1

An Internship Report on

HABIB BANK LIMITED
BANK SQUARE BRANCH,MINGORA, SWAT

Submitted By
IRFAN ULLAH

Institute of Management Studies
University of Peshawar
Session 2004-05

Internship Report on Habib Bank Ltd.(Bank Square
Branch, Mingora)

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HABIB BANK LIMITED
BANK SQUARE BRANCH,MINGORA

Internship report submitted to the Institute of
Management Studies, University of Peshawar, in
partial fulfillment of the requirements for the degree of

“ Master Of Business Administration.”
Session 2004-2005
INSTITUTE OF MANAGEMENT STUDIES
Internship Report on Habib Bank Ltd.(Bank Square
Branch, Mingora)

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UNIVERSITY OF PESHAWAR
RESEARCH AND DEVELOPMENT DIVISION
INSTITUTE OF MANAGEMENT STUDIES
UNIVERSITY OF PESHAWAR

HABIB BANK LIMITED
BANK SQUARE BRANCH, MINGORA

Supervisor:
Signature :

___________________

Name:

MR.Mehboob-ur- Rashid

Designation:

Lecturer

Coordinator Research & Development Division:
Signature:

______________________

Name:

Mr. ZIAUDDIN

Internship Report on Habib Bank Ltd.(Bank Square
Branch, Mingora)

(Bank Square Branch. Mingora) .4 Designation: Lecturer Internship Report on Habib Bank Ltd.

Mingora) .5 Internship Report on Habib Bank Ltd.(Bank Square Branch.

but somehow it had the initial touch of being in a practical world. IRFAN ULLAH (JAN-2006) Internship Report on Habib Bank Ltd.(Bank Square Branch.First of all I would like to thank Mr.Mingora. During my stay at Habib Bank I tried my best to acquaint myself with the operations of the bank and as a result learned a lot. I feel proud also to mention my father. In Pakistan Habib Bank has always been in the forefront of this profession. The practice is carried out since primitive ages. Bank Square branch. What I have learned during my stay at the bank is being presented here for the reader. Multinational banks are now dealing in money and are laying the foundations for countries to stand on their own feet. Although and eight weeks internship is not enough time to know delicately about every aspect. I would also express my gratitude to my uncle. management and banking theoretically. Mingora Swat. Mingora) . Nadir Khan who is accountant in HBL & his endless support and encouragement was a major reason that enabled me to do my internship. The internship proved to be extremely helpful in learning about the functions and operations of a bank and how different kind of procedures at bank are carried out. Banking industry has always played a vital role in the success of economies. I owe very much to so many people whose help and support at different stages of my work enabled me to write this report. Latif who’s help made it possible for me to have an internship in HBL Bank Square Branch. After completion of my coursework at the Institute of Management Studies I had a chance to work as an internee at Habib Bank. Banking is both a sacred and sophisticated profession. I would also like to mention my younger uncle Nasir. one always develops a desire to work in a bank. Aman Ullah who’s kind words are always guidelines for me. Mr. support in this report.6 PREFACE After studying so much about accounting.

3 Scope of work 1.2 Banking in Pakistan 2.4 Methodology of the report 1.3 History of HBL 2.7 TABLE OF CONTENTS Preface i List of Tables v List of Graphs vi List of Charts vii List of Acronyms viii Executive Summary ix SECTION I Chapter 1: INTRODUCTION OF REPORT Introduction of the Study 1.6 Merits of the study SECTION II Chapter 2: Chapter 3: REVIEW Introduction of HABIB BANK LIMITED (HBL) 2.2 Marketing policies Internship Report on Habib Bank Ltd.(Bank Square Branch.5 Scheme of the report 1 . Mingora) .1 Organizational Structure 3.1 Background of the study 1.4 Mission statement of HBL Overview of HABIB BANK LIMITED 3.1 History of banking 2.2 Purpose of study 1.

6 Technological Framework & equipments used in HBL Chapter 4: Different Departments of HBL 4. SECTION III Chapter 5: ANALYSIS Critical Analysis 5.3 Management policies 3.5 Clearing department 4.2 SWOT Analysis SECTION IV Chapter 6: RECOMMENDATIONS Recommendations SECTION V Chapter 7: IMPLEMENTATION PLAN Implementation Plan Persons Interviewed Bibliography Internship Report on Habib Bank Ltd. 4. Mingora) .3 Remittance department 4.5 Organizational Units of HBL & their products 3.1 Deposits department 4.1 Financial Analysis 5.8 3.(Bank Square Branch.7 Sales Department.8 Cash Department.6 Safe deposit-lockers department 4.4 Bills department 4. 4.2 Advances department 4.9 Data Centers.4 HR Techniques used in HBL 3.

Fixed Assets Turnover 7. Total Expenditures to Deposits LIST OF CHARTS 1. Financial Ratios LIST OF GRAPHS Title Page No 1. Return on Assets (After Assets) 4. Mingora) . Return on Assets (Before Taxes) 3. Assets turnover Ratio 6. Net Interest Income to Assets 5. Balance Requirements for different accounts 2.(Bank Square Branch. Gross profit margin 2.9 LIST OF TABLES Title Page No. Operation Cost to Assets 8. Organization Structure of HABIB BANK LIMITED. Internship Report on Habib Bank Ltd. 1. Debt to Equity Ratio 9. Operation Cost to Deposits 10.

Mingora) .(Bank Square Branch.10 LIST OF ACRONYMS A/C Account ATM Automated Teller Machine DD Demand Draft DFIs Developmental Financial Institutes DSC Defense Saving Certificate FCY Foreign Currency FTS Funds Transfer System HBL Habib Bank Limited HMT Home Mail Transfer IBTS Inter Branch Transaction services LCY Local Currency L/C Letter of Credit MDI Management Development Institutes MT Mail Transfer OBC Outward Bills for Collection ODBC Outward documentary Bills for Collection RF Running Finance SSC Special Savings Certificate SBP State Bank of Pakistan SVP Senior Vice President SME Small & Medium Enterprise TC Travelers Cheque Internship Report on Habib Bank Ltd.

11 TT Telephonic Transfer US $ United States Dollar WAPDA Water & Power Development Authority Internship Report on Habib Bank Ltd.(Bank Square Branch. Mingora) .

its functions and operation and also attempts to asses its performance. Mingora) . The internship experience in the form of an internship report also carries an attempt to explain domestic as well as international banking operations of Habib Bank. Bank Square Branch. 1. when Pakistan came into being Habib Bank shifted its operations from India to Pakistan.Mingora. Since then it is carrying on its operations with more than 1424 local and 52 foreign branches.(Bank Square Branch. The internship experience of the students of Institute of Management Studies is a partial requirement for the fulfillment of their MBA Program. 2. 3 HABIB BANK LIMITED is the oldest & the first bank in Pakistan.12 EXECUTIVE SUMMARY Habib Bank is the largest and oldest bank among Pakistani Banks. An implementation plan of the recommended steps is given at the end of the report. Internship Report on Habib Bank Ltd. It offers a broad range of products to target different market segments. The purpose of this report is to evaluate the performance of HABIB BANK LIMITED (HBL). Founded in 1941 it emerged as a Muslim Bank in undivided India. Certain recommendations are presented for the potential areas of improvement. Its name is generally considered for quality and reputation. The report aims at appraising the working of HABIB BANK LIMITED. In 1947.

d) Decentralization of authority at different level to fasten the decision making process. c) Presentation styles of bank specially at retail level is not good. Mingora) . cleanliness and office furnitures. so that information can be obtained in time. d) Management style is centralized. b) Proper designing of the jobs should be performed similarly clearcut division of work to increase efficiency.13 Main problems indentified during the course of internship are as following a) b) Absence of proper information technology tools Lack of efficiency of employees.(Bank Square Branch. The recommendations are as follow: a) Establishment of Data bank at Zonal office. c) Special attention should be given to exterior/interior layouts. Internship Report on Habib Bank Ltd.

1 BACKGROUND OF THE STUDY It is a common practice at universities during the completion of the masters and bachelors program to attain practical experience in different fields.2 PURPOSE OF STUDY The purpose of the report is to review and analyze the functions performed by HBL in Pakistan. The concern of this report is to study and analyze the performance of HABIB BANK LIMITED (HBL) in the banking industry of Pakistan.14 CHAPTER 1 INTRODUCTION OF STUDY 1. It offers different products of services to its customers. University of Peshawar requires students to undergo a eight weeks internship program. The institute requires an internship report based on the theoretical and practical learning of the student. 1. The report also explores the strengths and weaknesses of the HBL and also gives recommendation where any improvement can be possible. Mingora) . The selection of the firm is based on the choice of the student. becoming the largest commercial Bank of the country.(Bank Square Branch. HABIB BANK LIMITED is considered to be one of the most prominent and outstanding bank as far its reputation and progress is been concerned. It was established in 1941 and since then.3 SCOPE OF WORK Internship Report on Habib Bank Ltd. 1. it has expended its network. Institute of Management Studies.

Another methodology used for the collection of information and data was based on the two primary modes of data. 1. It enlightens the consumer banking functions at the Bank Square Branch. Web sites.Mingora however the financial analysis is based on the national operations of the bank. Chapter 1: Internship Report on Habib Bank Ltd.5 SCHEME OF THE REPORT The report is arranged in the following sequence. Mingora) . Interviews of Personnel. 1.Mingora. Brochures.4 METHODOLOGY OF THE REPORT The biggest source of information is my personal observation while working with staff and having discussion with them. Books & Magazines.(Bank Square Branch. Sources of Primary data: Personal Observation. Sources of Secondary data: Previous internship Reports & HBL Annual Reports.15 This report is concerned with the performance of the HBL Bank Square Branch. SECTION I This section has one chapter. Formally arranged interviews and discussions also helped me in this regards.

Cash Department and Data Centers. The departments discussed are Deposits Department. SECTION II This section includes the review of HABIB BANK LIMITED. Sales Department. Advances Department. additionally it Technological Framework i. and over all banking sector in Pakistan. This section is comprised of three chapters. its mission statement and its role in the economy of Pakistan.e the equipments used and services offered at HBL Bank Square Branch. purpose. It also tells about the history of HBL. scheme of the report & merits of the study. Clearing Department. an overview of Management policies.(Bank Square Branch. SECTION III Internship Report on Habib Bank Ltd. Chapter 2: These chapters encompasses a brief history of banking. Mingora) . methodology. Remittance Department. scope.16 This is an introductory chapter which describes the background. Chapter 3: This chapter goes in detail study about the organizational structure.Mingora. It precisely tells about the several departments working at HBL Bank Square Branch. Chapter 4: This chapter is the lengthiest chapter of the report. HR techniques applied and the different banking groups of tells about the HBL and the products it offers. Marketing policies. Safe Deposit-lockers Department. Bills Department.Mingora and their functions.

