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Letter of Internship


In order to be able to cope with the changing environment it is necessary to
have some practical experience. As the student of Commerce we have to pass through
a series of various managerial techniques. During this practical course we are
provided with an opportunity to learn that how the theoretical knowledge can be
implemented on practical grounds.

I worked there in Habib Bank Limited for six weeks & it gave me a great
practical knowledge about the operations of an organization. In the following pages I
have narrated my experience, observation & all the working activities which I
observed during my internship.

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Dedicated to

My loving Parents
Respectable Teachers

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First and foremost all the praise is for Allah, the merciful and Beneficent, who
blessed me with the knowledge, gave me the courage and allowed me to accomplish
this task. Through I did not conceal myself capable to do so.
In addition to internship advisor Sir --------, I am especially indebted to all my
teachers for instilling in me enough knowledge to be able to carry myself efficiently
during my internship and complete this report.

Secondly I am bound to thanks the whole staff of Habib Bank Limited, Jalal
Pur Bhattian for such a cooperation and good time. In particular I am grateful to;

Mr. M. Shafqat Mehmood (Branch Manager)
Mr M. Farrukh (Assistant)
Mr. Shoaib Shahzad (Assistant)

for their inspiring guidance, remarkable suggestion and friendly discussion, which
helped me to learn and enabled me to complete this report.

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Executive Summary

Being a student of M Com in University of Sargodha, it is compulsory to
complete six to eight weeks internship in any leading organization. So I had selected
Habib Bank Limited (Jalal Pur Bhattian Branch) for this purpose. My internship
program was for the period of eight weeks (---------). HBL has not only provided me a
platform to applied knowledge and skills, but also provided me necessary training to
support this knowledge.
The report is about Habib Bank Limited. The report contains detail about what
I had learned in my eight weeks of internship in Habib Bank Limited Jalalpur
Bhattian It is divided into different parts like introduction of banking, introduction of
the HBL, vision & mission statement, its core values and corporate information which
includes organization structure, board of director and hierarchy of Jalalpur Bhattian
branch respectively.
Secondly, I explained the products and services of the HBL. Bank offers
different products like deposits, loan products (commercial and agriculture) and
business promotion scheme.
The purpose and scope of writing this report is to provide an overview of the
processes that is being practiced in the branch. As I have done my internship in a
branch, so I have tried to learn the basic banking procedures of different departments
in the branch. In the next part report contains the detail about various departments,
accounts opening, remittances, clearing, advances, Cash department, Credit
department and marketing department which are currently working in the branch.
In the next part, the report also contains the detail about the financial position
of Bank. I did financial analysis of HBL, which shows that HBL works in better way.
Each year it shows positive increments in its as well as its customers' financial health.
During my stay in the branch I have performed a SWOT analysis to find out strength,
weaknesses, threats and opportunities in the branch. On the basis of SWOT analysis I
have given some recommendations in the end.

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1. Industry Introduction 07
2. An overview of organization 08
- -- - History of Organization 08
- -- - Nature Of Organization 08
a. Vision Statement 09
b. Mission Statement 09
- -- - Main Features 10
- -- - Competitors 15
3. Organizational Structure 16
- -- - Hierarchy Chart 17
- -- - Number of Employees 20
- -- - Main offices 20
- -- - Comments on organizational Structure 22

4. Work done by Internee 23
5. Financial Analysis of Organization 31
- -- - Financial data of last year 39
a. Horizontal analysis 41
b. Vertical analysis 45
- -- - Significance of ratio 49
- -- - Components of ratios (formulae used ) 50
- -- - Interpretation of ratios 50
6. SWOT Analysis 61
7. Conclusion 62
8. Recommendations 63
9. Limitations 64
10. Bibliography 64
11. Glossary 65
12. Annexes 66

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A bank is an institution for the custody, loan or exchange of money for
sanctioning credit, for transferring funds by domestic foreign bills of exchange. It is a
pipeline through which currency moves into and out of circulation.
As it is clear from the definition of banking, the main activity or function of
banking is borrowing and lending of money with a margin of gain. However, as far as
the present day banking is concerned, there are a number of different banks, set up
under specific different objectives, performing various functions.


Banks are providing all types of banking services whichever permissible in the
country. These service are following.
Accepting deposits in saving, current and fixed accounts.
Borrowing funds and arranging finance from other banks.
Advancing and lending money to its clients.
Promoting the export of Pakistan & Making investment in other companies.
Sponsoring different scheme & transacting guarantee and indemnity business.
Financing of seasonal crops like cotton, heat, sugar cane etc.
Generating, undertaking, promoting etc of issuance of shares.

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It is the prime bank in the country established in 1941 having a registered head
office in Karachi. It was nationalized in 1947, but recently on 26
February 2004 it
has been privatized by the Government of Pakistan and is taken over by Aga Khan
Fund for Economic Development (AKFED). They acquired 51 percent of shares of

Brief History of HBL

HBL at present state has a long and rich history of deeds and sacrifices. All
this has been possible on the account of sustained efforts.
Perhaps the HABIB BANK LIMITED establish in 1941 at Bombay. But its
history starts in 1841 when a young boy name Ismail Habib reach Bombay for job.
After some time he got the job with a dealer in utensils and non ferrous metals. Ismail
Habib was very keen and intelligent and became partner of his boss. Later on he was
elected as a president of the market. Many years later he expended his business. He
engaged in private banking. So HBL has come a long way from its modest
beginnings in Bombay in 25 august, 1941 when it commenced business with a fixed
capital of 25000 rupees.
The first branch of HBL started functioning on 30
August, 1941 at Muhammad
Ali Road Bombay, where Quaid-e-Azam Muhammad Ali Jinnah first of all opened
his personal account.
In 1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and
later on shifted the Banks Head Office from Bombay to Karachi on 7
August, 1947
just one week prior to independence, to play its pivotal role in the development of this
newly born country. At the time of independence, the areas which now constitute
Pakistan were producing only agricultural products raw material for indo Pak
subcontinent. Partially no industries were there to process the raw material; therefore
the raw material was exported from Pakistan. There were 19 non-Indian foreign
Banks which were engaged in the exports of crops from Pakistan with only two
Pakistani Banks i.e. HBL and Australia bank. The confidence of the people had been
shaken by the un-friendly environment and till the time peace had not been restored,
people would naturally have been interested in other things. The nation was quite
young with extreme scarcity of resources and definitely added to the difficulties of the
government to run its own banking system immediately.
Following the announcement of the independence plan in June 1947 , the Hindus
residing in the territories now comprising Pakistan started transferring their assets to
India and vice versa. The Banks included those having their registered offices in
Pakistan, transferred them to India in order to bring a total collapse of the new state. It
had been decided that the Reserve Bank of India would continue to function in
Pakistan so that the problem of demand and time liabilities, coinage, currencies,
exchange rate etc be settled between India and Pakistan and the Indian Notes would
continue to be legal tender in Pakistan till 30
September ,1948. Again due to certain
differences between India Pakistan, the Indian Government withheld Pakistans share
of Rs 75 core in forward and subscribed heavily to the Government of Pakistan to the
tide over the crises, payment was made to the Government by the Bank at a very
nominal rate of interest, even before the actual issue of securities.
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At a time when this newly born country was at whirlwind of crises, it was HBL
which fulfilled generously the financial needs of all its sectors, paid salaries to the
employees of Government departments, helped in the establishment of state Bank of
Pakistan which the Quaid-e-Azam inaugurated on July 1
, 1948. HBL after partition
opened its branches throughout Pakistan to provide finance and other facilities to the
business community. In association with HBL, the Government sponsored Pakistan
Finance Corporation Limited for financing of cotton. The Bank helped handsomely in
the construction of WARSAK DAM PROJECT, WAPDA and provided
finance and other facilities. It was also the first in making available such new facilities
as Gift Cheque, Rupee Travelers Cheques, Credit Card System, short term and long
term schemes for small businessmen.
Besides this, HABIB BANK has been a pioneer in providing innovative banking
services such as first installation of mainframe computer in Pakistan followed by
ATM and more Internet banking facilities in all branches. The main strength of HBL
brand is its great services to all customers especially to the corporate customers and
its prominent head office building that has dominated Karachi's skyline for 35 years.


Enabling people to advance with confidence and success


To be recognized as the leading financial institution of Pakistan and a
dynamic international bank in the emerging markets, providing our customers with a
premium set of innovative products and services, and granting superior value to our
stakeholder s shareholders, customers and employees.

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Following are some of the main objectives of HBL.
To earn profit for the Bank itself and for its shareholders.
To promote and boost up business sector inside the country.
To provide employment opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment schemes.



House Finance:
HBL provides the facility of house finance:
Financing available for:
Purchase of house
Home improvement and renovation
Self Construction

Some characteristics of House Finance of HBL Are;
Lowest mark-Ups leading to affordable monthly installments
5 years fixed Rate/ one year Floating Rate available.
Lowest processing charges
Financing limits of up to Rs: 7.5 million (Rs: 3.0 million for Home
Quick Processing

Auto Finance:
Habib Bank Auto Finance, a lease product, designed to offer you an economical
Way for owing the car of your choice.
Some characteristics are:
Lowest Down Payment
Lowest monthly rentals
Fixed repayment tenures of 36, 48 and 60 months.
Lowest Processing Charges
Insurance premium rates as low as 3%
Worldwide personal accidental insurance coverage of up to Rs: 200,000.
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All locally assembled new cars can be financed through this scheme.

