are the
grapevines, gossips and different barriers in the communication system.
Grapevine is an informal communication network among people in an
organization.7 In verbal communication monitoring is difficult while nonverbal
communication can be monitored easily.
Citibank N.A, therefore routinely monitors the messages of the employees. They
even reserves the right to retrieve the contents of the messages for the purpose of
monitoring if the use of the e-mail system is legitimate, to find messages lost due
to computer failure, to assist in the investigation of wrongful acts or to comply
with any legal obligation.
To further prevent any misuse of the e-mail an employee will be accountable for
all activities created under his/her password. According to Citibank N.A,
Pakistan’s standard employment policies unauthorized use of a password is
treated as a gross misconduct. Therefore computer passwords and e-mail
passwords should never be shared with other employees in any case.

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Due to the strict policy of the bank so far no such incidences have been found.
This factor provides additional security to the employees of the bank where work
force diversity exists.

6.7. NEWSLETTER REQUIRED

The newsletter is designed to provide sound internal communication to employees
regarding important information they need to know, activities happening in the
organization and any thing else of interest.8 The basic aim behind these programs
is to make the employees aware of what is happening around them to vent
frustrations maintaining and enhancing their commitment and loyalty towards the
organization. Newsletters are also the part of communication programs in any
organization. This missing factor points out another shortcoming in Citibank. An
organization’s newsletter is a means of providing information for employees in a
specific recurring periodical.

Employees often get frustrated when the organization doesn’t take them into
confidence and share the current happenings or incidences in the organization.
Things get even worse when rumors spread in the organization. A typical
newsletter gives all type of information related to the particular organization
including any success, losses incurred, threats faced by the competitors, stories
about employees receiving awards on some extra ordinary performances, etc.
newsletters are the best way to communicate detailed and technical information.
Branch operations can make best use of it by knowing the growth rate of the bank,
expenses incurred, increase or decrease in the number of customers, change in the
policies of the bank etc. the bank can utilize the newsletter for taking suggestions
of the employees and to take them into confidence if any change in the
organization is introduced or if the bank is passing through a decline stage, etc.
this will prevent the spread of rumors that only increase frustration. Contrary to
this greater loyalty on the part of the employees can be expected.

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6.8. DEFICIENCY OF LOWER STAFF

6.8.1. Responsibilities of Lower Staff in Branch Operations

The importance of lower staff in any organization can never be overlooked. They
fully participate in the functioning of every organization. The lower staff in
Branch Operations are as much as part of the bank as any other employee or a
manager. Their code of conduct, dress code and duties assigned and their
efficiency completely explains their role and importance in the operational
activities of the bank.
The lower staff in the bank has to perform various duties, namely, receiving,
sending and replying important faxes, attending and taking messages on the
telephone in the absence of the employees, carrying out the paper work, ordering
for food and tea and many more.
Branch Operations heavily rely on its lower staff for its processing as it highly
correlates with other departments of the bank. Any irresponsibility shown by the
lower staff can result in misplacement and loss of the necessary documents. They
have to be very careful in filing the papers, stamping the cheques and in bringing
and taking the papers to other departments.

6.8.2. Need of More Staff

If the work performed by the lower staff and their number in the department is
compared it becomes quite obvious that they are overburdened. The fact can
never be denied as Branch Operations has only a single lower staff member to
carry out the above mentioned activities.
A single person is often found in a state of confusion as to decide which work is
more important and should be finished first. He has to receive and send faxes and
to report it to the concerned employee, photocopying the papers and documents
asked by the employees, take signature cards of the customers for microfilming
and bring them back, etc. Every day he has to finish all the hectic and tiresome

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work including taking papers from one department to the other. This can affect his
willingness to work attentively and with full concentration.
It seems very unprofessional and unkind attitude on part of the bank towards the
lower staff. Considering the demand of work in this crucial department and the
fact that other departments depend on this core department for their functions and
processing, the bank should hire more staff.

6.8.3. Low Salary Packages

Inspite of being over worked, the lower staff is not paid accordingly. They have to
work even when the employees leave the bank revealing that their work exceeds
their work time. Maximum salary paid to the lower staff never exceeds Rs.5000
and ranges from Rs.4000 to 5000.
Their salary package shows that the bank is not very fare with it’s lower staff.
Their work requires diverse job demands and need consideration of the bank on
their pay packages.

Moreover, their employment is on contract basis rather than permanent basis.