1. Chapter 5: This chapter makes the critical analysis of HBL.(Bank Square Branch.17 This section also have one chapter and it is about the analysis of HBL. Mingora) . SECTION V This section contains the conclusive chapter of the report.Mingora.6 MERITS OF THE STUDY The study done will benefit the finance students in particular and all type of Management students in general.Mingora on the basis of the room of improvements. followed by a SWOT analysis of the HBL Bank Square Branch. Internship Report on Habib Bank Ltd. Financial analysis is made on the National performance of the bank. SECTION IV This section also contains one chapter. Chapter 7: This chapter is about the implementation plan that has been devised for HBL Bank Square Branch. because the financial analysis section of this report comprehensively encompasses all respects of financial analysis. Chapter 6: This chapter gives the recommendations based on the critical analysis of the organization.

Internship Report on Habib Bank Ltd. Mingora) . HBL Bank Square Mingora.(Bank Square Branch.18 Furthermore. may also benefit from the recommendations made at the end of the report.

C. He wrote them on an eight feet stone in the center of the city. The first domestic banking institutions emerged in the 1940s. branches of British banks dominated banking in Pakistan. made all the rules and regulations of lending and borrowing and interest etc. immediately after Pakistan's independence. 2. The greatest invention of all times is considered to be the invention of wheel which made transportation easy and transportation opened a gateway to business and exchange of goods flourished. Mingora) . One was the temple of Ephesus and the second was known as the temple of Delphi. Another statement states that the king of Babylonian empire named as King Hummorabi in 1700 B. The first public bank that was formed was in Germany in later part of the time. which tells that king Midas of Libya invented money in 800 B.(Bank Square Branch.C.1 HISTORY OF BANKING Banking in primitive societies also existed in some form. It is said that the first bank was established in Barcelona in Spain.2 BANKING IN PAKISTAN Before the partition of India and Pakistan in 1947. Another statement tells that “Venice” and “Genoa” were the hub of financial transactions and the first bank was founded there in 14th century. The initial business was done on “barter” which meant an exchange of “commodity for commodity”.19 CHAPTER 2 INTRODUCTION OF HABIB BANK LIMITED 2.These institutions include Internship Report on Habib Bank Ltd. There is a myth also about the invention of money. Two famous temples are also remembered for the lending and borrowing in different transactions.

The banking sector. and the National Bank of Pakistan (NBP). Allied Bank Limited) . sixteen Investment Banks. Mingora) . However. Pakistan is in the process of adopting an Islamic (Shariah) financial system. including the development finance institutions (DFIs). Banking and Financial services sector in Pakistan comprises the commercial banks and the non-banking financial institutions. The NBP was wholly government owned but prominent merchant families established the other three. Muslim Commercial Bank. Habib Bank Limited. Since 1990 the Government of Pakistan has introduced various reforms in the financial services sector enhancing the level of autonomy enjoyed by the SBP. Additionally. It assumed the supervisory and monetary policy powers of the State Bank of India. During previous five years. while combined deposits have recorded an increase of 27 percent per annum. including twenty-one foreign banks. leasing and housing finance sectors. and most banks provide an anticipated profit rate in advance. modarabas (Islamic Mutual Funds) and investment banks. and were intended to concentrate on lending to long-term projects in specific priority sectors. and exists only on paper. These are controlled and regulated by the State Bank of Pakistan (SBP).(Bank Square Branch. leasing companies. has shown good progress during the last few years. Some Internship Report on Habib Bank Ltd. in general. A total of forty-six commercial banks. a number of specialized development finance institutions (DFIs) such as Industrial Development Bank of Pakistan and the Agricultural Bank emerged. From 1960 to 1970. The number of banks operating in Pakistan has increased. Good reputation enjoyed by the existing foreign banks will be helpful for new entrants. twenty-nine Leasing Companies and fifty-three Modarabas Companies provide a mix of financial services. showed an average annual increase of 22 percent. In 1948.20 the Australasia Bank (today. corporate bonds. the SBP was formed. investment banking. Opportunities for new foreign banks exist in consumer banking. under which interest-based banking is not allowed. this has not been made into a law as yet. These DFIs were either controlled directly by the state or through the SBP. are operating in Pakistan. which in turn has resulted in increased competition. the combined total assets of domestic banks.

after having educated and grown up. in itself. All this has been possible on account of sustained efforts. His four children namely Ahmed Habib. Muhammad Ali Habib was younger and ranked third in age but was the most intelligent among his brothers and a successful businessman. Daud Habib. however. The Muslims were a poverty-stricken and weaker nation. As a result of the desire of Quaid-e-Azam. he not only became share-holder of the company but President of the Steel Market. 1940. do exist in the form of weak economic conditions in Pakistan and the turnaround possibilities in shape of privatization. at the age of just 18. a very great achievement having far-reaching consequences. At that time there was no Muslim Bank in the Sub-continent.(Bank Square Branch. Habib Family established the first Financial Institution of the Muslims with the name of "Habib Bank Limited" on 25th August. a family business company was established in the name of Khoja Mithabhai Nathoo in Bombay which was dealing in steel within and outside the Indian Sub-Continent. Internship Report on Habib Bank Ltd. the Quaid seriously felt the need of a Muslim bank. Mingora) . Muhammad Ali Habib and Ghulam Ali Habib. 1941. Habib Ismail died in 1928 at the age of 53. In 1891. on 23rd March. Under his able guidance. By dint of his ability and sincerity to duty. After the death of their father. When Pakistan Resolution was passed at Lahore. were inducted in the business of the company and there-after the name of the company was changed as "Habib & Sons". in this company.3 HISTORY OF HABIB BANK LIMITED Habib Bank has a long and very rich history of deeds and sacrifices. In 1841.21 challenges. a young Muslim lad Habib Ismail got employment. the business made progress and expanded in size. 2. The establishment of a financial institution by a weak and subjugated Muslim nation in the un-divided Hindu-dominated Sub-Continent was. the business was run by all the four brothers.

Since Habib Bank Ltd was founded at the advice of Muhammad Ali Jinnah. But due to the unfortunate incidents during the course of migration in which hundreds of thousands of Muslims were killed. In 1947 on the desire of Quaide-Azam. And they tried their utmost to make it a failed project. 1941 at Muhammad Ali Road Bombay.(Bank Square Branch. Mingora) .22 The first branch of Habib Bank started functioning on 30 th August. And even now so many accounts and other valuables in the from of gold. It was the first Internship Report on Habib Bank Ltd. and silver etc are lying at the bank's head office Karachi awaiting for claims to be lodged. Habib family migrated to Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7th August 1947. It has helped in the rebuilding of our country since its inception. During the migration process in 1947 many of its Muslim account holders put all their monetary assets into it to be remitted to them in Pakistan. so like other sub-continental banks Habib Bank also has to carryout unit banking i. 1941. Habib Bank is the pioneer of Banking Industry in Pakistan. In those times in India.e. a week prior to independence to play its role in the development of this newly born country. branch banking was non existent. many of the remitter and account holders could not claim back their amounts. Habib Bank has played a memorable role in the commercial and industrial life of Muslims of the Sub-Continent. The first account holder of Habib Bank was no less than Quaid-e-Azam Muhammad Ali Jinnah. After a few years of unit banking operations it was Habib Bank which started branch banking with 34 branches at Bombay and outside it. Since its inception in August. For that purpose they conjoined various stories about Habib Bank but the owners of Habib Bank handled all the adverse situations professionally and proved their business acumen. in which a bank has only one location (branch) to carry out its operations. so it was seen as a Muslim Bank by all other banks and financial institutions in undivided India.

Mingora) . be it the deposits side. At present Habib Bank has a very large domestic branch net work. internet banking facilities in all the domestic branches. On January 1. The rest of banks were either Hindu or foreign banks. Habib Bank is the bank of many firsts in all the areas of banking. A few years later when a need was felt to have a Muslim bank to help assist in international trade. Since State Bank of Pakistan was not founded so for the first few months after the birth of Pakistan Habib Bank had to work as the banker to the government and paid for its debts and liabilities. the advances side. Habib Bank has been a pioneer in providing innovative banking services.23 Muslim financial institution that made its entry in the field of banking thereby breaking the Hindu-British monopoly in this crucial sector. 48 zones. with 65 branches in all the continents of the world making it a truly transnational company. the remittances side or social services to the community. 2 joint ventures and 2 representative offices. After nationalization its branch network increased rapidly and so its assets and liabilities. After the inception of Pakistan on August 14. Sri Lanka. Internship Report on Habib Bank Ltd. A part form these the bank’s overseas operations are in 25 countries include 65 branches. These have included the installation of the first mainframe computer in Pakistan followed by the first ATM and more recently. Habib Bank has today 1424 branches. 2 subsidiaries.(Bank Square Branch. Habib Bank came to the fore and opened its branches in foreign countries with its first branch at Colombo. 1947 there were only two Muslim Banks namely Habib Bank and Australasia Bank. Recently Habib Bank was the first bank to offer a golden handshake scheme to its employees making the other commercial banks to follow suit. 1974 Habib Bank was nationalized by the Bhutto government along with other banks. 9 regional general manager head quarters and 2 subsidiaries. Habib Bank has always introduced new vistas.

 To supply or provide employment opportunities to the people.  VALUES & POLICIES OF HBL Policies & Values are general statements. customers and employees.  To earn profit for the bank itself and for its shareholders.24 2. keeping in view the society. These are the result to be achieved.  To procure beforehand self-employment schemes to the people.  MISSION STATEMENT of HABIB BANK LIMITED “To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the emerging markets. procedures or the understanding that guide or channel thinking in decision making. ”  OBJECTIVES OF HBL Objectives are the ends towards which activity is aimed. As a commercial bank the primary objectives of HBL is to earn profit and maximize it as far as possible. The Habib Bank Ltd has following main objectives. .  To help in development and industrialization of the country. and objective.(Bank Square Branch. and granting superior value to our stakeholders. Internship Report on Habib Bank Ltd.A policy defines area within which a decision is to be made. Mingora) . and ensure that the decision will be consistent with. It provides direction for action and regularizes the decision making in certain circumstances.  To take measure to promote business in the country. and contribute to .4 MISSION STATEMENT OF HABIB BANK LIMITED. providing our customers with a premium set of innovative products and services.

1993 Internship Report on Habib Bank Ltd.  Meritocracy At every level. based on objective criteria throughout all the layers of the organization. This force is derived from participative and collective endeavors.  Team Work Our team strives to become a cohesive and unified force. able to achieve a specific level of performance at every layer of the organization. and to respect and reward the agents. Siddiqui. therefore. we form a network of a well-integrated team.25 The HBL defines & practice its policies / values as :  Humility We encourage a culture of mutual respect and treat both our team members and customers with humility and care. Mingora) . integrity means a synergic approach towards abiding our core values. We are. References: 1. to offer you. Practce and Law of Banking in Pakistan 5th Edition Karachi: Royal Book Company. a level of service beyond your expectations. we have designed a consistent system of human resource practices. from selection to advancement.  Culture of Innovation We aim to be proactively responsive to new ideas. leaders and creators of change. the customer. a common set of goals and a spirit to share the glory and the strength to face failures together. Asrar H.  Integrity For us.(Bank Square Branch. United with the force of shared values and integrity.