HBL Flexi Loan:
HBL had introduced a unique loan system for the middle income serving people
in various HBL sectors. It is basically meant for those in service people who earn
more than Rs 5000 per month. This loan meets the petty requirements of the
salaried calls. Since the introduction of this scheme Rs 6 billion is advanced
throughout the county. The maximum limit of this loan is Rs: 3000000.

Life Style:
Habib Bank Lifestyle is an economical financing scheme for Household
Appliances and consumer Electronics.
Salient features of HBL LIFESTYLES:
Loans for salaried/self Employed individuals or business persons
Low Mark-ups leading to affordable monthly installments.
Financing from Rs: 10000 to Rs: 500000
Fixed tenures of 6, 12, 18, 24 and 36 months
Low Processing charges
Full credit life insurance
Free Doorstep Delivery of items
Available throughout Pakistan from over 330 designated Habib Bank

Personal Loans:
Maximum loan up to Rs: 1000000
Choice of 12, 24, 36, 48 and 60 months for payback
Lowest Mark-up
Quick processing
Full Credit Life insurance
Available from over 400 designated branches throughout Pakistan

Agricultural Loans:
It entails all kind of agricultural finance facility for the rural market such as.
Kissan Dost Agricultural Finance Scheme
Kissan Dost Tractor Finance Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost Farm Transport Scheme
Kissan Dost Live Stock Scheme etc.


Retail Banking
The Retail Banking network, with 1450 branches, is the core strength of Habib
Bank. The network provides HBL with the largest diversified low cost deposit base of
any bank in Pakistan, and forms the basis for many of our other business lines:
corporate and investment banking and treasury activities. The network provides HBL
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with the largest diversified low cost deposit base of any bank in Pakistan, and forms
the basis for many of our other business lines: corporate and investment banking and
treasury activities.

Commercial Banking:
Enterprises operating in the middle market contribute significantly to the
economy of a country. During FY-2000 HBLs management decided to address this
issue. On November 1, 2000 Commercial Banking came into being.
The objective of settling-up Commercial Banking was twofold:
First to stop the erosion of market share in the middle market;
Second, to regain the lost market share
Commercial Banking is making headway with improvement not only in terms of
the business figures but also in its ambiance. Renovation of is being carried out in
order to give a professional look to all the Commercial Banking Centers.

Corporate Banking:
The Corporate Banking Group serves large institutional customers who
require sophisticated products in an environment of intense competition. HBL
Corporate & Investment Banking Group is now recognized as a market leader and
regularly arranges and participates in most large structured finance deals.

International Operations:
HBLs ability to operate successfully in diversified markets and cultures is a
function of a long history in international banking when first international branch
was opened in 1951. The Bank's branches in financial centers continue to provide
efficient trade settlement and reimbursement services to the entire network and
business with other banks.

HBL also provides agency services to its customers. Some of which are as follow:

Collection of Cheques
HBL pays and collects cheques on behalf of their customers, and for this it
receives commission form their account holders.

Collection of dividends
The Bank provides a very useful service by acting as an agent for its
customers. It arranges the collection of dividends on shares and securities held by its
customers. The customer is simply to inform the issuer of the securities that the
interest on the securities is to be credited to his account in the Bank. Bank charges
commission for the collection of the dividends on behalf of account holders.

Purchase and sale of securities
HBL if authorized by the customers also makes purchase and sale of securities
on the behalf of its customers. Bank charges commission for the purchase or sale
made by its on behalf of the customers.

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Execution of standing instruction
HBL also executes the standing in case if it is ordered by the customers of the
Bank to do so. These instructions are usually given in writing to Bank. The Bank
debits and credits the accounts of its customer for the transactions carried out by the
individual or firm.

Transfer of Funds
HBL also transfers funds of the customers from one Bank to another Bank. If
the transfer is within one station, they dont charge any commission and even if they
charge, they charge on reduced rates.

Acts as an agent
HBL also acts as an agent, correspondent or representative of its customers at
home and abroad.

General utility services
HBL transacts foreign exchange business by discounting foreign bills of
exchange and thus provides facilities for financing in foreign trade.

Issuance of travelers cheques
HBL also issues travelers cheques. These cheques can be issued to anyone
whether an account holder or not and charges no commission on issuance of such
cheques. HBL has recently introduced Muhafiz rupee traveler cheques with enhanced

Collection of Utility Bill
Electricity, telephone and other such bills can be deposited with HBL.

Locker Facility
HBL also provides locker facility to its customers where valuables of
customers can be kept.

Other Services

Auto Cash (Debit/ATM Card)
Habib Bank provides cards for dual purposes-a debit card and an ATM card
and provides you the direct access to cash in your account.

Amaan-Retirement Plan:
A pension plan that offers attractive investment returns.

Tabeer-Childern Education:
An insurance plan that enables parents to cover education and marriage costs.

HBL iCard as your ATM Card:
Offer a number of facilities such as cash withdrawal, Funds transfer between
accounts, Balance Inquiry, Mini Statement, Pin Change etc.
Accepted at all 1 LINK and MNET ATMs across the Country.

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HBL Easy Access:
Online access to banking services at over two hundred branches in Pakistan

HBL Fast Transfer
A unique solution for overseas Pakistanis to send money back home in a swift
and convenient manner.

HBL E-Bank
It provides services via a dedicated communication link on the internet. The E-
Banking services provide anytime, anywhere banking to all 5 million customers. This
service, designed to be user friendly, assures secured access and confidentiality.

The bank is a major SWIFT user in 70 domestic branches & 21 overseas
countries/ locations in the network. SWIFT services are being used for funds transfer,
remittances and trade related transactions, resulting in major improvement in payment
processing capability for enhanced customer services.

Business Volume

Business volume of HBL in last five years is a follows:
Description 2007 2008 2009 2010 2011
Equity &
63237429 66308587 84369798 96250771 109586988
2 Total Assets 691991521 749806715 863778621 924699403 1139554205
531298127 597090545 682750079 747374799 933631525
(net of
382172734 456355507 454662499 459750012 457367656
(Net of
177942251 129833446 216467532 254909116 418604147

Customer Satisfaction

With a customer base of 5 million and a network of 1494 branches in Pakistan,
HBL is the largest Private Bank in the country. Its network means that it is
geographically closer to our customer than any other bank. This gives us the insight
needed to provide a variety of Products that directly reflects the customers needs.

HBL provides that following products and services to meet its individual
customer requirements: -
Debit Card
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Deposit Account
Phone Banking
Bank Assurance
Mutual Funds

Moral Values of Employees

HBL focuses on the moral values of employees.
1. Integrity: -
For HBL, integrity means a synergic approach toward abiding there moral
values. United with the force of shared values and integrity, they form a network
of a well integrated team.

2. Excellence: -
This is at the core of everything they do. The markets in which they operate
are becoming increasingly completive, giving their customers are abundance of
choice. Only through being the very best in term of service they offices, their
products and premises are widely acceptable.

3. Respect: -
HBL provides great respect of their employees. They motivate the employees
by providing friendly environment, better pay packages and awards etc.

4. Humility: -
HBL encourages a culture of mutual respect and treats both their team
members and customers with humility and care.

5. Team Work: -
Their team strives to become a cohesive and unified force, to offer the
customers a service beyond his expectations. The customer a service participative
and collective endeavors, a common set of goals and a spirit to share the glory and
the strength to face failures together.
6. Innovation
HBL focuses on the innovation of new products. It was the first in making
available such new facilities as Gift Cheques, Rupee Travelers Cheques, Credit
Card System, Short Term and Long Term Schemes for small businessmen, PC
based banking for corporate customers etc.


1. United Bank Limited (UBL)
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2. National Bank of Pakistan (NBP)
3. Bank of Punjab (BOP)
4. Bank Alfalah
5. Meezan Bank
6. MCB
7. Allied Bank Limited (ABL)


A well-developed and properly coordinate structure is an important
requirement for the success of any organization. It provides the basic framework
within which functions and procedures are performed. Any organization needs a
structure, which provides a framework for successful operations. The operation of an
organization involves a number of activities, which are related to decision making,
and communication of these decisions. These activities must be well coordinated so
that the goals of the organization are achieved successfully.


At present the Bank operates through one central and many branches, all over
Pakistan. The president and Executives Committee look after the affairs of the Bank.
Each Regional Head Quarter is headed by a Chief Executive and assisted by General
Manager Operations and General Manager Support Services. The Regional Head
Quarter controls the branches in their area.
Overseas operations consist of 65 main branches, two affiliates, two representative
offices and two subsidiaries.
President, from Head Office at Karachi controls the officers of the Bank with the
help of the senior management. Functional responsibilities of the Banks are broken
into seven groups known as

1) International Operations Group
2) Corporate Banking and Treasury Investment Group
3) Retail Banking and Operation Group
4) Finance, Audit and Administration Group
5) Assets Remedial Management Group
6) Credit Policy Group
7) Corporate Bank, Financial Institutions and Project Finance Group

In addition to the overall controlling authority, president also manages the
International Operations Group individually. While the Senior Execute Vice
Presidents supervise rest of the functional group. Each Senior Executive Vice
President is individually responsible for the group which is assigned to him.
At the level of provinces there are Regional head Quarters headed by Regional
Chief Executives (RCE). Each RCE is assisted by GM operations and GM Support
Service. Branches are also controlled by the RCEs. Circle Offices of the past times
have been removed to reduce Managerial Layers, which were working under the
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control of Zonal Offices. This Happened as a result of policy of beginning new
changes in the organizational structure.