Their contracts are renewed yearly, upon which they are given minimum
increments towards their salary. The minimum wage and a small increase in the
pay demotivates them to work. The bank should review the pay packages of the
lower staff, as their importance cannot be undermined.

6.9. EMPLOYEES TRAINING PROGRAM

Employee training is important as it leaves little chances of job ambiguity.
Employees training can be discussed from two aspects. Firstly, new employees
hired are trained initially and then training programs are designed for the
employees’ already working in the bank. The training programs are offered to the
managers and the employees depending upon its requirement and their positions
in the bank the ultimate purpose of which is to maximize organizational
productivity.

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Training programs are important as it polish the skills and abilities of the
employees. It also reduces the boredom of employees who get tired of doing a
routine tiresome work. Branch Operations require such programs to motivate it’s
employees.
Newly hired employees are rotated are given on-job-training and are rotated in
every department covering every desk so that they get familiar with the functions
and operations of the bank apart from being socialized. Socialization is a process
of adaptation that takes place as individuals attempt to learn the values and norms
of work roles.9 On-job-training places the employees in actual work situations and
makes them appear to be immediately productive.10 During this process every
existing employee has to cooperate with them explaining their work and posts in
the best possible way. Only then they are trained for the specific job for which
they are hired. This helps in the proper and deep understanding of the
organization. Also, it creates a friendly environment for the new employees
helping them to adjust in the new environment.
After the in depth orientation of the bank, a senior employee gives guidance
through directions, advice and criticism to accelerate the growth of the new
employee. This enhances his/her knowledge and expertise and the employee is
then ready to take the task.
For the existing employees of Branch Operations training courses are conducted
on an annual basis for their development. Employees also prepare presentations
that further enhance their abilities and increase their confidence. But the
employees rarely participate in the presentations. The training programs of the
employees and the manager differ.
Employees training needs are discussed with the manager on an annual basis.
Training solutions are delivered through the on-job coaching by the manager or
any other concerned employee and formal training events are organized by either
the Training Center or suitable external sources.
Nomination for the training program is made only after the discussion of its need
with both the immediate manager and the Training Manager.

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The manager and the employees have to satisfy certain prerequisites, that is, they
have to give internal exams and prove that they are capable of taking a new
course and that they will make best use of it.
Citibank also sends its employee abroad for specialized courses in the banking
related subjects. But this practice has become very rare due to the shortage of
funds. The bank now only sends the employees at the managerial level. The trip
ranges from a week to few months. All expenses are beared by the bank itself.
The selection of the managers is based on their own personal interests for a
particular course and above all his potential and the expectations that the bank has
from the manager.
Since the Citibank spends its money on the employees, the bank is very careful in
selecting the employees for the courses. The bank can only achieve its objectives
successfully depending on the employee’s willingness, interest and effort to make
best use of the course. Also skills of the employee are also important for the
specific training program.
Citibank has another benefit of the training courses. The employees can carry out
their routine task along with the training because they don’t have to look for other
institutes that provide training in the respective area. This prevents the bank from
granting them study leaves causing no disruption in the work.
The major flaw observed in the selection of employees for the training purposes is
politics and favoritism to push the desired employee upwards.

6.10. INTERNEES
In almost all the organizations of this day, internees are welcomed due to many
reasons. They may get inexpensive help for the operational and administrative
activities enabling them to concentrate on other important work. Also, this may
help the organization in building its image for educating and training students by
giving them a practical and professional environment to work.
Secondly, organizations along with good image and getting inexpensive help can
reduce the cost of on-job-training by hiring the already trained interns. Many

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organizations keep an eye on their internees and maintain their record. Usually
internees who have performed well during their internship are preferred for jobs.
Citibank make full use of this opportunity and fully utilize their services all round
the year. Like many organizations, Citibank also gets a bit overcrowded with
internees. No doubt, the departments have a fixed number of internees and their
record is maintained properly but during the summers when most of the
educational institutes have an internship requirement for their students, the bank
gets crowded.

6.10.1. Selection of Interns

Internees can apply directly to the bank or to the department or through Human
Resource Department. Those who are interested, submit their C.V’s as early as
possible. Internship is offered on the basis of assessment done through the given
information in the resume and finally by the interviews. Very few are lucky
enough to find an opportunity to work in Citibank due to it’s prestigious image
and their relatively strict requirements for internship.