26 2.(Bank Square Branch. An Internship Report on HBL by Amir Nadeem. MPA. pp5 5. pp-4 3. HBL. Mushtaq A Khan. pp 142-143 4. Mingora) . And Presentation Volume. pp 47 6. Presentation Volume Karachi 1993. 1997-99. Annual Report 2004. 1991. Success Story of Habib Bank Ltd. 1998-99. Salman MPA. An internship Report on HBL by Mohd. HBL. Pp 32-39 Internship Report on Habib Bank Ltd.

Internship Report on Habib Bank Ltd. This is not the end in its self. The manager of the bank heads the front office and the back office is headed by another senior member of staff. A well-developed and properly coordinated structure is an extremely important requirement for the successful operation of any organization. BANK SQUARE BRANCH. It provides the basis framework with in which functions and procedures are performed. There are also sub managers heading each department. The organization structure of Habib Bank is described on the next page. However detailed description about the organization is presented here below & overall organizational structure is focused rather than the branch`s structure.27 CHAPTER 3 OVERVIEW OF HABIB BANK LIMITED.SWAT The HBL Bank Square Branch. Organizational structure implies a formalized intestinal structure of Roles/ position.MINGORA. He is the responsible person for any activity that is happening inside the premises of the bank.1 ORGANIZATIONAL STRUCTURE Organizing is a function of management. Organization is end result of organizing. He looks over different issues in the bank. Mingora) . So organizing is a part of management that involves establishing intentional structure of roles for the people to fill an enterprise.(Bank Square Branch. 3. rather mean which help achieve certain objectives.Mingora is headed by the manager. It is a process of breaking down the overall tasks of the enterprise into individual assignments/ activities and then getting them put together in units or department or groups along with the delegation of authority to a manager of a unit/ department/ group.

good and services to create exchanges that satisfy individual and organizational objectives.P. promotion and distribution of ideas. pricing.(Bank Square Branch.C.V.28 ORGANIZATIONAL STRUCTURE of HABIB BANK LIMITED PRESIDENT  Board of Directors  Director Director Director Director Director Director Member Member SEVP SEVP Clerical Staf N.P  V.S.P  OGIII 3.2 MARKETING POLICIES: Marketing is the process of playing and executing the conception.V.V. Mingora) .  A.P. Internship Report on Habib Bank Ltd.  CHAIRMAN Member Member SEVP SEVP OGI  Executive Committee  Member Member SEVP OGII SEVP E.  S.

3. then there are 5 banking groups.4 HUMAN RESOURCE MANAGEMENT / POLICIES: Internship Report on Habib Bank Ltd.3 MANAGEMENT POLICIES: Managerial policies. Each group executive has the client responsibilities for his group. which deals with the management issues and formulation of strategies. According to this structure affairs of Habib Bank are controlled though President and Members Executive Committee who are normally Senior Executive Vice Presidents of the Bank based at head office. 3. HBL is headed by a president.(Bank Square Branch. television etc) which encompasses the different products offered to different segments. Each provincial headquarter control branches in their area of jurisdiction through circle offices. each one headed by a group executive.29 HBL also adopts certain marketing techniques to enhance the image of the bank. The HBL has recently launched a strong marketing campaign through the electronic media(net. prior to which bank was working on geographical basis . Each province has a provincial head quarter headed by provincial Chief and assisted by regional general managers. Most of the marketing takes place through various deposits mobilization schemes through advertising in news paper and other media and there is more emphasis on customer services to have more satisfied client who can recommend to their associates and friends. Each circle office supervises various zones headed by zonal chief comprising 25 to 40 branches in each zone. This new structure was developed 1997. Mingora) . . are those. Similarly these group are also responsible for developments in their respective fields.

Method of Recruitment HBL has started a banking course in association with Institute of Business Administration (IBA). 3rd Division or D. A few steps are involved in the recruitment process of IBA Graduates.a RECRUITMENT OF STAFF Recruitment is the development of a pool of applicants for a job. they find a number of vacancies at HBL waiting for them. and Honors/first degree from International Universities. 26 years is the age requirement.30 Human Resource Management has always been the key factor in an organization’s achievements. 3. training and motivation of employees. HBL has devised its own policies for the recruitment. The requisites of HBL recruitment policy are as follows: Qualification requisite is Masters in Business or Public Administration. The primary concern of HRM has been on the subject to mould the personality of employees in a manner which formulates the individual goal of the staff into the organizational objective. The interested candidates are called of for an interview at the Head Office in the initial process of recruitment. Management Sciences. The selected one’s serve the organization with their skill and qualification.4. Mingora) . The interested candidates apply against the seats.Grade in any examination after Matriculation onwards of is unacceptable. Internship Report on Habib Bank Ltd. The employees of an organization forever determine the route of success for the business. Karachi. When the graduates of IBA completes their degree program.(Bank Square Branch.

analytical experience. Lahore and Islamabad. Short listing restricts a small group of candidates selected for the final interview. Mingora) . as well as it seeks the opportunities to use their expertise professionally. Internship Report on Habib Bank Ltd. Every MDI has a faculty of staff with the principal as its head.  Basic Banking Training. There are three staff training centres of Habib Bank in Pakistan located at Karachi.31 The committee including the Manager of Retail Banking services and Treasury manager evaluates the candidates on the basis of personality. The principal is always a person of the level of Vice-President. The selected candidates go through a medical check up as well. The directing officers are well versed in their fields of specialty.b TRAINING AND DEVELOPMENT Training enables the employees to explore their potential. communication skill and educational qualifications. evaluating their subject knowledge.4. Sub Managers is made eventually. 3. development polishes that talent and skill. general know how and particular information about the job. After that they are engaged in a 3 months service training program. The committee including Chief Manager Administration seeks the potential candidates. Their appointment as Grade 7. HBL exercise many kind of training and development programs for the employees. with sound knowledge of all aspects of banking. The teaching staff are called directing officers.(Bank Square Branch. These centres are called Management Development Institutes (MDI). The various training programmes available at Habib Bank Management Development Institutes. The successful candidates are enlisted for the job. This enables them to get acquainted with all the functions in the bank.

(1) Deposits (2) Advances (3) clearing (4) Bills (5) Remittances (6) General administration and staff matters (7) Business communication (8) Accounting The main theme of this training course is that about 30 trainee officers are selected for a class. All the papers carry a maximum of 100 marks.(Bank Square Branch. Apart from them the newly promoted officers from clerical cadre also get this basic training. All the above mentioned subjects are not taught at a time but are taught one after another. This is done to keep the examination system transparent.32  Training Course In International Banking.  Short Courses Offered. At the return of trainees from branches. In this programme the entire operations of domestic banking are explained to the trainees. they are put to test by taking their examination. For a week or two a subject is taught theoretically in the class room and then all the trainee officers are sent to various branches of the bank where they get a practical touch of all those taught in class-room. Then the marks of papers are totalled and result declared. The various subjects/courses taught in this program are. And the same method is repeated for all the subjects. Mingora) . with a duration of six months. Basic banking training This is the most important training programme available. which is normally having 25 marks. in detail. having one hour time duration to solve. This training is imparted to the newly recruited officers in Grade III & II. Marking of the papers is done not by a single person but every directing staff is responsible to mark his own section of the paper. Answer sheets are handed-over to the trainees to look into the mistakes they have made and they are allowed to raise objections if they do not agree with the marking of their papers. Question papers are mostly objective type. Internship Report on Habib Bank Ltd.

These course can be Internship Report on Habib Bank Ltd. At the end of six months training there is a passing out ceremony. Short courses Apart from the above. Trainees getting first and second position in the group are awarded three and two grade increments respectively. In this programme only the dynamics of international banking and international trade are touched upon. These trainees after getting theoretical knowledge of the subject for a week or two are sent to foreign exchange dealing branches to get practical training of whatever they have learnt in the institute. If they are fresh recruits they are sent back home during their probation period. Their time duration varies from three to 15 days. and then all the trainees report back to their zonal offices for further placement in various offices and branches. Those trainees who secure 70% or above marks are awarded one grade increment. Mingora) . The first five trainees from various groups of basic training are selected for this course. Pass percentage in examination is 60%. After completion of the said course trainees are posted in various foreign exchange dealing branches. various short and refresher courses on various topics/subjects are arranged by MDIs throughout the year.(Bank Square Branch.33 Those students who get failed in three subjects are sent back to their places of posting and are not considered fit for training. The main topics of this course are (1) Imports (2) Exports (3) Inward remittances (4) Outward remittances (5) Foreign currency deposits. Training course in international banking This is a three months training course in foreign exchange and International Banking.

Visa Cards.34 - Short/refresher course on advances for officers dealing in advances. how to deal bank's customers in a better way. Muhafiz traveller cheques. - Seminars on the introduction and process-flow of various new products of Habib Bank like Carore-Pati Deposit Certificates. - Short/refresher course on business communication and presentation skills. like new currency exchange rate system. The non-clerical staff are trained how to give Internship Report on Habib Bank Ltd. Mingora) . for internal auditors of the bank. how to carry out a successful audit of a branch. - Short/refresher course on audit. and complaint handling. These short-courses and seminars are held by Management Development Institutes in a continuous manner. and officers from various branches/offices are constantly coming to and going form MDIs.(Bank Square Branch. on how to manage human resources of the bank in a better way. - Seminars on customer service. Besides this the MDIs arrange training courses for clerical and non-clerical staff in which various functions of the clerical and non-clerical staff are taught.ATM etc. - Seminars on various new developments in banking industry. in which various ways and means are taught to the auditors. - Seminar on cash management. - Short/refresher course for staff-officers and admin. - Short/refresher course in foreign exchange for the personnel working in foreign exchange department. - Short/refresher course for managers of branches to refresh their memories about the modus-operandi of how to better manage a branch. officers.

c TECHNIQUES OF TRAINING All the known and recognized techniques of pedagogy are used while imparting training to the trainees at Habib Bank Management Development Institutes.Trainees are called upon to present various topics/subjects before the class. - Presentations . direct.Trainees are sent to branches to practice what has been taught to them in class room. on daily basis. A highly motivated person will work hard towards achieving performance goals. Mingora) . - On job training . 3. according to the needs and requirements of the zone and region concerned. - Question/Answer . There are four lectures a day. Apart from MDIs.35 courteous service to staff members and customers and how to take care of security of branch premises.4.d MOTIVATION Motivation refers to forces that energize.Projectors are used to explain intricate problems like exchange rates. - Lectures . such a person will be highly productive. Internship Report on Habib Bank Ltd. Time duration of a lecture is 1 ½ hour. on various topics/subjects.(Bank Square Branch. With adequate ability and understanding of the job. zonal and regional offices also arrange short training courses at local levels. - Projectors .Trainees are encouraged to put questions at the end of each lecture.The directing staff deliver lectures to the trainees in class rooms. and sustain a person’s efforts. 3.4.