Organizational Chart of HBL

A chart defines the line of authority in an organization and its departmentation. It is a
sort of visual presentation of the organizational structure. It specifies the duties and
responsibilities of the personnel of the organization. The Organizational chart of HBL
is given below.



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According to Designation/Grade

According to Designation/Grade:








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G.E Group Executive
IOBG International and Overseas Banking Group
CPOD Corporate Planning and Organizational Development
CPCS Credit Policy and Company Secretary
RBG Retail Banking Group
CIBG Corporate and Institutional Banking Group
ARM Assets Remedial Management
AGA Audit and General Information

Hierarchy of Jalalpur Bhattian Branch

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Number of Employees

HBL Jalalpur Bhattian branch has 7 employees the contact numbers of some
employees is as follows,

Main Offices of HBL

HBL has its network in 25 countries of the world. It has 1494 branches out of
which 1425 are domestic branches and 69 are international.
The location, addresses and contract of some of them is as follows.

M. Shaqat Mehmood Branch Manager 0300-4350421
Irfan Naseer Operational Manager 0301-4719073
Iqbal Hussain Shah CD Incharge 0307-6747342
Ghullam Hussain AFO 0345-6650575
M. Arshad Assitant Manager 0321-7461400
M. Naeem Cash Officer 0336-6544635
M. Farrukh Assitant 0314-7882664
Shoaib Shahzad Assitant 0345-6982360
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Head Office
Habib Bank Plaza
I.I.Chundrigar Road
Karachi-75650, Pakistan.
Phone: 021-32418000 (50 lines)
Fax: 021-39217511

Registered Office
Floor, Habib Bank Tower
Jinnah Avenue
Islamabad, Pakistan.
Phone: 051-2872203 & 051-2821183
Fax: 051-2872205
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Branch Offices in Different Cities of Pakistan: -

1) Address: Al-Azam Square C-3
Al-Badar Square, Hadi Market,
Liaquatabad Town Karachi
Phone: +92-21-36688232
2) Address: Barkat-E-Hyderi SE-6, Block 6,
North Nazimabad Karachi
Phone: +92-21-36629335
3) Address: Union Council, Town & Tehsit,
Ali Pur, District Muzzafar Garh Multan
Phone: +92-61-2755090
4) Address: Aziz Bhatti Town, Union Counicl,
Lahore Cant, Board, Tehsil CANT, Lahore.
Phone: 042-36611667
5) Address: Ravi Town, Union Council 27,
Tehsil City Lahore, District Lahore, Lahore
Phone: 042-37652273
6) Address: Aabpara Market Islamabad,
Tehsil & District Islamabad
Phone: 051-2829110
7) Address: Khushab Union Council Khushab.
Tehsil & District Khushab
Phone: 0454-712216
8) Address: Main Bazar Jauharabad
District Khushab
Phone: 0454-720109
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Comments on the Organizational Structure

(i) Centralized Decision Making
By looking at the organizational structure of HBL would be found that the
structure at HBL is a critical one. All the decisions are made at the top management
level and the subordinates have to obey this decision. This trend in decision making
shows a pattern of rigidity in structure of HBL.

(ii) Downward Communication
Communication is the process by which information is exchanged &
understood, by two or more people, usually with the interest to motivate or influence
the behavior of these in the organization Downward communication is the message
and information sent from top management to subordinates in a down word direction
Manages can communicate downward to the employees through speeches, messages
in a company publications, information leaflets, tucked into pay envelops materials
one bulletin boards, policy and procedure mandates.
The same pattern is followed at HBL no doubt its very traditional approach but can
create problems it ignores the receives of the communication became the issues of the
policies and procedures does not ensure communication. In reality message
communicated download may not understood perfectly.

(iii) Chain of Command
The chain of command is an unbroken line of authority that links all persons in
an organization and shows who reports to whom. By analyzing the organizational
structure it can be found that there is a scalar principle followed with in the bank
because each and every person knows to whom can one report. The authority of
responsibility for different tasks and duties are different, as well as everyone knows
the successive levels of management all the way to the top.
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I spend my first week in account opening department because it is the main
department of the bank.
The detail of this department is as under:


Basically this department is the pillar of the whole banking system because
this is the department which initiates the relationship between the customer and the
bank. Here it is the responsibility of the officer that there is no element of fraud in
customer. Borrowing funds from different sources has become an essential feature of
todays business enterprises. But in the case of a bank borrowing funds from outside
parties is all more vital because the entire banking system is based on it. The
borrowed capital of a bank is much greater there own capital. Banks borrowing is
mostly in the form of deposits. These deposits are lent out to different parties. Such
deposits creation is done through opening of account in the bank.

Type of Account
The primary operation of bank is opening of account. Three types of account
normally used at Khushab branch:

At the time of opening an account the customer must have following
1. Must be an adult/Guardian in case of minor.
2. Must not be insolvent & bankrupt.
3. Must not be bewared under any law from entering into any contract.

Documents required for Opening an Account
1. Photocopy of CNIC with original.
2. In case of a salaried person, attested copy of his service card, or any other
acceptable evidence of service.
3. In case the CNIC does not contain a photograph, the bank obtains the
photograph in addition to CNIC.
4. In case of illiterate person, a passport size photograph of the new account
holder besides taking his right and left thumb impression on the specimen
signature card.
5. Proof of age in case of minor
6. Copy of CNIC of next to kin
7. Submission of proper legal documents. (if any depend on nature of account)

Account Opening Procedure
Followings are the main steps for new account opening:
1. Filling of the application form.
Form contains the following documents which is filled by the customer
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a. Account opening form.
b. Signing the specimen card.
c. Cheque book requisition form.
d. Acknowledge (if necessary).
e. Declaration form (if signature differ from NIC)
f. Vernacular form.
2. After filling the form account opening officer attached the following
documents which are necessary for the judgment of Fraud.
a. Print of Verisys (Document of verification from NADRA)
b. Filling of KYC form electronically
3. The account officer feed the data into the system of bank.
4. Allotment of account number.
5. Initial deposit is taken from customer (Which is applicable for new account)
6. After the account is opened a letter of thanks is issued to the customer. If the
customer had given the wrong address the letter will come back and the
account is marked as doubtful.
7. Also the letter of thanks is issued to the introducer, which verifies the client.

Method of Judging the Fraud
1. The original CNIC card is checked.
2. Check the name of new customer from the list of NAB which is given by the
Head office tot eh branch.
3. The signature of the customer is checked. In case if customer is illiterate then
his photo account is opened.

Nature of Accounts:
The current and saving accounts can be opened under the following
nominations. The documents required of opening a new account is also depend on the
nature of account which is given below.

a) Individual Account
One person can open it. He has to fulfill all the requirements of the bank. It is also
called the personal account. Following are requirement for individual account.
Photocopy of NIC individual.
In case the CNIC does not contain a photograph, the bank obtains the
Photograph in addition to CNIC.
In case of a salaried person, attested copy of his service card, or any other
acceptable v\evidence of service.
In case of illiterate person, a passport size photograph of the new account
holder besides taking his right and left thumb impression on the specimen
signature card.

b) Joint Account
When two or more persons open an account in their names it is called joint
account in case of joint account it is mentioned that how many will operate this
Attested photocopies of identity cards of all persons.
Authority letter for supervision of account one or all.

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c) Partnership Account
For partnership account along with the application from and signature card other
documents are also required including the following.
For partnership account along with the application from and signature card other
documents are also required including the following.
Attested photocopies of identity cards of all partners.
Attested copy of Partnership Deed duly signed by all partners of the firm.
Attested copy of Registration with Registrar of Firms. In case the partnership
is unregistered, this fact should be clearly mentioned on the Account Opening

Authority letter, in original, in favor of the person authorized to operate on the
account of the firm.

d) Societies, Clubs and Associations
Along with the application form and signatures following are the documents
which are required:
Certified Copies of:
Certificate of Registration.
By-laws/Rules & regulations.
Resolution of the Governing Body/Executive Committee for opening of
account authorizing the persons to operate the account and attested copy of the
identity card of the authorized persons.
An undertaking signed by all the authorized persons on behalf of the
institution mentioning that which any change takes place in the persons
authorized to operate on the account, the banker will be informed

e) Company Account
For company account following documents is required:
Certified copies of:
Resolution of Board of Directors for opening of account specifying gate
person(s) authorized to operate the company account.
Memorandum and Article of Association
Certificate of Incorporations.
Certificate of Commencement of Business.
Attested photocopies of identity cards of all the directors.

f) Govt. Account:
For the Govt. account the following documents required for opening an account.
Attested photocopy of identity cards (CNIC) of the authorized persons.
Authority Letter to open & operate the A/C from concerned Govt. department.

g) Dormant/Inoperative Accounts
All depository accounts like Current/Saving/BBA etc., which are not operated
upon by the account holders for a period of one year, will be classified as dormant.
After passing one year in the dormant status, that is, no operation in the account for a
continuous period of two years, the account shall be classified as inoperative. This
entails certain restrictions on the operation of such accounts, for reactivations, the
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account holder must in person request for a change of status and will produce original
CNIC or passport of Pakistan Origin Card or National Identity Card for Overseas
Pakistani with photo copy of Branch /Bank attestation. All accounts which are
inoperative and have nil balances shall be closed by the bank.