6.10.2. Low Quality work Taken from Interns

Like many other organizations, Citibank do take internees who work for them for
a short period of time. But usually internees do not have a very good experience
in the bank. Internees often get excited to work in a multinational bank, which has
an excellent image and professional environment. They are often mistaken by the
bank’s attitude towards their customers. They perceive that they will be treated in
the similar way. But it is very disappointing for them when they find that the
image they had created about the working environment that they will get in the
bank is in fact absolutely different. They are in a false perception when they
believe that they will get quality work to do, which will enhance their learning
and polish their abilities.
Usually, internees are engaged in low quality often-clerical work. Filing of the
documents is left for the internees. it is often a bad luck for the interns When the

48
audit of the bank is near as they give internees the task to complete and check all
the documentation and the records kept in files. Internees also have to arrange the
files in proper order.
In branch operations, internees had to check all the necessary documents in the
account opening forms for all the accounts that can be opened by the bank.
Account opening forms had to be arranged according to their account numbers
and it consumed and wasted internee’s time and effort.
Apart from the account opening forms, they also had to complete checking of the
records on other desks in the department. In case if any document was missing
they had to search for it in all the relevant folders. They had to make the lists of
all the account holders showing their account numbers, name of the account
holder and the code of the Personal Banker. Every Personal Banker has his own
code number which is used instead of their names. These lists were then attached
in the folder having the account opening forms along with necessary documents
of all the account holders mentioned in the list.
Internees were also called from other departments for this purpose that prevented
them to get orientation of other departments. By the time they finished this work,
their tenure for apprenticeship had already ended.
Moreover, internees are also rarely allowed to operate the computer systems for
security purposes and due to the fear of losing important data. Any leakage of
information from the bank can destroy its image and would make them
answerable to their customers decreasing its credibility as well.
All the above-mentioned work taken from the internees could never increase their
knowledge and understanding about the branch operations and it’s processing. On
the other hand, if proper attention is given to the internees it would be very
beneficial for them.
Thus, it is always unfortunate for the interns when the bank’s audit is near. No
doubt, in normal circumstances they have to work in similar areas but the
workload doubles in the latter case. This only adds to the disappointment on the
part of internees and thus increases their frustration. Many internees also leave

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their internship in the bank if they find another better opportunity to work in some
other organization where internees are entertained properly.
The kind of work taken from the internees also shows the inefficiency and
laziness on the part of the employees for not maintaining the records. The data
when kept improperly also wastes the employee’s time in searching for it.

6.10.3. Lack of Intern Training Program

Low quality work taken from the interns also brings forward another flaw in the
Citibank system, that is, the lack of intern training program. It is an art to make
other people work and to extract as much from them as possible especially from
temporary employees who are not even paid. This extraction of work can also
have a reflection of the intern’s talent and ability that can ultimately give good
results.
It should also be noted that employees in Citibank are already under stress due to
overburden of work. This factor may also lead to unwelcoming attitude towards
the internees. The employees have to concentrate on the work that is more
important therefore they feel that it would be a mere wastage of time explaining
the interns in detail what is required of them.
Since the interns who perform well during the apprenticeship are included in the
good books of the bank and are then considered for employment, Citibank should
have an intern-training program to prevent the wastage of cost and effort of the
on-job-training.

6.10.4. Intern Evaluation

Internees are under observation throughout their internship by the person to whom
they are made subordinates. The supervisor carries out their evaluation in secrecy
and is then sent to the Human Resource department in Lahore. This evaluation is
recorded and helps them to have some idea of the prospective internee during the
selection process.

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Internees get a certificate of completion at the time when they have ended with
their internship that gives a brief description of their abilities and attitude towards
their work.

6.10.5. Behavior with Interns: Lack of Cooperation

Citibank employ interns but is not very friendly to its interns. As a culture of
many multinational organizations, Citibank hesitates in giving any type of detail
information related to the bank. This creates many problems for the interns
especially when they are righting an internship report and need their cooperation.
Employees’ attitude is normally very cold with their interns. Interns are entirely
dependant on their personal efforts to take out quality work for themselves and to
get the relevant information for their internship report. They have to prove
themselves to impress their supervisors that if they are given a chance to work in
the bank, they will be an asset to them and will be highly committed to their work
Internees who succeed in impressing them can think of little flexibility. Others
have to face an unfriendly behavior from them.
A valid reason for the lack of cooperation from the employees as mentioned
earlier is that it may be a preventive measure for the protection of the highly
sensitive information which if gets leaked can create trouble for the employees.
Due to the very same reason, employees are hesitant to show interns the software
that the bank uses for keeping the records of their customers, their transactions
and other necessary relevant information. They are rarely given a chance to learn
the software and its operation.