(Bank Square Branch.  Salaries There is no preset pay scale in HBL Many people obtain dissimilar salaries even though they had been chosen for the same batch under similar conditions with identical qualification. Mingora) . claimed by the employees for themselves and their dependants up to a maximum amount of Internship Report on Habib Bank Ltd.36 Diverse techniques are exploited at HBL for the motivation and performance appraisal of employees.  Medical Allowance The Bank compensate the expenses of medical advice and medicines. The procedures are as follows:  Audit Report These reports are prepared by auditors and are sent to the Head Office for performance appraisal.  Inspections Inspection teams are sent from time to time from the Head Office to check the performance of various employees and identify any irregularities to take steps accordingly.  Sanctions Punishment may be conferred in case of misconduct by halting promotion and bonus.  House Rent Allowance House Rent allowance is paid to all categories of staff This allowance is not payable to those who are provided with accommodation by the bank. It’s an efficient means for improving the performance of the employees.

37 Rs. Mingora) .1 Retail Banking Group: 1.This area of financing is currently enjoying the high priority among the financial institutions in the country. aptitude. housing.The expansion of consumer financing in the past two years has been an important factor in driving the overall economy forward.a Consumer Financing Consumer financing is relatively new phenomena & is still in infancy.  Promotion Promotion is chiefly on the base of capability.5 THE DIFFERENT BUSINESS UNITS OF HBL 3. This segment of HBL include the following products  Auto Financing.(Bank Square Branch. automobiles units etc has increased & as a result the production level has increased which has led to the creation of greater employment opportunities. In this endeavor HBL has developed a complete range of products to meet the requirements of all the segments.  House Financing. Internship Report on Habib Bank Ltd. talent and performance of the employees. 3. HBL has taken a lead role in this segment as it continues to capture additional market shares.5.2500. The overall demand of durables. On production of medical certificates by employees indicating payment made by him the bank compensate the charges.

Value Cards. Fast Transfer etc )  Balance Transfer Facility. The bank offers products to support all facets of this industry.  Online Banking. which was not previously available to them. in this way farmers find convenient to this condition & this has a wide acceptability in the market.(Bank Square Branch. (Flexi-Loans. by bringing within the reach of thousand of farmers access to modern farming technology. iCards) 1. This unit of the HBL offers the following products  3 year Revolving Finance  Tractor Lease Finance  Livestock Finance  Fish Farming Finance Internship Report on Habib Bank Ltd. (Visa Cards.  ATM/Debit Cards.Auto Cash. the bank enhanced its products offering to retain its lead position in the market.Running Finance etc)  Consumer Durable Finance.  Internet Banking.Top-Up-Facility. Specially it provides facility for a period of 3 years instead of financing being confined just to harvest season. Through the bank`s wide network of branches of which 52% are located in rural areas.b Agriculture Financing In this sector HBL has disbursed over Rs 13 billion during the year & has proved the largest contributer to agriculture financing in Pakistan. (Life Styles. Mingora) .38  Consumer Loans. HBL intervention has enabled the industry to develop.

Mangla Dam.5. & textile made ups. traders . sports goods.c Commercial Banking The Commercial Banking division serves clients mainly comprising of mid sized businesses that consist of manufacturers. HBL stands side by side with the Govt to promote this sector.39  Combined Harvester Finance 1. Over 1500 middle market customers have benefited from banks dedicated support. Pre & Post Shipments) 3. Commercial Banking operates through 18 branches which are spread throughout the country. importers & exporters of engineering products. Corporate & Investment Banking HBL has an integral development partner for corporates in Pakistan since 1947. The Bank has remained at the forefront of financial support by assisting in the development of the country industrial sector & the fuel and energy sector.(Bank Square Branch. The bank has continues this tradition & today is a key Internship Report on Habib Bank Ltd.2. Overall HBL remains a market leader in this sector & has a total disbursements of over Rs 19 billion. Mingora) . This unit of the HBL offers the following products  SME Financing  Long Term Fix Assets Finance  Trade & Working Capital Finance  Import & Export Finance ( Receivables. HBL provided support by establishing Letters of Credits and providing capital of millions for its several projects such as Warsak Dam. In the early days of WAPDA. Tarbela Dam.

(Bank Square Branch.40 partner not only in Govt sponsored projects but also in rapidly developing private projects such as telecommunication. Mingora) . HBL is synonymous with Pakistan in the international banking arena. Home remittances form an integral part of the country`s foreign exchange reserves & the bank has devoted considerable efforts to enhance the inflows in a secure manner. International Banking HBL has the largest international branch network with presence in 25 countries. oil & gas & construction. Over the year HBL has provided a one window financing facility to meet local & foreign currency requirements for corporates in Pakistan. In this regard the bank has introduced the IBTS(inter branch transaction services) at the dedicated branches that ensures timely credits to the beneficiary accounts. This unit of the HBL offers the following products  Industrial & Project Finance  Structured Trade Finance  Capital Market Investments  Cash Management Services  PC Banking 3.out of $ 3. In the year 2004 .9 billion. The international banking division of HBL is known as active trade finance facilitator for Pakistan`s trade partners.5. power.3.$ 799 million Internship Report on Habib Bank Ltd. . The Corporate division operates in 10 branches & it serves over 500 client. In the year 1990 HBL was the first Pakistani bank to start dollar financing for the needed imports. its was such an era where there was a shortage of foreign exchange in the country.

Over the past years the bank has taken strategic decision to concentrate on upgrading the domestic & international operations. This struggle also have benefited the clients to access their funds through the 119 ATMs which are located at the different branches of HBL across Pakistan. The system helps to centralize data from HBL`s 1424 domestic branches to the head office.(Bank Square Branch. Technology HBL remains committed to service its clients with banking system based on state of art technology.5. Mingora) .41 remittances was through HBL branches. More than US$ 15 million have been spended on sourcing and implementing the MISYS system throughout the HBL network. In this way HBL has proves a true global relationship to its corporate. This unit of the HBL offers the following products  Trade Finance  Retail / Consumer Banking  Multi-currency Payments & Clearing Service  Home Remittances  Treasury & Investment Services 3. This unit of the HBL offers the following products  Centralized Data Processing Internship Report on Habib Bank Ltd.4. institutional and individual clients. HBL is also the member of the “1 Link” ATM switch network that ensures the customers to access 508 locations throughout the country.

Hockey. In 1975 the bank established its separate sports division with the specific aim of participating in the sporting events at domestic and international level. Corporate & Social Responsibility HBL is a responsible corporate citizen and is conscious of the role it needs to play in the field of social development. Badminton & Golf. such as health.5. Football.5. The contribution of this unit are in the fields of  Education  Health & Medical  Environment  Sports 3. Bank Alfalah. Table Tennis.42  VPN Connectivity of the 1424 domestic branches  State Of The Art Banking (-trade finance –treasury – branch automation – CRM) 3. It has been an active sponsor of sporting event since its inception. HBL actively supported the recently victims of the earthquake. Mingora) .6 TECHNOLOGICAL FRAMEWORK AT HBL HBL has been trying to cope up with competitors like Citibank. Internship Report on Habib Bank Ltd.(Bank Square Branch. education & sports etc. In 1969 the bank formed its own Hockey team. Faysal Bank and ABN Amro Bank in the technological field since a long time. Over the years HBL has actively supported sports such as Cricket.

for sending important letters or any other. Some of the equipments provided to the staff are as follows: POS Machines POS stands for “Point Of Sale”. Validator This is a small sized electronic device used for checking the dollar currency whether genuine or fake The Bank is mostly in the business of currency. Whenever sales are made on credit cards.1 Equipments Used At HBL A diverse variety of useful machinery is brought into practice at HBL to help the employees of different departments in handling varied tasks. Mingora) . FAX Machine Fax machine is used to communicate the messages from one Bank to another. HBL has also become online. The overall computerization system at HBL comprise of the following equipments. which means that all the branches of HBL access one central database and customers can retrieve information of other branches from the local one’s.(Bank Square Branch. 3. it is used to record the sales. Internship Report on Habib Bank Ltd. documents for correspondence.43 New banks are emerging and with modern day equipments the atmosphere is getting more competitive than ever.6. because he is always involved in money payments and receipts. This machine is used for the credit cards. Validator makes the job easier for the cashier.

In 42 hours message or telex reaches the required destination. All the signature cards are kept in the stationary in the order of account numbers. But this arrangement is only within the HBL Branches not with other banks. ATM – Automated Teller Machine This machine is used by the customers to make transactions in their accounts even after banking hours. and specimen signature. amount. This card is filled by the customer at the time of account opening. It consists of the customer’s name. Internship Report on Habib Bank Ltd. Scanner Bank makes the use of scanner for verification of the customers signatures in the computers. so that signature can be confirmed every time customer makes transactions in his account. it can be easily found. Signature Card This instrument is used to keep a record of the customer’s signature. The customers’ signatures are scanned with the help of this appliance. So whenever the card is needed for any purpose.44 Auto Telex This machine has increased the efficiency of service. account number. Mingora) .(Bank Square Branch.

Management. New York: Mc.21--30 4. Nadia. 1990.45 References 1. pp-123 3. HBL Annual Report 2004. 4th Edition .30 Internship Report on Habib Bank Ltd. Hienz Weihrich and Harold Koontz. Naz. New York. 5. 1994: pp-122 2. Graw – Hill Inc. Ibid. Marketing. pp. Section 1999. Mac Millan Publishing Company.(Bank Square Branch. Evans and Barry Borman. 10th Edition . p. “Internship Report on HABIB BANK LIMITED”. IMS. Department of Public Administration. Joel R. Mingora) . pp-8.

This increases the efficiency of workers and makes the job of the employees easier. Hence it can be concluded that HBL has adopted to the policy of functional departmentalization. 5) Clearing Dept. The Bank Square Branch. 9) DataCentre . Mingora) .46 CHAPTER 4 DIFFERENT DEPARTMENTS OF HBL Every organization is divided into definite departments. product. The division can be done on the basis of functions.Mingora of HBL is comprised of several departments. customers or geographical location. There are several aspects on which departmentalization in an organization can be based. 1) Deposits Dept. 7) Sales Dept. Each department perform different kind of job and requires staff with specialized skill to handle the particular job. The division is made on the basis of functions and job they perform. The main departments at the HBL are mentioned below. 2) Advances Dept. Also included is the detailed study at the specific function these departments perform.(Bank Square Branch. Internship Report on Habib Bank Ltd. 6) Safe-deposit lockers etc Dept. 4) Bills Dept. 8) Cash Dept. 3) Remittances Dept.