HBL ATM / Debit Card
Firstly an application form is filled by the person who is interested in ATM
card and then submitted to specific personnel with the all the documents required for
the ATM cards. Then all these information are passed over to regional office by
passing the entry into the system of bank. Than head office issues the ATM card &
pin code. ATM card is sent to related branch and pin code is sent to particular
The customer after receiving pin code approaches bank and puts his signature
on ATM issue book and then ATM facility is activated by calling to head office. The
client not issue through the ATM card above the daily limit of card.

First of all customer demand the Cheque book and we issue cheque form to him
containing information name, account no. address etc. he fills and returns that form to
us. Second step was that particular personnel fills a form known as Cheque book
requisition slip and send to regional office through NIFT. Regional office receives
that slip and issue Cheque book with particular title of different size 25 leafs, 50 leafs,
100 leafs) to the branch.
After receive Cheque books from regional office we issue Cheque book to customer
by getting his signature on a register known as Cheque book issuing register. Last
activity in this regard is activation of Cheque book. The Cheque book is activated in
the particular account with the system and the charges of the Cheque book is
deducted from the account of customer who gets Cheque book. After the 60 days the
check book is destroyed by the officer.

Bank also provides statement of customers account on his request. The person who
wants to get his bank account statement should come himself and ask the bank officer
to issue him a bank statement maximum of one year period. The officer will verify
that the account is on his personal name and after verification bank statement is issued
to the customer. According to the bank rules the bank statement should be charged at
Rs: 50 per page but usually it is not charged for maintaining good relationship worth

Online inter branch funds transfer is a facility given to the customer through which
customer can transfer funds in the shape of cash or Cheque to any account of any
branch from any online branch of Habib Bank Ltd. For this purpose there is a form
used in the bank which is duly filled by the bank and signed be the customer. One
CNIC copy of the sender is also attached with the slip. The slip contains the following
a) Applicants name.
b) Applicants address.
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c) Applicants CNIC number,.
d) Remote branch.
e) Remote account number.
f) Remote account title.
g) Cheque number. (If funds are transferred through cheque).
h) Amount in figure.
i) Amount in words.
j) Commission

Second week of internship

My second week of internship was in clearing and collection department.

What is Clearing

The process of getting payment of Cheque, demand draft, payment order,
telegraphic transfer, mail transfer or dividends warrants deposited by the customer of
the branch and other branch of the same bank.

Clearing House

NIFT (National Institute of Facility Technologic) is the institute which works
under the supervision of SBP for the clearance of the cheque. NIFT branch works
under the specific area which assigned to it. So I was familiarized about the different
types of stamps used for clearing the cheque I had practically done that work at that
day. The stamp which are used are as under: -
On Front:
For the Cheque of National bank and Cheque of other banks
1. Clearing stamp of the next date on which the Cheque is going to present.
2. Special crossing stamp with the name of Habib bank Ltd.
On Back:
1. Credit guarantee of Disbursement stamp. For the Cheque of NBP and Khazana
2. Discharge stamp with the sign of two authorize persons.
I have personally done all the work.
There are two types of clearance
1. Outward clearance
2. Inward clearance

Outward Cleaerence
When the clients of the bank receives the cheque from other parties, which
are drawn on any other bank, the bank take these cheques and mark it for clearing,
this type of clearance is called outward clearance.
When bank received such types of cheques first of all officer crossed these cheques
and make them the property of the bank and issues acknowledgement of pay in slip to
the client by only single signature and enter in clearing and transfer delivery register.
After this all the cheques are sent to the main office and the party account is credited
with the head of clearing. Branch sent there check to NIFT for clearing and transfer
delivery cheques to their branches for transfer delivery.
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Second day if the cheques will honor then main office will send the advice of these
cheques. If any cheque dishonor then the cheque is returned with the slip.

Inward Clearance
When the clients of HBL endorse the cheques of HBL to a person who is not
the client of HBL then the person will submit these cheques in the bank where he has
the account and then that bank will send the cheques to the State Bank of Pakistan for
clearing where cheques are delivered to the representative of HBL. The representative
then sends these cheques to the branch on which cheques are drawn. If there is
sufficient balance in the account of a person who has issued these cheques then:

There are two types of bills:
Outward bills for collection
Local bill for collection

Outward Bills for Collection (OBC)

What is OBC?
When an instrument is drawn on bank, which is located outside the city, its proceeds
can be collected through a mechanism called Outward Bills for Collection (OBC).

Banks receive different cheques for collection some of them pertain to
different branches of the bank but some of them pertain to the other branches in other
cities. In these cases the cheques are sent to the relevant branches for collection and
the procedure adopted is called outward bill for collection.

Procedure for OBC
First of all we sort the cheques city wise and bank wise and then they are
Following stamps are required for OBC lodgment:
Crossing stamp
Bank endorsement stamp
OBC lodgment stamp

Local bill for collection (LBC)
The cheques received from other branches of HBL drawn at our branch or
different banks/branches in Khushab city or from any bank directly drawn at our
branch is called local bill for collection.
OBC of other branch of HBL or bank not having branch in Khushab will be our LBC.
When branch receive any cheque in LBC the same is entered in LBC register with
running sequence number.

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Third week of internship
My third week of internship was in Remittance Department.

What is Remittance?

Remittance is transfer of funds from one place to another or from one person to
A Remittance is an important service provided by banks to customers as well
as non-customers. Since it is not a free service it is a source of income for the bank.

Parties involve in remittances:
Four parties involved in remittance: -
1. Remitter
2. Remittee
3. Issuing Bank
4. Paying Bank

One who initiates, or requests for a remittance. The remitter comes to the
issuing or originating branch, asks for a remittance to be made, and deposits the
money to be remitted. The bank charges him a commission for this service. He may or
may not be the branchs customer.

A Remitter is also called the beneficiary, or the payee. The person in whose
name the remittance is also the one who receive the payment.

Issuing Bank
The bank that sends or affects the remittance, through demand drafts,
telegraphic transfers, or Mail Transfers.

Paying Bank
Paying Bank also knows as the drawee branch. The branch on which the
instrument is drawn. It has to make the payment (usually located in a different city

Modes of Remittance:
Habib Bank Ltd, like other commercial Banks undertakes to remit or transfer
money from one place to any part of the country and outside the country. The money
is remitted by means of:
1. Demand Draft (DD)
2. Mail Transfers (MT)
3. Telegraphic Transfers (TT)
4. Pay Order
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1. Demand Draft (DD):
Demand Draft is a negotiable instrument, which is drawn by one branch to another
branch of the same bank. In case of agency arrangement Demand Draft can also be
issued by one branch of the bank payable to other branch of the other bank e.g. DD
issued by the HBL payable by HBL.

If any person wants to make payment from one city to another city then he can
make payment through demand draft. Bank charges a commission for performing this
kind of service according to bank rate schedule, which is revised after 6 months.
Demand draft may be issued or paid. There are two ways to issue.
Demand Draft: -
1. Issue of DD against cash payment
2. Issue of DD against Debit of the account.

Process of the Issuance of DD: -
When a customer requests HBL Khushab to provide him a DD made on his
account or against cash payment for a particular city like Islamabad. Then, after
having the total amount including commission demand draft is issued in favor of the
specified person in that city and is drawn on HBL, Islamabad Branch. So, when payee
in any bank presents this demand draft, it constitutes the inward clearing of HBL,
Islamabad Branch.

2. Mail Transfer:
In mail transfer money is transferred through mail. One branch of the bank sends
advice to the branch of the same bank to credit the amount of payee. In this type the
payee must have the bank account.

Precaution for Payment: -
It is drawn on the same bank.
Payee has signed the revenue stamps of adequate amount.
Payee is properly identified.

3. Telegraphic Transfer: -
Generally a mail transfer advice reaches the Drawee branch the next day, when
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 though the quickest means. In such cases, transfer of funds message is passed
on through a telegram, ordinary or express, to the Drawee branch of the bank. A
tested message is sent to the Drawee branch followed by the confirmation copy. In
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 one additional expense i.e. Telephone Charges of amount Rs. 100 from the

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TT is not negotiable
The funds are not remitted through the branch situated within city.
TT instruction regarding payment is sent through codes called test code.

4. Pay Order:
Pay order is a negotiable instrument made by the bank, on account of a customer,
to pay on order the specified amount to the directed person (payee).

Use of Pay Order: -
Pay orders are used to make payment or to transfer money, with in the same
city. Pay order is always drawn on the bank that has issued it. The main advantage of
pay order is that it cannot be dishonored by the bank. Pay order can be endorsed if it
is not crossed. The payee may present pay Order for payment either over the counter
for cash payment or the payee may transfer credit to his account.

Process of Issuance of Pay Order
Cash Deposited or gives Cheque in favor of HBL
Fill Application Form for Pay Order and signed by Applicant
Entry in Bank Smart
Bank Issue a Pay Order after recovering Charges (2 Copies) which is signed
by two officers
Do necessary Vouchering and Take Signature of Applicant at the Place of
received Instrument
Copy of Pay Order is given to customer
Copy is for Filing Purpose

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Forth week of internship

My fourth week of internship was in INSURANCE department.
HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce
Amaan (Retirement plan) and Tabeer (Child education & marriage). These products
have been designed keeping HBLs customers base as the focus and will provide life
insurance along with an investment option.