6.11. LACK OF MOTIVATION

Motivation is the set of forces that cause people to behave in certain ways.11 Many
interns in Branch Operations have observed lack of motivation. The employees
are no doubt given incentives, bonuses and other rewards on better performances
but inspite of the bank’s effort to satisfy their need of self-actualization, many
employees in this department are demotivated.

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Unwillingness to work in an organization is a very important problem that needs
to be solved at once. The HRM have to identify the main cause and take effective
steps for improving the situation. In this present day where human resource has
gained much importance and consideration from all over the world for the
efficient and smooth running of the organizations, human related problems needs
timely solutions.
Branch Operations requires normal routine procedures making employees often
exhausted and they feel boredom due to the same work routine initiating a need
for change.
In addition to this, employees are much overburdened. When compared with the
salary their work timings and the amount of the work exceeds the bank timings.
They have to work overtime to finish it and often the employees leave the bank
very late.
Favoritism and politics in promotions also frustrate other employees and they are
usually found in a bad mood. At times they even talk harshly with other
employees who are dependant on them for the completion of their processing.
They feel ignored and unimportant reducing confidence and ultimately creating
unwillingness to put an effort in their work. Also, employees sometimes leave
their work and waste their time in chatting with each other.
These factors should be considered and reported by the manager to the Senior
Managers or the HRM of the bank to avoid any such problem.

6.12. JOB ROTATION

Job rotation is an alternative to job specialization that involves systematically
moving employees from one job to another.12 Job rotation is essential in any
organization as in the absence of the concerned employee; any other person can
carry out his/her work.
Job rotation does exist in the bank but it is very rare. Usually, banks require job
rotation more than any other organizations to prevent any inefficiency in the

52
absence of the employee. Moreover, it is a tool of removing boredom of the
employees in the organization.
In Citibank job rotation is observed normally at the time of promotion. Discussing
specifically Branch Operations, this essential factor is lacking. Employees in this
department cannot handle the work of the other desks except the Manager
himself. It has been observed that while directing the nonrelated employee in the
absence of the associated employee, the manager often gets frustrated as he gets
disturbed every time the employee asks for guidance. This affects the functioning
of the department, as it cannot afford any obstacles in it’s working.

6.13. IMPROPER ADMINISTRATION IN BRANCH

OPERATIONS
The managerial style in an organization has a direct impact on the performance,
productivity, satisfaction and turnover. While talking about the managerial style
of Branch Operations, the manager lacks few qualities of a good manager and a
good leader. The important aspect noticed was that the manager cannot handle
adverse situations properly and loses confidence in his abilities. He is overcomed
by the fear decreasing his chances of finding a solution and defending himself.
Employees when observe their manager frightened takes a negative impact.
The Branch Operations manager no doubt gives the sub-ordinates proper
guidance; treat them with respect and dignity. The only problem is the lack of
proper control and inability to face problems. Controlling is very crucial as Sub-
ordinates take the manager for granted if he is not able to effectively control the
operation and processing of the department
Controlling is the management function concerned with monitoring activities. 13
The manager has to keep an eye on the work of other employees for the efficient
functioning of the department as a whole. Due to this problem, employees often
make mistakes affecting the credibility of the department. Improper management
style adversely affects the employees’ morale. Low morale, in turn causes decline

53
in productivity and thus affecting the quality of services provided to the
customers.
Furthermore, the Operations head that is the Senior Manager of this department
believes in autocrative leadership style worsening the situation for the Operations
Manager. Fear as a management style can accomplish short-term results; the long-
term consequences can be devastating. Motivational management produces better
results those who focus on positive reinforcement rather than fear and
intimidation are the successful managers.

6.14. TECHNOLOGY
6.14.1. Adaptability
Citibank has a greater adaptability in acquiring latest technologies. Being a
multinational bank it has an easy access to all types of new development that can
add to the better functioning of the organization. This acquisition can either be the
addition to the physical environment or the computer software’s etc.
Implementation of ATMs all round the world is another example. The up to date
computer systems along with the advance software that aim at providing greater
security and efficient maintenance of records of the customers with the least
possible errors proves the greater adaptableness to the new emerging technologies
that other local banks lack.
Being a multinational, the bank has much more resources that enhance their
capabilities to compete in the market. Innovative service methods attract a large
pool of customers that triggers the growth rate of the bank. Self Service Banking
and Citiphone Banking in Pakistan have further added to the goodwill of the bank.

6.14.2. Slow Networking System

Every employee of the bank is of the opinion that the networking system is very
slow creating hindrance in the work of the employees. It affects the employee’s
work, as they have to feed the data at every next moment.