Internship Report on Habib Bank Ltd.1 DEPOSITS: Accepting deposits is one of the two basic functions of a bank.(Bank Square Branch. Previously even Rs. If the average balance is less than it.47 4. 100/. 150/.as initial deposit. Because with out deposits any bank can not even think of its existence. major (18 or more years of age).were enough to open and maintain an account with Habib Bank but the new management after assessing the book keeping cost has come to the conclusion that it is not economical to open and keep an account with a balance less than Rs. To be able to open an account with Habib Bank one should be sane. To establish this relationship one has to open an account with a bank. To keep an account alive and earn profit on it one has to retain an average balance of Rs. A customer offers money to the banker to be kept as a deposit and the banker accepts that offer and a contractual relationship develops. Mingora) . To open an account with Habib Bank one has to deposit Rs 5000/. With the initial deposit of money by a person with a banker the Banker-customer relationship comes into being. 5000/-. Opening of an Account This is the most important and basic contract between a customer and a banker. The other being advances. Deposits is a trust reposed in a banker by the deposit holders who are commonly the people at large. So the mainstay of Habib Bank as like other banks is deposits. Rs. The account opening form is a very simple document wherein one has to put in his signature. solvent and not debarred by law from opening a bank account. Below this one can not open an account in HBL. 5000/-.will be deducted as incidental charges after every six months. and has to arrange for his introduction to the banker through an old customer of the bank.

An account holder can use this advantage any time with a Rs 200 charge per year. Time duration of fixed Internship Report on Habib Bank Ltd.48 After depositing money and signing the account opening form a cheque book is issued to the account holder through which he can withdraw his money from the bank as and when he requires. Accounts can be of three categories.(Bank Square Branch. They are considered as the time liabilities of a bank as the banker knows as to when a certain deposit is going to be withdrawn. The current profit rate on saving accounts is 7% per annum. Fixed deposits can be of various types depending upon the nature and time duration of deposits. a b c Current account Saving account Fixed deposit account a) Current account is zero profit account and is mostly opened by businesses.Loss Sharing (PLS) account. which can increase or decrease with profitability of the bank's operations. A major chunk of the deposits of Habib Bank are saving deposits. respectively.e. without any prior notice to the banker. An account holder can draw cheque on his saving account freely but not like a current account. Profit. but it is optional. because such deposits can be withdrawn at any time. as certain percentage is given to saving account holders. Uptill now Habib Bank have never declared loss and is continuously giving profits to its account holders. Mingora) . The form for ATM is also filled by the customer. Deposits in current account are considered demand liabilities of a bank. after every six months. meaning that the account holder will take the profits and incur/bear the losses if the bank earns profits or makes losses. Saving deposits of a bank have both the characteristics of current and fixed deposits. i. Term deposit accounts as the name indicates are fixed for a certain period of time. Saving accounts are called Profit. b) Saving account is a profit bearing account. some portion of these deposits is demand and other portion is time liabilities . There is no limit/bar on withdrawal of money from a current account.

7 % 3. profit is paid on monthly basis. Khas term deposit receipt (KTDR) It is like a term deposit receipt but profit is paid at the time of encashement. while the principal amount is paid at maturity. Short Notice Time Deposit. 1. Golden investment scheme (GIS) The life period of these deposit certificates is three years. TDR (18-24 months) P. TDR (42-48 months) P. and hence the effective rate of profit is increased.rate 12. TDR (30-36 months) P.rate 9% 5.e. The rates of profit are as like TDR.50 % 7. As its name indicates. Fixed deposits with time duration and profit rates are shown here under. Internship Report on Habib Bank Ltd. TDR (Term Deposit Receipt) (3 months) profit rate 8% 4.(Bank Square Branch. Mingora) . TDR (6 months) P. Monthly income scheme (MIS) Life period of these deposit certificates is three and five years.50 % 9. and with this the effective rate of profit is increased from the actual rate i. TDR (12 months) P.rate 11.rate 11 % 8.rate 10. The main feature of this scheme is that profit is paid on monthly basis.50% Profit on these deposits is paid out on six monthly basis. and not on six monthly basis. Short Notice Time Deposit (SNTD-7): Time duration 7 days profit rate 6% 2.49 deposits at Habib Bank ranges from one week to five years.5%. TDR (60 months & above) P. (SNTD-30) 30 days.rate 10 % 6. 14.

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Carore Pati Deposit Certificate
The new craze in deposit market is the recently introduced product, the Carore Pati
Deposit certificates. This product has set new standards of popularity and success. It
is one of the many firsts by Habib Bank Ltd in the deposit sector of banking. It is a
highly innovative product, no one has ever thought of it before. The name of the
product "Carore Pati" is at the same time highly expressive and attractive. This
product has driven the depositors and savers' market crazy. And everyone is trying to
become "Ratoon Raat Karore Pati".
Habib Bank is carrying on a very aggressive and effective advertising strategy using
electronic and print media at the same time. This product is so heavily advertised
that almost all the people having bank accounts anywhere in Pakistan in any bank
are aware of its attractive features.
The target market for this product is the middle and upper classes of society. People
who can afford to part-away with Rs. 50,000/- of their savings for at least 3 months
can avail of this product. The salient features of this product are
-

Face value of Carore Pati deposit certificate is Rs. 50,000/-

-

Time duration is 3, 6 and 12 months.

-

Rate of profit is 6, 7, 8% respectively.

-

Lucky draw is held on every 15th day of each calendar month.

-

A certificate purchased on or before last of preceding month is eligible to be
included in the up coming draw.

-

Bumper prize is Rs.10,000,000/- grand prize is Rs.500,000/- and a number
of other small prizes which total comes to 67 prizes.

Habib Bank has received deposits of Rs. 20 billion under this scheme. Seeing the
amazing results of this product other banks have also started similar schemes, like
UBL Caramad, UBL Zaramad and MCB Malaamal.

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Due to these schemes national savings have increased and liquidity problem of
commercial banks solved resulting in easy availability of credit to the traders and
businessmen.

4.2 ADVANCES
To advance loans and to finance businesses and in return to earn mark-up is the main
operational activity of Habib Bank. Deposits are a liability on which a bank has to
pay profit to its account holders. Unless and until these deposits are advanced in the
form of loans to traders, these are a burden for a bank.
Advances / finances can be of two types.

Fund-based financing

Non fund based financing

 Fund-based Financing
In this case funds of a bank or financial institution are involved or in other words we
can say that there is an actual outflow of cash from the bank. It has various types.
(i) Running finance (ii) Demand finance (iii) Over draft (iv) Purchase and
discounting of bills

Running Finance
This is the most common type of finance availed by businessman to meet their
working capital requirements. It is extended for a period of one year. Securities
against such finance are normally hypothecation of stock, mortgage of property etc.
The rate of mark-up is 50 paisa per 1000 per day which comes to 18.25% per
annum. A certain limit is sanctioned by the bank upto which the trader can withdraw
funds from his finance account, for which a cheque book is issued to him.

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Upon sanctioning of the loan the borrower withdraws funds from the Running
finance (RF) account according to his daily requirement and is free to deposit the
funds back when he is no more in need of these, thus bringing back the outstanding
balance in the account to the minimum possible. Mark-up is applied on the resultant
balance of each day. The advantage of such finance for a trader is that he can use
funds of the bank upto his need level and can deposit surplus funds thus saving
himself from the extra mark-up. Mark-up on R/F account is applied on monthly
basis and recovered on quarterly basis.
Demand Finance
This finance is also sanctioned for a period of one year. In this case the entire
amount of finance is credited to party's personal account by debiting finance
account, and mark-up is applied on the entire amount of finance. Installments are
fixed to be recovered on monthly basis, along with mark-up.
Temporary Running Finance
This is also a common form of bank lending when a borrower requires temporary
accommodation, he is allowed to withdraw on his account in excess of the balance
which the borrowing customer has in credit and an overdraft occurs. This
accommodation is generally against collateral securities, when such securities are
present it is called secured overdraft and when no securities are there, it is called
clean overdraft. The borrowing customer is in advantageous position because he has
to pay mark-up only on the balance outstanding against him.
Purchase & Discounting of Bills
Habib Bank purchases outstation cheques from its reliable customers. These cheques
can be in the form of clean bills drawn on an account or trade-bills accompanied by
documents of title to good called documentary bills. Clean bills and documentary
bills of exchange are paid to the customer in full or discounted (as per arrangement)

Internship Report on Habib Bank Ltd.(Bank Square
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90 or even longer period payable upon either the correspondent Bank or opening Bank.A. 60. stipulates payment to the exporter upon maturity of bills of Exchange. have been complied with. 30. Letter of Credit Documentary letter of credit is a bank's written undertaking given to the exporters for payment of certain sum of money on behalf of the importer provided the exporter tenders to the Bank or its overseas agents the specified documents within a specified period in accordance with terms of L. may be Inland as well as well as Import at sight or usance basis. L.C. the exporter draws a sight or demand draft payable at the counter of advising Bank or the Bank specified in teh letter of credit. In this case the negotiating Bank can either reimburse itself or demand reimbursement from opening Bank depending upon terms of L.(Bank Square Branch. The draft is paid on presentation provided that all the other terms and conditions of L. D. it is called usance credit. In other words it is a contingent liability of the bank. Or Usance L . The L.53 and mark-up is applied on the amount disbursed upto the day when these cheques or bills are realized. Sight L .C Where L. In this form of credit.C.C.C.e. However. Non-fund-based Finances In this case funds of the bank are not involved rather the bank undertakes to pay upto a certain amount at the happening of an event. Mingora) . will be called restricted if specific Negotiating Bank is mentioned therein. otherwise it will be considered as unrestricted and freely negotiable in country of beneficiary.C. the exporter can get the bill discounted at fine Internship Report on Habib Bank Ltd.C In this form of credit. exporter draws draft for particular usance i.C.

54

rates of presentation of shipping documents at counter/or after acceptance of draft by
opener as per terms of Letter of Credit.
SECURITIES
Sight LCS

1.

Cash Margin

2.

L.C. application

3.

Personal guarantee of third party of from directors in case of limited
companies.

USANCE L/C

1.

Cash Margin

2.

L.C. application

3.

Accepted Bills of Exchange

4.

Collateral acceptable to Bank

5.

Personal guarantee of third party or directors in case of limited companies.