Amaan: (Retirement Plan)

Amaan is a pension plan that provides an opportunity for growth through
investment in a balanced portfolio with post-retirement income benefit. The plan
covers life insurance and gives attractive return on investment to its customers.
Eligible Age 18-60 years
Minimum Payment RS 2000 per month
Minimum Age to exercise pension option 55 Years
Benefits on accidental death
RS 800,000 will be paid along with other
Benefits on death
RS 200,000 will be paid along with other
Partial Withdrawals Allowed
Maturity Benefits
Two Options available
1. Policy can be cashed in total
2. Pension can be received for life

Tabeer: (Child Education & marriage Plan)

Tabeer is a plan that provides parents with means to accumulate a fund over a
period of time which can be used to pay for a childs education or marriage. Plans are
available for both under & over 45 years of age.

Eligible age 18-60 years
Minimum payments RS 3000 per month
Benefit of accidental death In addition to other benefit, RS 500,000
will be paid for the marriage of the
nominated female child, given that
female child is at least 18 years of age.
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Partial withdrawals Allowed
Maturity benefits Two options available:
1. Policy can be cashed in total
2. Funds are paid back as per policy
holders designated time period.

Fifth week of internship

My fifth week of internship was in Cash department.

Cash department:

The cash department is the most important department of the bank. It receives
cash from customers and then deposits it into the accounts of the customers and
maintained their balances.
The officers in this department are called casher and there were three chasher at the
counter. This department involves in two activates: -

1. Deposit cash in customers account (Collection of deposits, Utility bills and
collection of other funds)
2. Make payments from customers account (Payment of Cheques, Remittances

Cash Payment Procedure:

Following steps are involved in paying the cheques to customers:
First of all they check the balance of the account that weather there is credit
balance in the account available or not?
Then they verify the signatures from the specimen card, which had been given
by the account-opening department at the time of account opening.
Then cheque series is checked on the computer.
Finally they pay the check to the customer.

When cheque is received for payment special care is taken about the following
Amount in figure and words is same
Signature at the back of the cheque
Signature of the account holder
No cross or cutting in figures
Date of presented cheque

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If anything wrong then cheque is dishonored and a lip would be attached with the
cheque named as Reason for Dishonor.

Procedure of Receiving Cash:
For depositing the cash into customers account there is need to fill the pay in
slip. The pay is lip contains the related details of the transaction. This pay is slip
contains the date: account No A/C title, particulars, amount being deposited and
details of cash. There are two portions in the pay in slip. The depositor signs the part
of the slip that is retained by the bank to show the acceptance of the entries made in
the slip. The cashier is responsible to receive both pay in slip and cash from the
depositor. After matching the amount with figures the cashier fills the cash voucher
received record sheet and assigns a voucher no. and post his signatures on both part of
the voucher and post stamps on the slip. One part of the slip is then returned to the
customer and other to the computer operator.

Posting In Computer:
Then the officer posts the transaction entries in computerized ledger. After posting
these entries computer displays balance before and after posting. Computer operator
assigns the stamp POSTED on the voucher. He manually inspects the entries of
ledger and voucher. If both tallied he signs the ledger and put a mark of cancellation
on the voucher.
At the end of the day cashier is responsible to maintain the cash balance book. The
cashbook contains the date, opening balance, detail of cash payment and received in
figures Rs. And closing balance. The figures of receipt and payment cash are entered
into the cashbook and the closing balance of cash is drawn.

The following books are maintained din the Cash Department:
1. Receiving Cash Book
2. Paying Cash Book
3. Token Book
4. Scroll Book
5. Cash Balance Book

When cash is received in counter, it is entered in the Scroll Book and Receiving
Cashier Book. At the close of the day, there are balanced with each other.
When the cheque or any negotiable instrument is presented at counter for
payment, it is entered in the token book and token is issued to the customer. The token
clerk and the Cashier make entries in the paying book and payment is made to payee.
At the close of day, the Token Book and Paying Cashier Book are balanced.
The consolidated figure of receipt and payment of cash is entered into eh cash
balance book and drawn closing balance of cash.
Opening Balance + Receipts Payments = closing Balance.

This is very important department because cash is the most liquid asset and
mostly frauds are made in this department, therefore, extra care is taken in this
department and nobody is allowed to enter or leave the area freely. Mostly, cash area
is grilled and its door is under supervision of the head of that department. All the
books maintained in this department are checked by an officer.
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Sixth week of internship

In spend three days in Credit department and remaining two days in Marketing

Advances are the most important source of earning for the banks. HBL is also
giving full attention towards this aspect and it is also obvious from the growing
portfolio of advances and from very low delinquency rate. The receipt portfolio of this
institution is in a very much better shape than other financial institutions of Pakistan
and the redit goes to the management and the staff who are related to this department.

Types of Commercial Credit
There are two type of finance according to this branch.
a. Running finance
b. Demand finance

a) Running Finance:
Running finance is most popular sort of credit facility given to clients. This is
mostly obtained for the purpose of working capital requirements. Client can draw
money even daily from the account but not more than the limit. In running finance, it
is not necessary that security would be in the procession of bank, but all important
documents of stocks, property etc, are in its possession.

Procedure of Issuing Running Finance
Whenever the client request the bank for the approval of running finance the
document are collected. After the collection of related document and verification from
the RCAD (regional credit administration department) issue the approval of finance
and after that amount transfer the loan account. There are many documents which are
necessary for the loan which are followings:
Application for loan facility
Under taking for appropriate utilization of facility
Standing instruction
Letter of arrangement
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Letter of hypothecation of stock
Stock report monthly
Letter of continuity with promissory note
Agreement of finance
CIB statement
Personal Guarantee
Approval letter from HBL
Mortgage of building etc
Running Finance mostly given against the security of Hypothecation of stock or
mortgage of building.

b) Demand Finance/Advance Salary
This type of advance given to government employee after the approval from the
government body. The installment of loan is deducted from the salary of person every
date of month. There are following document which are required for the granting
the case of advance salary.
Application for demand finance
Proposal for advance salary
Disbursement authorization certificate
CIB statement
Confidential statement
Letter of arrangement
Letter of authority
Personal Guarantee
Approval letter from RCAD etc..
Only two type of advance is granted in the branch of Khushab.


Purpose of finance:
Four renowned companies of the country such as Noon Group, Pak Kuwait,
PSO and Angro Service have established a joint venture company in the name of the
Agrimall (Pvt) Lted to provide agro services under one roof through its Franchisees.
The Agrimall (Pvt) Ltd has approached our Bank to provide financial help to their
franchisees to establish and run these Agrimalls under their specialized management
throughout the country. HBL has launched a kissan Dost Agrimall Finance Scheme.
All facilities required by the Franchisees of the Agrimall (Pvt) Ltd will be provided
through this scheme. The farmers, who will be the clients of Franchisees, will also be
provided production loans through Banks Kissan Dost Agriculture Finance Scheme
(For purchase of inputs).

The Schemes are:
Kissan Dost Agricultural Finance Scheme
Kissan Dost Tractor Finance Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost Farm Transport Scheme
Kissan Dost Live Stock Scheme etc

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Procedure for issuance of agriculture loan
Kissan apply for loan facility the branch officer after the collection of related
document and verification from the RCAD (Regional Credit Administration
Department) issue the approval of finance and after that amount transfer to the loan
There are many documents which are necessary for the Agriculture Credit which
are followings:
Application for Agriculture credit facility
Charge on agriculture land through Agri. Pass Book
Liquid Security in the shape of Bank Fixed Deposited
One personal guarantee of reputable person
Two written satisfactory market checking reports.
Insurance documents
Agreement of Finance
CIB statement
Approval letter from HBL etc

The documents for kissan dost agriculture schemes are differ from scheme to scheme.
Such types of schemes are providing farmers a real plate form to accelerate. Some
provisions related kissan Dost Agricultural Finance Scheme are:

Provision of financial facility to farmers for purchase of inputs i.e seed, fertilizer,
pesticides, fungicides etc.
Facility Amount
Maximum of Rs: 500000 according to per acre limit of the crop. (different case to
Charge on Agriculture Land through Agriculture Pass Book.
One personal guarantee of reputable person.
Lease tractor (to be registered in the name of bank)
Tow written satisfactory market checking reports
The borrower will have to arrange life assurance inder the Banks charge. Assets
insurance (i.e. tractor)
Average six months KIBOR +4.0% with floor of 16% per annum.
10 qual half yearly installments (differ case to case)

The marketing department of the Habib Bank Ltd, Jalalpur Bhattian branch is
doing wonderful job. Because of competition in market there are many other Banks
existing in the market. So at that time Habib Bank Ltd. Also run a marketing
campaign especially in business filed and salary persons. Habib Bank Ltd. Uses a
marketing strategy with different way and different scheme.

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and 8
Week Of Internship:

In 7
and 8
week of I worked almost on all seats randomly. I also collect
necessary data which can help me in preparation of this report.