54
All the branches of Citibank in Pakistan are interlinked through Internet with the
Karachi server. The Islamabad branch has to create a link with this server. The
reason is that all the information is fed on this server, which requires time to
access that information. Due to this problem, the communication system slows
down affecting the work of the employees. They have to wait for the network to
revive.
Moreover, the computers have Pentium II processors and needs to be upgraded.
By doing this the speed of the system will improve.

6.14.3. Lack of Basic Computer Skills

The employees of Branch Operations are not aware of the basics of computer. In
the present day where computer has become a necessity of every organization and
computer literacy has gained extensive importance, the employees of this
department lack knowledge in this field.
No doubt, the employees are well aware of the routine use of the computer and
the software but a certain deviation from a normal use creates problem. The bank
has a technology department whose employees can be called upon if any problem
arises either in the hardware or the software of the computer system. These
experts are ready to solve the problem every time when they are called for help.
Inspite of the availability of experts, the employees should know how to resolve
minute problems by themselves to reduce the waistage of time. They have to wait
for them and in the meanwhile their time is waisted as all their work is dependant
on the computer system. Employees are not even aware of the use of MS-Office
that is important for every type of office work in every prosperous organization.

55
CHAPTER 7: FINANCIAL ANALYSIS

Financial analysis of any organization is the evaluation of the performance of that

specific organization with the help of financial statements available in the annual
report. Every organization has to prepare the financial statements. Banks prepare
it in accordance with the requirement of the SBP under the banking companies’
ordinance 1962. Thus, keeping in view this requirement Citibank N.A, prepares
the financial statements annually.

7.1. Accounting Policies of the Bank

Financial statements of the bank are prepared in accordance with the requirements
of the SBP under the Banking Companies Ordinance 1962.
According to the new accounting policy and with the guidelines contained in the
SBP (Circular No. 20,dated August 4,2000.) any difference between the carrying
value and revalued amount is taken to a surplus/deficit on revaluation account and
is shown separately in the balance sheet previously, these investments were
carried at cost less amortization of premium or discount.
Liability method is used for the bank accounts for deferred taxation. Provisions
for non-performing advances are made against specific non-performing advances
determined on the basis of the Prudential Regulations issued by SBP and the
banks own criteria. The cost for fixed assets is depreciated over the useful lives of
the related assets under the straight-line method for vehicles and the diminishing
balance method for building, furniture and equipment. Markup/interest on
advances and investments is recognized on an accrual basis except in the case of
non-performing advances. Assets and liabilities in the foreign currency are
revalued daily into rupees using spot rate published by the SBP. Forward
exchange contracts related to foreign currency deposit for which forward cover is
taken fro the SBP are revalued using the straight-line method.14

56
7.2. Balance Sheet Analysis
The analysis of the balance sheet of Citibank N, A. is done keeping in view the
figures available in the annual report of Citibank N.A, for the financial year 1999
and 2000. Balance sheet is the summary of a firm’s financial position on a given
date that shows total assets, total liabilities and owner’s equity.15

7.2.1. Assets Side

Asset side shows an overall increase of 3.05%. This is mainly due to the increase
in the balances with other banks that offsets other negative changes in the balance
sheet eventually giving positive results. These changes are discussed in detail as
under:
A decrease in Cash is observed in the financial year 2000. It was mainly due to
the substantial decrease in the Cash in Hand both in the local and foreign
currency. On the other hand, deposits with the SBP have increased but couldn’t
offset the decrease in the cash in hand resulting in the overall decrease in cash of
-4.6%. Balances with Other Banks have increased sharply and a change of about
680% is observed. It was due to the increase of balances in both the current and
placement accounts in the banks within Pakistan while a decrease is observed in
the balance with the banks outside Pakistan. Money at Call and Short Notice also
showed a considerable increase of about 250%.
The ratio of balances with other banks and money at call and short notice should
be 68:32 as the requirements set by the SBP. However, Citibank has a ratio of
44.38:55.82 in the FY 2000 and a ratio of 26.20:73.79 in the FY 1999 showing
considerable improvement.
Investment shrinked to -3.2% in the fiscal year 2000 due to the decrease in
securities invested in the Federal and Provincial government securities. Operating
Fixed Assets decreased mainly due to the disposal of the vehicles to the
executives and high accumulated depreciation for building at freehold land, office
equipment, furniture, vehicles, fixtures, for the year 2000. Other Fixed Assets
also depicted a prominent decrease of -20.80%.