LETTER OF GUARANTEE
A Bank Guarantee is a legal document which may be defined as an irrevocable
undertaking of a bank to pay to the beneficiary of the guarantee a certain amount of
money if the expected result of a transaction does not occur or in the event of nonperformance of a contractual obligation of a third party by specific time. However,
with a bank guarantee, the bank does not guarantee the success of the transaction
itself. guarantees are as a rule, subject to the laws of the country in which the issuing
bank is located.
Salient Features
It is a non fund based remunerative facility.
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The parties involved are: (1) The beneficiary (2) The principal (3) The guarantor
(Bank) LG's categorized as
i. Demand Guarantees
ii. Conditional Guarantees

Securities for Advances
Habib Bank obtains following types of securities from the borrowers while
advancing loans. (1) Hypothecation (2) Pledge (3) Mortgage (4) Guarantee (5)
Charges (6) Lien
Hypothecation
In hypothecation the property in goods is charged as security for a loan, from the
bank but the ownership and possession of goods remain with borrower. It is a
weaker security and is mostly accepted for running finances, as a certain percentage
of loan amount. To create this charge a letter of hypothecation on a stamped paper is
signed by the borrower.
Pledge
Section 172 of the contract Act 1872, defines a pledge thus"The bailment of goods
as security for payment of a debt or performance of a promise is called pledge". In
case of pledge the ownership remains with the pledger, but the pledgee has the
exclusive possession of property until the advance is repaid in full, while in case of
default the pledgee has the power of sale after giving due notice.
Mortgage
Section 58(a) of the transfer of property Act, 1882 defines that, "A mortgage is the
transfer of an interest in specific immovable property for the purpose of securing the
payment of money advanced or to be advanced by way of loan, and existing or
future debt, or the performance of an engagement which may arise to a pecuniary
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liability". In Habib Bank Ltd., Peshawar two types of mortgages are in practice.
Legal mortgage and equitable mortgage. The main difference between the two is that
the prior one is to be registered with the registrar of properties even if the amount is
less than Rs.100/- and this requires a handsome amount of fees to be paid to the
registerer office while in equitable mortgage the mortgagor deposits title deeds of
properties with the banker, with the specific purpose of creating a mortgage. Here no
fees are to be paid to the government. In Habib Bank, for the facility of borrowers,
certain portion of property is mortgaged by way of legal mortgage and the rest by
equitable mortgage thus saving the borrower from paying extra fees to the registrar
of properties.
Guarantee
Section 126 of the contract Act 1872, defines guarantee , "A contract to perform the
promise or discharge the lability of a third person, in case of his default" when an
applicant for an advance can not offer any tangible security he is asked to provide a
guarantee, which can be personal or third party, to protect the bank against any loss.
Charge
It is a right of payment out of certain property. The charge is created by the act of
parties i.e. the borrower and the bank. Charge on property is created when extending
loans to private or public limited companies, on company's assets. Such a charge is
registered with registrar of companies with in 21 days of creation of charge.
Lien
Lien is a right of the banker to retain the property of the borrower until the claim on
the property is paid. Banker's lien is applicable to all documents or properties which
come into the banker's hands in the course of his normal business as the banker to
his customer. Lien is marked on financial instruments pertaining to the borrower at
the time of advancing a finance facility.

Internship Report on Habib Bank Ltd.(Bank Square
Branch, Mingora)

In case of a draft of Rs. withholding tax and excise duty.(Bank Square Branch. The remitter after receiving the same. sends it to the beneficiary through mail or if he himself is a beneficiary takes it with him to the city where he is going and after presenting it at the counter of the drawee branch receives payment. Habib Bank has a very wide network of branches throughout the length and breadth of country. Banks are the most important players of money market. In case of a draft of Rs. in which he mentions the amount of money. giving particulars of the beneficiary therein.or more. Demand draft is the classical way of remitting funds from one place to another. Several modes of remitting funds are available at Habib Bank which are explained below: Demand Draft (DD) It is a bill of exchange in which a branch of the bank orders another branch of the bank to pay a certain sum of money to the order of a person.3 REMITTANCES It denotes transfer of money from one place to another.25000/. that is why it has got an edge over other commercial bankes in Pakistan in the field of remittances. hand over a printed demand draft with the particular of beneficiary given in and signed by two attorneys of the branch. 50000/.57 4. Mingora) .or more instead of sending advice through mail coded telegraphic message is conveyed to the drawee branch. The drawer branch after handing over the draft to the purchaser prepares an advice and mail it to the drawee branch. test is applied and written down on the advice which is a coded message and testifies the bonafides of the instrument. For this purpose remitter comes to a branch and fills up a request from for the purchase of DD. Internship Report on Habib Bank Ltd. The branch officials after charging bank commission. and one of the characteristics of a developed money market is that transfer of funds from one place to another should be cheap and speedy. name of the beneficiary and place of beneficiary and puts his signatures.

These cheques can be purchased free of cost and is the easiest and cheapest way to transfer funds. The only difference is that the bill of exchange issued by the bank is not handed over to the purchaser but sent through mail by the banker himself. In this case all the other formalities are just like a demand draft. being cost of the telegraphic message. A TT message is invariably tested and coded.are charged by the bank.(Bank Square Branch. The name Muhafiz indicates the safety in carrying these travellers cheques instead of cash. Mingora) . in the field of remittances. These cheques can not be purchased by firms. For a TT an extra Rs. companies and other legal bodies. MT's are normally issued for the customers who has given standing instructions to remit funds to a beneficiary on regular basis. Muhafiz rupee traveller's cheques It is yet another innovative product of Habib Bank Ltd.58 Telegraphic Transfer (TT) It is a much more faster way of transferring funds from one place to another. - Contact of the bank with the people who are not regular customers Internship Report on Habib Bank Ltd. No demand draft is issued but a TT message is prepared in coded form and transmitted to the drawee branch through telegraph office. Although Habib Bank do not charge any commission but due to this product it is getting several other benefits. Only individuals can enjoy this facility. The strategy behind such decision is to attract individual and walk-in customers towards the bank. which are: - Cash inflow to due sales of Muhafiz. 50/. but in the application form the purchaser specifies that he wants a telegraphic transfer. Mail Transfer (MT) It is almost same like the other two modes of remittance.

In this agency arrangement the banker is the agent and the customer is the principal. These cheques are available in denomination of 100. One has just to sign an application form and hand over cash to the banker. This function of collecting bills is done by the branches for a commission and it is done on behalf of the customers at his risk and responsibility. The sale and purchase of Muhafiz Travellers' Cheques is very easy and consumer friendly.(Bank Square Branch. by acting as a collecting agent for its customers when various customers of the bank deposit outstation cheques in their accounts the branch collects the proceeds of the same on behalf of its customers. 50000. So other commercial banks are following suit. This product was for the first time introduced by Habib Bank Ltd. Cheques or other documents deposited by the customers are called bills. Cheques or drafts are called clean bills while bills of exchange accompanied by documents of title to goods are called documentary bills. 100000).59 - a positive image build-up. and the banker will issue a Muhafiz T. Muhafiz Travellers' Cheque can be purchased from 700 branches and can be encashed at 1700 branches of Habib Bank throughout Pakistan. 25000.C. Internship Report on Habib Bank Ltd. 5000. When Muhafiz Travellers' Cheque is to be encashed at another branch counter. Muhafiz Travellors' Cheque has given immense relief to traders from the tension of carrying cash with themselves from one city to another. To increase its market share Habib bank has introduced a new scheme of prizes for the purchasers of Muhafiz Travellers' Cheques. 1000.4 BILLS DEPARTMENT A banker acts as an agent to its customers. 4. Mingora) . The purchaser had just to sign in the cage given on the face of cheque. 500. A total of 1000 prizes are available ranging from tape-recorder to 1600 CC car. the purchaser has to countersign in the other cage given on the face of the cheque and he gets cash from branch counter. 10000. Habib Bank also carries out the same function.

Mingora) . He has to deposit a certain sum of money as a security which is called key deposit and has to pay an annual rent.60 Bills are deposited by customers. Internship Report on Habib Bank Ltd. since bankers are the custodians of public wealth so they provide safe deposit vaults to the people to put in their valuables. 5. For this purpose three types of lockers are available at Habib Bank branches. On receipt of a bill. SAFE-DEPOSIT LOCKERS It is also a very important facility provided by Habib Bank. medium size and large size. viz. The licensee gets a license to use bank's locker after signing the contract. Bills are a contingent liability for a bank. When a customer wants to operate a locker he comes to the banker and signs in a an attendance register. A person who wants to get a bank's locker has to sign a form which is a sort of a contract between the banker who is licensor and the customer who is licensee. The master key remains with the banker. Every bill received is specially crossed by a special crossing stamp of the branch which denotes that the bill in now a property of the bank branch.(Bank Square Branch. the customer is issued a receipt and the bill is lodged in books as outward bill for collection (OBC) in case of clean cheques and outward documentary bill for collection (ODBC) in case of documentary bill. Then the banker applies his master key to the locker and then the customer applies his own key and the locker opens. When the customer wants to end this relationship he surrenders his key and the key deposit which was kept with the banker as a security is returned back to him. The customer is allowed to operate the locker during bank's counter hours. The bills are then sent to the drawee branch which sends back a credit advice to the sending branch upon realization of the bill. small size. The licensee is allotted a locker and a key is handed over to him both carrying specific numbers. After putting in his valuables the customer closes the locker with his own key. Then a discharge is given at the back of the instrument by putting a stamp which says that payee's account will be credited on realization.

The upper class and the middle class are targeted directly as they can have the possible customers of the bank. architects. The marketing strategies devised by the sales personnel’s include a few steps. Foreign Currency (FCY) and Local Currency (LCY) receipts and payments are Internship Report on Habib Bank Ltd.61 4.5 SALES DEPARTMENT The job of sales department is to identify possible customers and then attract them towards the bank so that they open account with the bank.(Bank Square Branch. Wasim Jan. Information collected from the lower class which comprise news hawkers. engineers. The lower class is targeted indirectly as these people are exploited to reach the likely customers of the above classes. the middle class and the lower class. 4. Sales Department in Bank Square Branch. The upper class. HBL is headed by Mr. Mingora) . which include doctors. and other clerical staff proves very handy in distinguishing customers. businessmen. Two of these people looks for possible clients and visits different people from varied professions. forces personnel and store owners.Mingora. shopkeepers.1 MARKETTING STRATEGIES The foremost job of the sales force is to bring new customers to the bank. Market Segmentation The market is divided into three parts. The job of the remaining person is to attend customers when they make a visit to the bank and to convince them for the banks varied product.6 CASH DEPARTMENT Cash Department deals in receiving cash and giving cash. At the cash counter. Including him the sales force is comprised of 3 personnel.