Duties as an internee:-

I started my internship at HBL Jalalpur Bhattian branch here I performed different
duties as on follows: -

Issuance of cheque book
Posted cheque book in the register
Sorting out the vouchers
Fill the slips
Fill of account opening form
Filling of ATM card form
Debit voucher
Credit voucher
Filling of online form
Filling of cheque book
Issue cards
Form for demand draft
Letter of thanks
Unclaimed letter
Stock report
List of new accounts
Verification of NIC

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Financial Analysis:

Financial Statements:

Habib Bank Limited
Profit & Loss Account

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Habib Bank Limited
Balance Sheet

2007 2008 2009 2010 2011
Mark up/Return/Interest earned 50481021 63376047 76076347 81325028 98580423
Mark up/Return/Interest expensed -19153957 -26525556 -33405813 -34330255 -42182220
Net mark-up/Interest income 31327064 36850491 42670534 46994773 56398203
Provision against non-performing loans and advances net 8238227 6904919 8794560 7602440 6687555
Provision against off balance sheet obligations -54626 372598 -513961 30895 -9141
Provision against diminution in the value of investments -84310 1909887 346495 -47671 237083
Bad debts written off directly - - - - -
8099291 9187404 9089659 7585664 6925497
Net mark up/interest income after provisions 23227773 27663087 33580875 39409109 49472706
Non Mark-up/Interest Income:
Fee, commission and brokerage income 3420051 4518408 5316479 5432706 6085970
Income/Gain on investments 2472663 1300975 597018 343252 434606
Share of profit of associates and joint venture - - - 713678 1081358
Gain on sale of securities - - - 316823 542118
Unrealised (loss) / gain on held for sale securities - - - 6409 -36820
Income from dealing in foreign currencies 1487374 2374318 1913115 3189333 3756094
Other income 2643076 3088994 3333000 2760230 2919535
Total non mark-up/interest income 10023164 11282659 11159612 12762431 14782861
33250937 38945782 44740487 52171540 64255567
Non Mark-up/Interest expenses:
Administrative expense 1829279 21425361 22745955 24252960 29433961
Other provisions/write offs net -276111 200163 210190 178148 -242427
Other Charges 85152 64751 3540 178700 77588
Worker welfare fund 323575 399166 521702 665047
Total non mark-up/interest expenses 18106320 22013850 23,358,851 25131510 29934169
Profit Before Taxation 15144617 16931932 21381636 27040030 34321398
Current 7220717 8308611 8095642 9698783 10459376
Prior Year 1668562 233100 -1095355 696908 28264
Deferred -3828699 -2473891 980600 -390041 1500736
5060580 6067820 7980887 10005650 11988376
Profit After Taxation 10084037 10864112 13400749 17034380 22333022
Profit After Taxation Attributable to:
Equity holder of the bank 10000231 10774584 13389452 16816179 22189763
Minority interest 83806 79009 90230 116475 57063
Minority investor of HBL Funds 10519 -78933 101726 86196
10084037 10864112 13400749 17034380 22333022
Basic and diluted earnings per share 13.18 11.83 14.7 15.26 20.13
Rupees (000)
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Horizontal Analysis: -
Comparison of two or more years financial data is known as horizontal analysis or
trend analysis.
The goal of horizontal analysis is to compare the figures of the current period with
that of the past period. It helps the company and its share holders to analyze their
performance and final out areas of improvement.

Habib Bank Limited
2007 2008 2009 2010 2011
Cash and balances with treasury banks 55487664 56533134 79839836 81640246 103399623
Balances with other banks 27020704 39364297 40366687 37413185 47349505
Lendings to financial institutions 1628130 6193787 5352873 30339344 41581029
Investments 177942251 129833446 216467532 254909116 418604147
Advances 382172734 456355507 454662499 459750012 457367656
Other assets 27346111 34588444 41116582 34920007 44808703
Operating fixed assets 13780555 14751252 16766668 16155290 19167654
Deferred tax assets 6613372 12186848 9205944 9,572,203 7275888
691991521 749806715 863778621 924699403 1139554205
Bills payable 15418230 9828082 10041542 9775093 13894502
Borrowing from financial institutions 58994609 46961165 52542978 40459860 39473670
Deposits and other accounts 531298127 597090545 682750079 747374799 933631525
Sub-ordinated loans 3100000 3954925 4212080 4281835 5036100
Liabilities against assets subject to finance lease
Other liabilities 19943126 25663411 29862144 26557045 37931420
Deferred tax liability
628754092 683498128 779408823 828448632 1029967217
NET ASSETS 63237429 66308587 84369798 96250771 109586988
Shareholders Equity
Share Capital 6900000 7590000 9108000 10018800 11020680
Reserve 19821455 23658044 27527380 29355555 32145755
Unappropriated Profit 28341670 31933178 38498335 47467704 56980697
Total equity attributable to the equity holders of the bank 55063125 63179222 75133715 86842059 100,147,132
Minority interest 965642 890099 1143241 1212656 1236290
Surplus or revaluation of assets-net of deferred tax 7208662 2239266 8092842 8196056 8203566
63237429 66308587 84369798 96250771 109586988
691991521 749806715 863778621 924699403 1139554205
Rupees (000)
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Balance Sheet
Horizontal Analysis/Trend Analysis

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Analysis: -
There is a rapid increase in the cash and balances with treasury banks.
There is a decrease in the balances with other banks in the year of 2010. But
after and before it shows increasing trend.
On the other hand, lending to financial institutions is weaving every year upto
2008 and after it shows increasing trend.
Other assets have also increased as compared to base year.
There is an overall increase in assets.
The Bank has paid all the tax liabilities. Now there is no outstanding tax of the
Though the assets have increased but the decrease in liabilities is more then
increase in assets after 2008.
The main reason of decrease in liabilities is deposit and other accounts.
There is a prominent increase in net assets.

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Habib Bank Limited
Horizontal /Trend Analysis
Profit & Loss Account

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Analysis: -
There is a positive increase in net markup income.
Total non mark-up income & total no mark-up expenses, both have increasing
In fee, commission and brokerage income, there is increasing trend.
There is also an increasing trend in administrative expenses.

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Vertical Analysis: -
Technique for indentifying relationship between items in the same financial statement
by expressing all amounts as a percentage of the total amount taken as look is known
as vertical or common size analysis.
In a balance sheet, for example, cash and other assets are shown as a percentage of the
total assets and in the income statement cash expense is shown as a percentage of
sales revenue.

Habib Bank Limited
Vertical/Common Size Analysis
Profit & Loss Account

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Analysis: -
Mark up income is taken as a base for the vertical analysis of profit and loss
In 2011,mark up income is higher as compared to previous years.
As compared to non-markup income, non mark up expenses are high in the
year 2011.
Fee, commission & brokerage remained very low/nominal throughout the
Profit after taxation is 20% in 2007, but it is 23% in 2011 which shows an
increasing trend in profit.

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Habib Bank Limited
Vertical/Common Size Analysis
Balance Sheet

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Analysis: -
In the year 2007, out of total assets of 100%, liabilities and equity are 91% and
9% respectively as detailed below:

Assets = Liabilities + Equity
100 = 91 + 9
In assets, the largest part is from advances that is 40% out of 100%.
The second largest portion is investment.
Lending to financial institution is very minor / meager as compare to
Liabilities of the bank are more than its equity.

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Ratio Analysis
Meaning and Definition of Ratio Analysis: -
Ratio analysis is a widely used tool of financial analysis. It is defined as The
systematic use of ratio to interpret the financial statements so that he strength and
weaknesses of a firm as well as its historical performance and current financial
condition can be determined. The term ratio refers to the numerical or
quantitative relationship between two variables.

Significance or Importance of Ratio Analysis: -
1. It Helps in Evaluating the Firms Performance: -
With the help of ratio analysis conclusion can be drawn regarding several aspects
such as financial health, profitability ratio points out the operating efficiency has utilized
the firms assets correctly, to increase the investors wealth. It ensure a fair return to its
owners and secures optimum utilization of firms assets.
2. It Helps in Inter-Firm comparison: -
Ratio analysis helps in inter-firm comparison by providing necessary data. An inter-
firm comparison indicates relative position. It provides the relevant data different
departments. It comparison shows a variance, may be identified and if results are
negative, the action may be initiated immediately to bring them in line.
3) It simplifies Financial Statement: -
The information given in the basic financial statements servers no useful purpose
unless it is interrupted and analyzed in some comparable terms the ration analysis is one
of the tools in the hands of those who want to know something from the financial
statements in the simplified manners.
4) It Help in Determining the Financial Position of the Concern: -
Ratio analysis facilitates the management to know whether the firms financial
position is improving the years by setting a trend with the help of ratios. The analysis
with the help of ratio analysis can know the direction of the trend of strategic task of
planning, forecasting and controlling.
5) It Helps in budgeting and Forecasting: -
Accounting ratios provide a reliable data, which can be compared, studiedly and
analyzed these ration provide, sound footing for future prospective. The ratios can also
serve as a basis for preparing budgeting future line of action.
6) Liquidity Position;-
With the help of ratio analysis conclusions can be drawn regarding the liquidity
position of the firm. The liquidity position of a firm would be satisfactory if it is able to
meet its current obligation when they become due. The ability to meet short term
liabilities is reflection in the liquidity ratio of firm.
7) Long Term Solvency: -
Ration analysis is important for assessing the long term financial ability of the firm.
The long term solvency is measured by the leverage or capital structure and profitability
ratio which show the earning power and operating efficiency. Solvency ratio shows
relationship between total liability and total assets.
8) Operating efficiency: -
Yet another dimension of usefulness of ration analysis, relevant from the view point
of management is that it throws light on the degree efficiency in the various activity ratios
measures this kind of operational efficiency.