57
Liabilities Side
Decrease in the saving deposits has found to be the major cause of decline in the
overall Deposits of the bank. The figure shows a substantial increase of 105% in
the Borrowings from other Banks. This was mainly due to the borrowings from
the banks within Pakistan in local currency.
The Net Assets shows a negative figure in both the FY 1999-2000. However an
increase in the net assets has been observed in the FY 2000.

58
 Table 7.2. Percentage Change in Assets, Liabilities and Shareholder’s
Equity.
31-Dec-99 31-Dec-00 %age
ASSETS Rs. In “000” RS. In “000” Change
Cash 7,368,481 7,028,202 -4.6%
Balances with other Banks 35,502 276,981 680%
Money at Call and Short Notice 100,000 350,000 250%
Investments 12,477,613 12,073,423 -3.2%
Advances-Net of Provisions 21,501,323 24,296,271 12.99%
Operating Fixed Assets 484,708 438,753 -10.47%
Other Assets 5,080,892 4,023,962 -20.80%
47,048,519 48,487,592 3.05%
LIABILITIES
Deposits and Other Accounts 38,800,980 36,158,239 -6.81%
Borrowings from other Banks, Agents, etc. 2,503,076 5,134,603 105%
Bills Payable 520,004 465,084 -10.56%
Other Liabilities 5,690,461 6,808,545 19.64%
47,514,521 48,566,471 2.21%
Net Assets (466,002) (78,879) 83.07%
Represented by:
Head Office Capital Account
Accumulated Loss (466,002) (86,370) 439.54%
Surplus on Revaluation of Investments - 7,491 100%
(466,002) (78,879) -83.07%
Memorandum Items:
Bills for Collection 1,817,491 2,074,731 14.15%
Accept., Endorse. and other Obligations 3,680,129 1,689,142 -54.10%
Contingent Liabilities and Commitment
Source: Based on figures available in the financial statements, Citibank N.A, 1999 and 2000.

7.3. INCOME STATEMENT ANALYSIS

7.3.1. Gross income side

This side shows an overall increase of 11.28% in the FY 2000. The Mark up and
Interests declined to -15.5% but the negative impact was reduced by an increase
in the Cost on Deposits of 23.73%. The major loss of the bank was observed in
the reduced Profit over its Investments that was -47.63% as it decreased to

59
Rs. 3,339 in 2000 from Rs. 6,376 in 1999. Other Operating Income also
increased to 4.73% due to the losses recovered from credit.

7.3.2. Expense Side

The income statement shows the negative figure in the expense side of both the
financial years under consideration. This shows a high expenditure in operating
expense and accumulated losses have been reduced to 11.7%. Provision for non-
performing Advances, has been controlled and has eventually reduced the losses
as the figure changed from Rs.55, 844 in 1999 to Rs. (41, 930). The bank has
controlled the Administrative Expenses by a reducing the salaries, allowances
and other benefits given to the employees. A sharp increase in the expenditure is
observed for advertisements and publicity of the bank although donations, legal
charges and rentals of operating leases have been controlled and reduced.
Provision for Letter of Credit and Guarantee has also decreased remarkably to
-89.5% reducing the overall figure of the expenses.

7.3.3. Net Profit Side

The Profit after Taxation shows a healthy rise of 122.78% in 2000. A substantial
amount of Accumulated Loss is Brought Forward that cannot be offset by the
profit after taxation in FY 1999. However, the Accumulated Loss Carried
Forward to the FY 2001 is less as compared to that of the year 2000. Provision
taxes were paid in the FY 1999, which is one of the main reasons for high losses
of the bank.

60
61
7.4. NET CASH FLOW

7.4.1.Cash Flow from Operating Activities

Citibank shows a negative outflow for operating activities for both the FY 1999
and FY 2000. However, the bank was able to overcome its losses in the FY 2000
but was unable to increase the cash flow from operating activities and to pull it
from the negative slope to the positive one. The percentage difference observed
was 422% but could not support the liquidity position of the bank.
An outflow of Rs. 1,862,803 is observed for the operating assets in the FY 2000
with a net change of (118)%.

7.4.2. Cash Flow from Investing Activities

Investing activities at Citibank showed net outflow of Rs. (132,271) million in FY
2000 against Rs. (66,348) million in FY 1999 mainly due to substantial increase
in the advance against subscriptions and fixed capital expenditure.