(Bank Square Branch. Hardware and Software trouble shooting. Mingora) . The data centre consists of very sophisticated computer involving all the data of the bank assets and customer deposits and lending. Back-up for all the computer systems is maintained in this section. The cashier makes payments to the customers from that money At the end of the day the cashiers check their balances and the remaining amounts is placed back in the vault. Department is supervised by a Chief Teller. The names of the authorized personnel who are allowed in cash department are mentioned on the entrance door of the cash department. Cheques are received and presented for transfer or collection purpose. Every employee is given their personal code which they feed into the system when they work. In other words this section regulates every information that is fed by employees into their computers. The money is kept in the vault which is built along with the cash department. Internees are not allowed to enter the data center. Cash counter is also termed as teller counter. Cash handling is sensitive work. This code is the identification of an employee. Internees are not allowed to enter the cash department. The employees at cash department also handle credit Card payments. only then the door gets unlocked and they can enter. 4. When they punch the specific code.7 DATA CENTRE Data Centre is the place where the computer section of the bank is located. This is a very sensitive section of the Bank and only authorized personnel are allowed to enter this section.62 managed. Every body at the bank is not allowed to enter the cash department premises. It has an automatically locking system at the entrance door and the authorized personnel are provided with a specific code. This code is recorded at the data centre and it records every transaction made by any code at any time. Other than recording every transaction the data centre also performs the following functions. Internship Report on Habib Bank Ltd. Every Cashier is provided with a specific amount of money in the morning from the vault.

The setup of data centre includes the following functions. Handling the printer setup in front office as well as back office.Mingora is also assisted by the HBL Mardan Branch in the data center department. A well trained personnel is employed to look after the operations in data centre. The HBL Bank Square Branch. Internship Report on Habib Bank Ltd. Mingora) . Maintaining the back – up tape devices.(Bank Square Branch.Mingora for assistance. Taking back-ups on daily basis. downloading all the data from Karachi Head Office in the morning and. sending all the data back at the end of the day Keeping inventory of all the hardware installed Contacting dealers for maintenance of computers. Satellite communication equipment. Training computer users.e. In other words maintaining every technical aspect of the bank comes in the responsibilities of the data canter. Highly qualified recruits from HBL Mardan Branch makes their visits to the HBL Bank Square Branch. Start of day procedure and end of day procedure i.63 Installation of new hardware and software. Setting file servers.

Internship Report on Habib Bank Ltd. Lahore: Pakistan Kitab Markaz. p. Officer Sales Department. (1998). (On-line) Available www. 10. Ibid. 5. HABIB BANK LIMITED (2000). Officer Autoloans Department.(Bank Square Branch. Brochure – Account Terms & Conditions.Mingora. 2. HBL Bank Square Branch. Ibid.Mingora. April 30 2002 8.64 References 1. HBL Bank Square Branch. Interview with “ Mr Mumtaz ”.Mingora. Mingora) . HBL Bank Square Branch. Prof. Ibid. (2040). 6.26 7.habibbank. Interview with “Mr. Bank Square Branch. 11. Officer Remittance Department. HABIB BANK LIMITED.com <Accessed on jan. 4. Brochure – Autoloans. M. 2004> 3. April 30 2002. April 30 2002 9.Mingora.Mingora. Nasir. Wasim Jan”. Banking Currency and Finance”. Interview with “ Mr Shah Jehan ”. Saeed. Bank Square Branch. Ibid.

thus deposits will Internship Report on Habib Bank Ltd.65 CHAPTER 5 CRITICAL ANALYSIS Analysis is the most important part of the report. The different Ratios calculations are taken from the annual balance sheet for the year ended December 31.(Bank Square Branch.1 FINANCIAL ANALYSIS Financial analysis of an organization expresses the performance of the bank for over a period of time. It is always linked to another one. It identifies the possible solutions to problems faced inside the bank and gives an insight of the opportunities. it has to offer higher interest rates. Mingora is divided in two parts. which can be exploited to reap benefits.Critical Analysis of an organization discovers its potential areas of improvement and evaluates its performance of the past period. 5. Considering the example of higher interest. 1. The critical analysis of HBL Bank Square Branch. An increase or decrease in one ratio does not mean anything good or bad. keen and comprehensive analysis leads to good recommendations & helps for the improvement of the existing conditions. Mingora) . because it depends on the personal observation of the author. if the bank want to have most of the deposits of the market. Financial ratios have their own importance in analyzing the firm’s performance. 2004. Varied relations are drawn on the basis of this analysis. Financial Analysis. only a good. that is more important. 2. This would bring the deposits. The financial analysis is based on the national performance of HBL. Different ratios analyze the bank’s capabilities. SWOT Analysis.

Relativity is the prime factor in evaluation of ratios. Internship Report on Habib Bank Ltd.12 0.04 Operation Cost to Assets 2. The financial ratios of the HBL reflects its stronger position in the market. thus decreasing the profit ratio.10 Fixed Assets Turnover 21.87 17. Ratios 2003 2004 Gross profit margin 31. The overall financial position shows that the bank is growing and is on upward direction in profitability as well.97% 40.56% Return on Assets (After Assets) 1. Different values comes out from the calculations for year 2003 and year 2004.81% 2.(Bank Square Branch.25% 4.15% 12.18% 0. Advances have been made which have resulted in the fall of cash. but on the other hand it will have to pay higher interest as well.97% 3.66 increase.20% The graphical representation of these ratios is given separately.91% Return on Assets (Before Taxes) 2.91% 3. The banks deposits have increased it has also increased the profits.82% Debt to Equity Ratio 25 43 Operation Cost to Deposits 4.99% Assets turnover Ratio 0.98% Net Interest Income to Assets 3. The financial Analysis is as follows. Mingora) .86% Total Expenditures to Deposits 16.

1 STRENGTHS HBL benefit from a few points which ultimately makes its backing strengthened. which adds to its value. the bank is now enjoying economies of scale. Its branches are spread across all the continents. Some of these points are as follows:  REPUTATION HBL is a renowned bank all over the world. However its also encompass generally the Bank Square Branch. HBL has some unique factors like being the oldest bank of the region. This has enabled customers to make transaction more easily throughout the country.67 5. Its background and role in the economy of the country creates attraction for people. The formal SWOT analysis constitutes of four different solid parts. whose benefit or loss is automatically the part of HBL Bank Square Branch. Mingora) . It also has agency arrangements in areas where it does not have any branch. 5. It has increased the operational efficiency and has resulted in reduced risk. As the bank has expanded. This old presence of HBL in the region makes its reliability and its name is generally considered a name of quality and trust.(Bank Square Branch. Certain factors are already attached with the name of HBL. The better financial position has opened the way for access to capital markets. the opportunities that it can exploit and the threats it faces from competitors. It is the oldest & first bank in Pakistan as well.2.  ECONOMIES OF SCALE The merger with SCB has alleviated the financial position of the bank. Mingora. Internship Report on Habib Bank Ltd. the weaknesses that are a part of it.2 SWOT ANALYSIS The SWOT analysis comprise of the strengths it has. In Pakistan it has a 1424 branches network. Mingora.

 HUMAN RESOURCE MANAGEMENT HBL believes in hiring active and inspired candidate. medical facilities etc. Experience is not an important requirement for recruitment. Staff members or customers who want to smoke may go out of the bank’s vicinity.(Bank Square Branch. This performance appraisal report determines their promotions and endorsements. criteria for selection of employee are MBA.68  OUTLOOK The outlook of an organization plays important role in portraying its image to customers. Most of the applicants want to join HBL because of the rewarding salary structure of the Bank. so as to provide customer and staff with better working condition in every climate. The HBL Bank Square Branch. Mingora) . At HBL Bank Square Branch. All the staff members are supposed to reach the bank at the specified time. The HBL pays satisfying salaries to its employees with many other incentives like house loans. The atmosphere is professional.MPA or any other related degree from reputed universities. The qualification. most of the management have communication skills in local as well as foreign languages. Internship Report on Habib Bank Ltd. The performance appraisal of the employees is a regular feature of the HBL. The interior of the bank gives a neat look. The timings of the bank are strictly observed by the staff. Being punctual is a normal practice at HBL. It is centrally heated and air conditioned. The performance appraisal report is sent to the Karachi Head Office regularly.Mingora has a well built and decked building. The HBL attracts qualified pool of applicants by offering a superior salary to their staff.Mingora. More over the main hall and departments are all announced as no smoking zones.

The bank has been provided with new branded DELL computers lately. HBL has tried its best to introduce new technologies for the betterment of its customer services.(Bank Square Branch.It offers various kinds of accounts with varying features and interest rates. The Auto Loans section of the bank provide loans for buying different kind of cars. It allows customers to withdraw money from their accounts round the clock for 24 hours. From small accounts to large accounts the profit increases gradually. products and services suiting best to their life style. Its Master card and VISA card also give privileges to its customers.000 outlets in Pakistan and over 18 million VISA establishments around the world HBL VISA can be a handy card in buying anything. Recently the launch of Auto Loans department has attracted a number of customers. With more than 10. All the work is done by the employees on computers. etc. who want to buy new cars. which has its effect on their Internship Report on Habib Bank Ltd. In Pakistan. Maintain the foreign currency accounts is another factor that attracts customers who wants to make transactions in dollars or pounds or deutschemark. In order to get benefit of being in touch with the latest technologies.  HANDSOME STIPEND Internees at HBL are paid a handsome stipend per week.  NEW TECHNOLOGY The bank has attention and sensitively to competition prevailing in the country. HBL ATM is also a valuable service.69  SERIES OF PRODUCTS HBL practice the introduction of new products for its customers to suit their needs. The bank emphasis on consumer banking by providing them with innovative savings scheme. where banking is still done on archaic methods. It has made all the branches of the HBL online which means that they are interconnected with each other and in full coordination. Mingora) . Therefore. They normally are provided with support and encouragement.

70 performance.  HOSTILE EMPLOYEE RELATIONSHIP Internship Report on Habib Bank Ltd. These weaknesses points out the potential areas of improvements and make the organizational behavior intelligent. Thus employees face the condition of being called inefficient at times. This problem is explained in detail in the later part of the report. This overburdens the employees which leads to frustration and anger. Evaluation is made on the basis of the achievements of market targets. Mingora) . provoking several other problems. 5.(Bank Square Branch.2 WEAKNESSES Weaknesses. A cumulative effort to overcome these flaws makes success possible. The stipend is regularly given to the internees on every weekend. During the internship period the weaknesses that generally surfaced and were visible at HBL Bank Square Branch. Mingora which is normally ignored is that it is understaffed.  PERFORMANCE APPRAISAL Performance appraisal is generally considered a motivational as well as evaluative tool. Thus several departments are over loaded with extra work.2.  UNDERSTAFFED DEPARTMENTS The root problem at HBL Bank Square Branch. At HBL its use is normally made in an exploiting fashion. It motivates the internees to work efficiently because they know that they would be appreciated and paid for their efforts. like strengths are a part of almost every organization. Mingora are as described below in detail. This is an annoying factor for some of the employees which leads towards de motivation and anxiety. Unfortunately the market targets are always unachievable.