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Current Ratio: -
This ratio is the rough indication of a firms ability to serve its current ability
to serve its current obligations generally, the higher the current ratio the greater
the cushion between current obligations and a firms ability to pay them.
bilities CurrentLia
ets CurrentAss
io CurrentRat

For the year 2007:
1 : 069 . 1

For the year 2008:
1 : 064 . 1

For the year 2009:
1 : 075 . 1

For the year 2010:
1 : 089 . 1

For the year 2011: 1 : 084 . 1


2011 2010 2009 2008 2007 Year
1.084 1.089 1.075 1.064 1.069 Current Ratio

The current ratio is highest in 2010 however it shows increasing trend from
2007 to 2011. It decreases in again in 2011 because the Advances and Deferred
tax asset are low comparatively to 2010 and the current ratio is low in 2011
because of the total current liability is high in 2011 as compare to 2010.

Working Capital: -
Working capital measures how many liquid assets a company have available
to build its business. It is a measure of both a companys efficiency and its short-
term financial health. Positive working capital means that the company is able to
pay off its short term liabilities. Negative working capital means that currently,
company is unable to meet its short term liabilities with its current assets.

Working Capital = Current Assets Current Liabilities
For the year 2007: 650864855-608810966=42053889 Rs
For the year 2008: 700467019-657834717=42632302 Rs
For the year 2009: 805895371-749546679=56348692 Rs
For the year 2010: 873624106-801891587=71732519 Rs
For the year 2011: 1075577848-9917655797=83812051 Rs

Average=59315891 Rs

2011 2010 2009 2008 2007 Year
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83812051 71732519 56348692 42632302 42053889 Working
Capital (Rs.)

There is continuous increase in the working capital that bank is moving towards
sound position because the current assets are increasing in 2011 as compare to
2010 except Advances. So the company is able to pay off its short term liabilities.

Cash Ratio:
It indicates the extent to which the readily available funds can pay off the
current liabilities. Potential creditors use this ratio in determining whether or not
to make short-term loans.

Cash Ratio =
bilities CurrentLia
Securities Marketable Cash

For the year 2007:
1 : 0911 . 0

For the year 2008:
1 : 0859 . 0

For the year 2009: 1 : 1065 . 0

For the year 2010: 1 : 1018 . 0

For the year 2011: 1 : 1042 . 0


2011 2010 2009 2008 2007 Year
.1042 .1018 .1065 .0859 .0911 Cash Ratio

There are variations in cash ratio of the bank. In 2007 it is 0.0911 while in
2011 it is 0.1042 which shows bank is in a good position. It is highest in 2011
because the cash is more than that of 2010.

Time Interest Earned Ratio:
It reflects the capability of the borrower to meet financing obligations. It is
used to determine how easily a company can pay interest expense on outstanding
debt. The lower the ratio, the more the company is burdened by debt expense.

Time Interest Earned Ratio =
pense InterestEx
Tax Interest NetIncome

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For the year 2007:
5060580 19153957 10084037

Times 79 . 1

For the year 2008:
6067820 26525556 10864112

Times 63 . 1

For the year 2009:
7980887 33405813 13400749

Times 64 . 1

For the year 2010:
10005650 34330255 17034380

Times 78 . 1

For the year 2011:
11988376 42182220 22333022

Times 81 . 1

Average=2.072 Times

2011 2010 2009 2008 2007 Year
1.81 1.78 1.64 1.63 1.79 TIER (Times)

There is increase in the time interest earned ratio of the bank every year because
the interest income is increasing rapidly as compared to its expenses, which shows
a good position.

Debt Ratio: -
The debt ratio shows the proportion of a banks assets which are financed
through debt. If the ratio is less than one most of the banks assets are financed
through equity. If the ratio is greater than one, most of the banks assets are
financed through debt. Companies with high debt ratios are said to be highly
leveraged and could be in danger if creditors start to demand repayment of debt.

Debt Ratio =
s TotalAsset
lities TotalLiabi

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For the year 2007: 1 : 90 . 0

For the year 2008: 1 : 91 . 0

For the year 2009: 1 : 90 . 0

For the year 2010: 1 : 89 . 0

For the year 2011: 1 : 90 . 0


2011 2010 2009 2008 2007 Year
.90 .89 .90 .91 .90 Debt Ratio

Debt ratio for all five years is less than one. It shows that the HBLs
assets are financed through equity not debt. The bank decreasing its reliance on

Return on Assets: -
This is a measure of banks profitability. Its percentage shows how profitable
a companys assets are used in generating revenue.
Return on Assets:
s Totalasset Avg

For the year 2007:
% 56 . 1 100

For the year 2008:
% 65 . 2 100

For the year 2009:
% 66 . 1 100

For the year 2010:
% 90 . 1 100

For the year 2011:
% 16 . 2 100

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2011 2010 2009 2008 2007 Year
2.16 1.90 1.66 2.65 1.56 ROA (%)

The return on assets increase year to year which show a good position of bank.
The net income and assets both increased but increase in income is more than
increase in assets. Also the companys assets are more utilized in generating
revenue in 2011 as compare to 2010.

Return on equity: -
Return on equity measures the rate of return on the ownership interest (Share
holders equity) of the common stock owners. In short, this ratio tells the owner
whether or not all the effort put into the business has been worthwhile.
Return on equity:

sequity r Stockholde

For the year 2007:
% 73 . 16 100

For the year 2008:
% 16 100

For the year 2009:
% 8 . 15 100

For the year 2010:
% 96 . 17 100

For the year 2011:
% 37 . 20 100


2011 2010 2009 2008 2007 Year
20.37 17.96 15.8 16 16.73 ROE (%)

ROE go down only in 2009, however it increase in all other years,
which shows a good position of bank. In 2011 it reach 20% from 18% because net
income and stock holder equity both are increased in 2011 as compare to 2010,
but increase in net income is more than increase in equity.

Earnings per Share: -
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EPS are the earnings returned on the initial investment amount. The EPS
formula does not include preferred dividends for categories outside of continuous
operations and net income.
s adingShare TotalOutst
kHolders ommonsStoc ilableforC EarningAva

For the year 2007: Rs 49 . 14

For the year 2008: Rs 83 . 11

For the year 2009: 70 . 14

For the year 2010: Rs 26 . 15

For the year 2011: Rs 70 . 14

Average=14.19 Rs

2011 2010 2009 2008 2007 Year
14.70 15.26 14.70 11.83 14.49 EPS (Rs)

HBL shows a good position in all years; however in 2009 and 2011 it
is same. However the return on initial investment in 2011 is low as compared to
2010. The initial investment return in 2010 is high while again in 2011 it go down
to 14.70.

Debt to Equity Ratio: -
It is the ratio between the funds provided by the lender and the capital invested
by the owner. It is the comparison of how much of the business was financed
through debt and how much was financed through equity. The higher the ratio, the
greater the risk to a present or future creditor.

Debt-Equity Ratio = Total Liabilities .
Stock Holders Equity

For the year 2007: 1 : 43 . 10

For the year 2008: 1 : 30 . 10

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For the year 2009: 1 : 23 . 9

For the year 2010: 1 : 60 . 8

For the year 2011: 1 : 39 . 9


2011 2010 2009 2008 2007 Year
9.39 8.60 9.23 10.30 10.43 DER

The debt to equity ratio is decreased from 2007 to 2010 but it increase
in 2011, because there is little risk as compare to 2010. It shows stable position of

Fixed Assets/Net worth Ratio: -
This ratio measures the extent to which owners equity has been invested in
plant, equipment (fixed assets). A lower ratio indicates a proportionately smaller
investment in fix assets in relation to net worth and a better cushion for creditors
in case of liquidation. Similarly a high ratio would indicate the opposite situation
capital is frozen in the form of machinery and the margin for operating funds
become too narrow for day to day operations.

Fixed Assets/Net worth Ratio = Fixed Assets
Net Worth

For the Year 2007: 1 : 65 . 0

For the Year 2008: 1 : 74 . 0

For the Year 2009: 1 : 68 . 0

For the Year 2010: 1 : 53 . 0

For the Year 2011: 1 : 58 . 0

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2011 2010 2009 2008 2007 Year
.58 .53 .68 .74 .65 Fixed Asset/ Net
Worth Ratio

Fix asset/net worth ratio is increased every year which means that
fixed assets are more financed by equity. The fixed ratio in 2011 is low as
compare to 2007 to 2009 that is a good cushion for creditor in case of liquidity.
High in 2011 and the more good is in 2010. While from 2007 to 2009 indicates
that the capital is frozen in form of machinery, plant and the margin of operating
assets is narrow.

Return on Deposits: -
It measures the rate of return on the deposits of the bank. It shows how much
return, bank is offering on the deposits.

Return on Deposit = Net Income x 100
Total Deposits

For the Year 2007:
% 89 . 1 100

For the Year 2008:
% 81 . 1 100

For the Year 2009:
% 96 . 1 100

For the Year 2010:
% 27 . 2 100

For the Year 2011:
% 39 . 2 100


2011 2010 2009 2008 2007 Year
2.39 2.27 1.96 1.81 1.89 ROD (%)

ROD has increasing trend which shows that return based on deposit is
increased every year. The return is highest in 2011, which shows that bank is
offering more return due to competition.