7.4.3. Cash Flow from financing activities

Increased borrowings from other banks have raised the net inflow from financing
activities. Cash inflow has increased to 300.3% depicting the use of short-term
funds to offset the outflow in the operating activities.

62
7.4. Percentage Change in Net Cash Flow
Cash Flow from Operating Activities 31-Dec-99 31-Dec-00 %age

Profit Before Taxation 1,032,207 516,219 99.95%

Less: Profit from Investment Securities (3,339) (6,376) (47.63)%

1,028,868 509,843 101.8%

Adjustment for non Cash Charges:

Depreciation 115,926 183,596 (36.86)%

Provision against non-performing Advances (41,930) 55,844 (175.1)%

Provision for Diminution in value of Investment - 2,508 100%

Provision for write-down in Value of non-banking
909 138 558.7%
Assets
Provision against Letter of Credit and Guarantee 7,185 69,000 (89.59)%

Bad Debts written of Directly 173,171 163,852 5.69%

Net profit on Sale of Fixed Assets (3,959) (605) 554%

Fixed Assets written off 16,259 36,524 55.5%

267,561 510,857 47.6%

1,296,429 1,020,700 27%

(Decrease)/Increase in Operating Assets:

Advances (2,926,189) 133,818 (2286.7) %

Government Securities 465,020 10,429,121 (95.54) %

Other Assets(excluding advance tax) 598,366 (224,186) (367) %

(1,862,803) 10,338,753 (118) %

(Decrease)/Increase in Operating Liabilities:

Deposits and other Accounts (2,642,741) (10,503,055) (74.84) %

Bills Payable (54,920) 132,438 (141.5) %

63
Other Liabilities 1,110,899 (325,803) (441) %

(1,586,762) (10,696,420) (85.2) %

Cash Flow before Tax (2,153,136) 663,033 (424.7) %

Income Tax Paid (190,245 (1,111,936) (82.9) %

Net Cash Flow from Operating Activities (2,343,381) (448,903) 422%

CASH FLOW FROM INVESTINGACTIVITIES

Advance against Subscriptions (50,000) - -100%

Fixed Capital Expenditure (116,391) (94,079) 23.7%

Sales Proceed of Fixed Assets 34,120 27,731 23.04%

Net Cash used in Investing Activities (132,271) (66,348) 99.4%

CASH FLOW FROM FINANCINGACTIVITIES

Borrowings from Other Banks Agents etc. 2,631,527 703,435 274%

Remittance to Head Office (4,675) (47,256) (90.11) %

Net Cash Inflow from Financing Activities 2,626,852 656,179 300.3%

Increase in Cash and Cash Equivalents for the
151,200 140,928 7.3%
Year
Cash and Cash equivalents in the Beginning of
7,503,983 7,363,055 1.9%
the Year
Cash and Cash Equivalents at the end of the Year 7,655,183 7,503,983 2%

Cash and Cash Equivalents

Cash 7,028,202 7,368,481 (4.62)%

Balances with other Banks 276,981 35,502 680%

Money at Call and Short Notice 350,000 100,000 250%

7,655,183 7,503,983 2.02%

Source: Based on Figure available in Annual Report, Citibank N.A, 1999 and 2000.

64
7.5. FINANCIAL RATIOS

7.5.1 Liquidity Ratios

Liquidity ratios measure the firm’s ability to pay of short-term debt. 16 Cash ratio
shows only a slight increase in the FY 2000 Current Ratio doesn’t show a healthy
sign as it is not according to the requirements set by the SBP, to maintain the ratio
at 1. In FY 2000, the bank had a current ratio of 0.34 that has slightly increased
from 0.29 in the FY 1999. Citibank’s current ratio depicts that it is not utilizing its
current assets relative to its liabilities and is unable to meet the requirements set
by the SBP. Moreover the bank has a very unstable liquidity position, as it is
unable to fulfill the central bank’s obligation.

7.5.2. Profitability Ratios

These ratios indicate the firm’s overall effectiveness of operation.17 The profit
Margin ratio shows a healthy sign for 2000 as the return on markup has
increased. The ratio for the Return on Assets increased from (0.007)% to 0.008%
that shoes an efficient utilization of assets eventually improving the earning
power.
The Return on Equity ratio for Citibank has decreased. The decrease in return on
equity ratio depicts that the utilization of equity in generating net profit has drop
off. Decline in the return on equity has also improved the bank borrowings that
eventually have increased the liquidity of the bank.