Interest expenses /Total Expense Ratio: -
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This is a ratio between the interest expense and total expenses of the bank.

Interest Expense /Total Expense Ratio = Interest Expense
Total Expense

For the Year 2007: 1 : 51 . 0

For the Year 2008: 1 : 92 . 0

For the Year 2009: 1 : 58 . 0

For the Year 2010: 1 : 57 . 0

For the Year 2011: 1 : 58 . 0


2011 2010 2009 2008 2007 Year
0.58 0.57 0.58 0.92 0.51 Interest Expense/
Total Expense

This ratio is very less volatile, which shows that expenses are almost in
control. While that are too high in 2008. The total expenses move same with
interest expenses.

Interest Income /Total Income Ratio: -
This is the ratio between the interest earned by the bank and total income of
the bank. Low ratio means bank is earning less interest income.

Interest Income/Total Income Ratio = Interest Income
Total Income

For the Year 2007: 1 : 83 . 0

For the Year 2008: 1 : 84 . 0

For the Year 2009: 1 : 87 . 0

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For the Year 2010: 1 : 86 . 0

For the Year 2011: 1 : 86 . 0


2011 2010 2009 2008 2007 Year
0.86 0.86 0.87 0.84 0.83 Interest Income/
Total Income

It also shows increasing trend which indicate that interest earned
income is increasing every year as compared to previous years.

Earning Spread Ratio: -
A traditional measure of the earnings efficiency with which a back is
managed is called the earning spread or simply the spread. The spread measures
the effectiveness of the banks intermediation functions in borrowing and lending
money and also the intensity of the competition in the banks market area.

Earning spread: Total Interest Income Total Interest Expenses
Total Earning Assets Total Interest Bearing Bank Liabilities

For the year 2007:

= 0.072-0.030 = 0.042 or 4.2%

For the Year 2008:

= 0.084-0.038 = 0.046 or 4.6%

For the Year 2009:

= 0.088-0.042=0.046 or 4.6%

For the Year 2010:

= 0.08-0.04 = 0.04 or 4.0%

For the Year 2011:

= 0.08-0.04 = 0.04 or 4.0%
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Average=0.04 or 4.00%

2011 2010 2009 2008 2007 Year
4.0 4.0 4.6 4.6 4.2 ESR (%)

ESR is increased in 2008, in 2010 and 2011 it is decreased and remains
same, which reflect that it faces severe competition.

Net Profit Margin: -
It is the measure of profitability. It shows how much profit comes from every
dollar of sales or operating revenue. This ratio is compared to other business in the
same industry to see if your business is operating as profitability as it should be.

Net Profit Margin = Net Income x 100
Total Operating Revenue

For the Year 2007:
% 17 100

For the Year 2008:
% 15 100

For the Year 2009:
% 15 100

For the Year 2010:
% 10 . 18 100

For the Year 2011:
% 70 . 19 100


2011 2010 2009 2008 2007 Year
19.70 18.10 15 15 17 NPM (%)

There is increase in ratio of net profit margin from 2009-2011 which
also shows a healthy option for HBL. The bank earns the most profit in 2011 that
is 19.70% it means the bank earn most profit from every dollar of sales and
operating revenue. It is because that total operating revenue is high in 2011.

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HBL is considered to be a very sound bank in the financial circles. The bank where
the customers can safely keep their money as long as they want.
In SWOT analysis the best strategies accomplish in organizations mission by;
Exploiting opportunities and strengths.
Neutralizing its threats and
Avoiding its weaknesses.
Following is a list of SWOT of HBL


A skill or capability that enables HBL to conceive and implement its strategies.
The Officers of HBL are considered as one of the most able professionals in
the banking world.
I observed that HBL employees interact with their clients as if they are their
personal friends and discuss about their problems as their own.
HBL has got a reliable and easy to use internal computer system. Every
information regarding the transactions in customers deposits has been
HBL is the larger commercial bank in Pakistan with the network of over 1490
domestic and international branches.
Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest
in experience.
HBL focuses on consumer banking by lucrative schemes, products and
services suiting best to the wants and demands of the customers.
HBL has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank.
The band is always on the look to improve its service both to the domestic as
well as overseas customers.
Human resources development and introduction of new technology towards
modern banking.
24 hours cash access and safe payment products for high value transaction.
Having potential to encounter the competitive environment in the market.
Customer enjoys the services at the residential localities.

Highest number of branches effecting the proper maintenance and difficulty in
providing same working environment at the each branch.
Poorer system of recovery of the system is a threat to bankruptcy.
Lack of customer feedback.
Low job satisfaction.
Poor ATMs Service
Inconsistency in efficiency and working atmosphere due to the largest network
of branches.
Females feel uneasy in an environment among the male workers.
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Lack of professionalism in the branch employees mostly.


Huge untapped market potential in consumer banking
Opportunity for developing value added services combined with corporate
banking relationships, cash management services to large medium sized
corporate clients.
Govt. is taking very bold stamps to promote IT in Pakistan . HBL has an
opportunity to improve in technology.
Large international network which principally focuses on trade finance with
Pakistan can be utilized to tap trade activities in other markets. In addition,
services such as cross border/offshore financing for corporate customers can
be enhanced.
Customer feedback on different products and accounts has really improved
the bank performance and encourage the atmosphere for other future policies.
Further reduction in intermediation costs possible, with improving
Due to efficient and veteran management group, HBL can also improve Ill
and expand its foreign operation successfully.


An area in the environment that increases the difficulties the organizations
achieving high performance.
Consolidation in the banking sector resulting in increased competition.
Shortage of trained and specialized staff a lower executive and officer levels
The threat of inconsistency and government policy regarding to business and
economics sectors, specially political and regional situation which makes the
environment uncertain.
Growing global technological advancement.
Strict regulation by government over credit facilities to the customers as to
meet the prudential.
Loss of confidence of overseas customers due to freezing of accounts.
Facing more completion by foreign banks in the market.
Foreign banks are flourishing in field or consumer financing.
Highly attractive and advance services by foreign banks to their customers.

HBL is clearly the first choice of everyone who believes in qualitative
approach of banking environment of highly responsible people. Bank is enjoying a
healthy market share and taste of good status in terms of its operative features and
customer support. HBL is clearly the best bank operating in Pakistan.
Personal loan is a distinguished feature of HBL experiences a good reputation and
reasonable mark up with respect to prevailing market mark up with assurance of
satisfaction and support. HBL has more customers as compare to other banks, if they
given proper attention to every customer than in few years it will be the leading bank
in the country.

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Habib Bank Limited is a well known and successful financial institution in the
banking sector, it is said, nothing is perfect in the world, and there is always space for
deficiencies. I would like to suggest some recommendations for the deficiencies
which I have found during my internship.
Because some branches are still batch, it is strongly recommended that HBL
should go for computerization rather than manual work, which is very slow
and time consuming process in those branches. Its all branches should be
Some of the schemes are not profit making where as the bank is an institution
that earns from them, so those unprofitable schemes should be finished.
Door to door marketing in this regard especially media and electronic
marketing should be promoted in order to acquire handsome share of banking
Bank branches must be beautified internally and externally by providing
appropriate interior decoration and there must be proper parking space in main
branches to avoid the parking problems.
In order to market its products, it should emphasis to give advertisements on
both print and electronic media.
There is shortage of staff and there must be some extra staff so that customer
dealing can be increased especially in customer service department.
HBL should attract the customers by giving them certain incentives and
beneficial schemes to the customers as other competitor banks are doing so.
Employees Training programs must be introduced on continuous basis so that
employees have understand with the latest developments especially with the
The bank has been proactive in adopting measures to monitor and control risks
associated with banking industry.
Customer problems should be taken in account quickly as I have seen during
my internship that they are not given proper attention
The entire customer treated equally.
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There are certain difficulties that I had faced in preparing this report.
High Cost
The cost of preparing this report is high. The printing and binding of the report was
very expensive.
It is difficult to get information from different sources e.g from bank staff etc. due to a
lot of work in work, every employee was busy in his work and I had faced difficulty
in obtaining information from them.

Irfan Naseer (Operational & Credit Manager)
M. Farrukh (Assistant) Details regarding services offered by HBL
Shoaib Shahzad (Assistant) Requirements for services offered by HBL

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ATM Automated Teller Machine
HBL Drive Automobile Financing
HBL Wallet Debit Card
Current Asset Which Converted into cash
Bank Draft Bank Account
HBL on line Internet Banking
HBL Visa Credit Card
Hamrah Safety way of carrying cash
Fixed Assets Which have physical cuistence
Earnings Per Share Earning divided by total outstanding shares
FCA Foreign Currency Account
Interest Rate Annual cost of debit or credit capital computed as the ratio of
interest to principles.
BIP Bank Interest Ratio
Prime Interest Rate Rate of interest at which bank rent to favored customer
DC Debit Card
Debit Card Allow the customer to access their funds electronically
Credit Card Allow the customer to purchase product with cash and pay
GAAP Generally accepted accounting principle
Cheque Instrument for cash withdrawal.
Financial Statement Both income statement and balance sheet.

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