7.5.3. Asset Utilization Ratio

Citibank has a high Receivable Turnover in the FY 2000. It depicts the success of
the bank in collecting its receivables in time. Fixed Asset Turnover and the total
asset turnover has decreased in the FY 2000 showing the reduced contribution of
fixed and total assets in the generation of sales.
Payable Turnover of the bank has also decreased showing the increase in time
required to pay off its credits.

65
 Table-7.5. FINANCIAL RATIOS

RATIO/MEASUREMENT 31-Dec-99 31-Dec-00

Liquidity Ratios
Cash Ratio 0.31 0.29
Current Ratio 0.29 0.34

Profitability Ratio
Profit Margin (0.06)% 0.84%
Return on Assets (0.007)% 0.008%
Return on Equity 0.71% (4.872)%

Asset Utilization Ratio

Receivables Turnover 39.84 7.24
Fixed Asset Turnover 0.136 0.112
Total Asset Turnover 0.115 0.094
Payable Turnover 1.62 0.601

Source: Based on Figure available in Financial Statements, Citibank N.A, 1999 and 2000.

66
7.6. Graphical Representation of Growth/Loss

7.6.1. Balances with Other Banks (Rs.000)

6000000

4000000

2000000

0
2000 2001

Balances with other banks have decreased by 57.2% and has caused considerably
in decreasing the current assets of the bank.

67
 7.6.2. Other Assets (Rs. 000)

2001

2000

0 5000000 10000000 15000000

Other assets have decreased and a net change of 15.8% is observed. Eventually,
this has affected the overall fixed assets of the bank. Thus, the fixed assets of the
bank have lessened in the FY 2001.

68
 7.6.3. Borrowings from Other Banks (Rs. 000)

2001
2000
0 5000000 1000000 1500000 2000000
0 0 0

Borrowings from other banks have decreased. The net decrease in the borrowings
from other banks observed is 88.8%, which has in turn caused the current
liabilities to decrease.

69
 7.6.4. Net Assets (Rs. 000)

8000000

6000000

4000000

2000000 2000 2001

Net assets have increased in the FY 2001 and a net change of 18.79% is observed.
This is due to the greater increase in the total assets.

70
 7.6.5. Profit after Taxation (Rs. 000)

2001

2000

0 500000 1000000 1500000

.
A net change of 33.7% is observed that shows a healthy sign. This is due to the
significant increase in the net mark up interest income after provisions.

71
 7.6.6. Total Assets (Rs. In millions)

2001

2000

0 50000 100000 150000 200000

Total asset has increased by 6.6 % which is due to the significant increase in
net investment and in current assets.

72
 7.6.8. Deposit Growth Ratio (Rs. 000)

200000000

150000000

100000000

50000000

0
2000 2001

Deposits of the bank have increased by 12%. This is mainly due to the increase in
the saving deposits of the bank.

73
 7.6.9. Advances Growth Ratio (Rs. 000)

100000000
80000000
60000000
40000000
20000000
0
2000 2001

The net advances of the bank have been decreased by 12.7%. This has, to some extent, caused
the total assets to decrease.

74
REFERENCES

75
1
Griffin, Ricky W., (1997). Management. Fifth Edition. USA: Houghton Mifflin Company. p.582.
2
Ibid.p.524.
3
Werther, Jr., William B. and Davis, Keith, (1996). Human Resources and Personnel Management. Fifth Edition. USA:
Mc-Graw-Hill, Inc.
4
Griffin, Ricky W., (1997). Management. Fifth Edition. USA: Houghton Mifflin Company. p.540.
5
Ibid. p.540.
6
Ibid. p.544.
7
Ibid. p.551.
8
Decenzo, David A. and Robbins, Stephen P., (1996). Human Resource Management. Sixth Edition. USA: John Wiley &
Sons Inc. p.468.
9
Ibid. p.220.
10
Ibid.p.230.
11
Griffin, Ricky W., (1997). Management. Fifth Edition. USA: Houghton Mifflin Company. p.474
12
Ibid. p.295.
13
Decenzo, David A. and Robbins, Stephen P., (1996). Human Resource Management. Sixth Edition. USA: John Wiley &
Sons Inc. p.468.
14
Citibank N. A, (2000). Financial Statements, Karachi.
15
Van Horne, James C. and Wachowicz, JR., John M., (1998). Fundamentals of Financial Management.Tenth Edition.
USA: Prentice-Hall,Inc. p.121.
16
Block, Stanley B. and Hirt,Geoffry A., (1994). Foundations of Financial Management. Seventh Edition. USA: Richard
D.Irwin, Inc. p.54.
17
Ibid.p.140.