This factor is generally boosted by the extra load of work that some departments faces. Back biting is a normal and well practiced art.71 A pleasant operational atmosphere develops the efficiency of the staff and also boost the employees motivation. The organizational structure of the bank has ranked the officers in similar rankings. Mingora employees are not in good relations with each other. Although the employees at the bank are educated. Although there is a firm criteria designed for the employee development program at HBL but sometimes its not carried out soundly. Thus they find themselves in vagueness and uncertainty about job requirements sometimes. Employees are not completely aware of the kind of activities the bank might expect them to perform in the future. Other than this there are several additional prominent grounds for these reduced relationships. which are discussed below. The promotion of many officers of Bank Square Branch. So whenever there is a chance of promotion. the skills of employees are polished for the future job requirements of the organization. which in itself needs a change. Most of the employees have their pros and cons kind of colleagues in the staff.Mingora is delayed because of the impractical tasks given to the employees. but there are situations where they do not Internship Report on Habib Bank Ltd.  Promotion The employees of the bank consider their future vague due to uncertain promotion forecasts. Unfortunately at HBL Bank Square Branch.  Employee Development Through employee development. The burden of work escalates the tension of the staff members. The promotion is mainly based on the performance appraisal. This also give rise to bad mood and irrational behavior amongst the employees with each other. the competitive environment generally ends up giving birth to new hostilities among the employees. Mingora) .(Bank Square Branch.

It works on the principle which says. the bank applies the status policies intensely. “customer is sometimes right”.  CASH COUNTER QUEUES Internship Report on Habib Bank Ltd.Mingora is unbalanced. This practice is hurting the image of the bank. Customers at HBL are occasionally neglected. Clientele with small deposits are not given proper attention and consideration. This presents a dire impression in front of the clients.  UNFAIR ALLOCATION OF WORK Work distribution at HBL Bank Square Branch. Stationary. Phone lines are kept busy due to personal chats and irregular absence from the seats is experimented. The upper class clients with large deposits are shown good behavior and courteousness. Secondly. However it appears that HBL Bank Square Branch. On the other hand lending department had comparatively a small amount of work. Last but not the least the bank employees show irresponsible behavior while making use of bank resources at times. Mingora has an action logo of its own. The unprofessional attitude shown by some staff members leaves a number of customers angry.(Bank Square Branch. for example is wasted in abundance. Queries by patrons are not entertained often.72 understand some terminologies or procedures related to banking. This discriminatory behavior of employees is surely objectionable. Mingora) .  CARELESS ATTITUDE Business organizations generally acts on the formula of “customer is always right”. Over burdening some employees creates resentment in their hearts for their fellow employees with less work. Some departments like remittance department used to be under extra load of work.

Mingora several policies which have the capacity of improvements. Mingora) . More refined strategies if adopted will raise the bank’s outlook and will polish its image. Some of them are described below. It is quite a shocking view for a new visitor who enters the bank. and termed them an imposition by the upper management.73 Long queues at cash counter is a regular sight at HBL Bank Square Branch. Mingora during the first section of banking hours. Often the bank employees use to complain about the inconsiderate nature of the decisions which they considered thoughtless. This would normally create confusion between the customers and the staff.  Internees Selection Process Internship Report on Habib Bank Ltd. Other than this the bank charges for making drafts were high too. The mild tone of some employees at times detracts customers from the charges of services offered and when the customer comes to know about their account being credited.  WEAK POLICIES HBL Bank Square Branch. Occasionally the employees were just informed about their new tasks and targets.(Bank Square Branch. Most of the VISA Card members who did not had an account in HBL were not aware of the fact that they are charged 100 rupees for each transaction they make.  Concealed Expenses HBL charges its customer for various services provide. Several accounts holders accounts with low balances were closed at the cutover with any prior notice to them. This presents and unsophisticated look.  Non Participative Decision Making It was observed that the top management made one-sided decisions. they gets distressed.

Secondly. The bank have its claims that all the Curriculum Vitae (CV’s) of applicants are sent to Karachi Head Office and the decision is made there. which have boosted Pakistan’s economy.74 HBL claims to be an organization which offers internships purely on merit basis. Firstly. an acknowledged reference is must for an entry into HBL. there is no specific merit basis which can be termed as grounds for internship. Mingora) . In this period Pakistani nationals living in foreign are bringing money back home. picked and made use of. All that one needs for obtaining internship in HBL is an accredited reference. They are almost always a matter of time. before any body else gets up and do so. This also is a strange claim as Karachi Head Office has no measures to check the credibility of the CV’s.2. 5. Regrettably the original situation is totally different. Foreign investors are getting encouraged Internship Report on Habib Bank Ltd.  STABLE ECONOMIC CONDITION The new Govt have turned fruitful for Pakistan’s economy. This prejudiced practice does not match the reputation of HBL as it leaves competent candidates out of a chance to have an experience of working in a multinational organization.(Bank Square Branch. when exploited properly reap profits and earn success. They are to be sought. HBL also have some opportunities it can utilize and obtain good market position. The United States of America has provided Pakistan with additional loans without interest. Opportunities. Its just about being smart and accurate. more than anything is all about converting into opportunity what everybody else considers danger”.2 OPPORTUNITIES “Success. Thus the forthcoming picture seems one with economically more stable Pakistan. Also noted was the fact that no interviews are conducted from the applicants. Some of the opportunities HBL can make use of are hinted below.

futuristic. as well as can become events with grave consequences. so the investor can be attracted to the flexible policies. Every organization is faced by some category of threats in its operations and functions. HBL has to seek these opportunities and make use of them before they are no more. Mingora) . It can relax its loan strategies.  LAW AND ORDER SITUATION The government must maintain the law and order situation in order to attract foreign investor. It can mobilize its sales force and can design new marketing policies to attract new customers in a situation when people are bringing money. Several countries companies are coming to Pakistan to help the Afghan people. almost every activity that an organization do face some kind of threats. The bomb blasts in cities.(Bank Square Branch. It can provide special relaxations to NGO’s and companies of foreign countries working for the betterment of Afghan people. Opening new outlets. HBL with its reputation can take benefit out of these circumstances. just like the benefits it seeks. designing fresh marketing strategies. probable events that can occur and prove dangerous in consequences. which kills hundred of innocent people Internship Report on Habib Bank Ltd. The prevailing condition indicates the following as the possible threats. It can employ more people to target these firms and individual investors.3 THREATS Threats. 5. It can use several steps to attract domestic as well as foreign investors. It can intensify its marketing strategies. are the unseen.75 to bring money and invest it here in Pakistan. All of such activities are a matter of time. altering existing policies. HBL also faces some threats which can just prove minor assumed fears.2. bringing change in physical structure. New NGO’s are taking birth.

This will help our economy to boost up as well as it will popularize out country’s name. CITIBANK and ABN Amro Bank are already online. then how come it is possible that he will invest money here.76 creates an atmosphere fear amongst the foreigners residing in Pakistan. HBL seems to lose a number of possible foreign clients because of the uncertain law and order situation prevailing inside the country.(Bank Square Branch. Bank Alfalah propose serious threats to HBL in its auto loans market. Internship Report on Habib Bank Ltd. HBL has become online since 30th June 2000. Also working are other foreign banks like Bank Alfalah.  COMPETITORS HBL also faces competitors in the market. Various domestic banks like MCB and others have also shown improvements. These two banks also enjoys sound financial backing and comes from a rich background. To survive amongst all these competitors. HBL needs to keep in touch with modern technology. keeping flexible and customer oriented policies. If the foreign investor won’t feel safe in Pakistan. The government must take appropriate actions in this concern to make sure the safety of all foreigners residing in Pakistan. Emirates Bank and Faysal Bank. Incidents like these enormously affect the economies of countries. Mingora) . and adopting the latest trends of banking.

N. Mingora) . Business Thoughts. ”.P.77 References Jain. (1995). New Delhi: Shri Jainendra Press Internship Report on Habib Bank Ltd.(Bank Square Branch.

Internship Report on Habib Bank Ltd. For the confiscation of these errors.78 CHAPTER 6 RECOMMENDATIONS “Advice is seldom welcome. These models are proposed to facilitate organizations control waiting lines. The bank should use the marketing approach and customer satisfaction should be taken into account. Recommendations suggest improvements in areas which have room for polishing and progress. 6. The number of checkouts should balance personnel cost and customer waiting time. certain recommendations are forwarded. Through this approach. Mingora does not mean that these aspects are permanent flaws of the branch. and those who want it the most always like it the least”. Criticizing several factors at HBL Bank Square Branch.2 CUSTOMER – ORIENTED ATTITUDE The bank staff should be properly educated about the customers value. Being courteous does not cost anything instead it makes one more human. The bank staff should be courteous to all customers.1 QUEUING MODELS FOR CASH COUNTERS The long queues at cash counter gives an awkward look. The bank’s staff should be courteous with everyone regardless of the volume of their deposits. the bank can decide the best possible number of checkout stands. Mingora) . This problem can be solved by using the Queuing Model concept.(Bank Square Branch. A customer is fascinated and brings other customers also to the bank if the service is efficient and courteous. it is intended that these mistakes be removed. 6. Instead. There should be no status discrimination between customers.

The staff should politely tell the customers to be seated till their work is ready. there are some who still need a good training program.5 TRAINING AND DEVELOPMENT PROGRAM The HBL claims of training and educating its employees but practically speaking it should initiate a good employee training and development plan. Mingora) . This would develop the proficiency. Thus they can work in harmony and collaboration with each other. Although the bank provide on – the – job training as well as orientation training to its employees. This also helps in avoiding monotony of performing the same job again and again.(Bank Square Branch. They should be presented with focused technical functions and banking knowledge .4 EDUCATION The bank have some senior employees who have a great deal of knowledge of the banking field but there are some staff members who needs to be educated about the delicacy of certain matters.79 6. Often it was visible that during peak banking hours many customers use to stand anywhere they wanted to. This would ease the job of the employees as well as clients won’t bear the pain of being standing still and waiting. This created stress for the employees as well as other customers waiting for their job getting done. hence they can become aware of the mutual requirements and importance of the coordination between the different departments of the bank. which can directly educate them specifically about the bank policies and operations. 6. The employees can be given chance to serve in different departments. This would help employees to know more about their specific job and its actual requirements. This would also be a Internship Report on Habib Bank Ltd. should be provided with proper seating arrangements.3 PROPER SEATING ARRANGEMENT Customers. waiting for their turns. A specific place should be reserved for the customers by placing chairs there. insight and administrative capabilities of the employees. 6.

New upper management comes and no one from the bank is promoted to the managers post. This will enhance their working abilities and they will also feel more secured and safe. 6. 6. The staff remains where they started from. If targets which are practical are given to employees and any bonus or reward is announced on the achievements. The rotation would provide them all with equal chances of serving in same kind of working conditions.8 MARKET SEGMENTATION The general target market of HBL is the upper class of the society. The sales force is often busy in looking at probable clients with large amount of money.(Bank Square Branch.7 PROMOTION An established performance appraisal system would automatically open the doors for the promotion of employees. Giving unachievable tasks to employees discourages them and they don’t strive for the achievements of those tasks. It can be possible only then that the employees will take their performance appraisal serious and would yearn for betterment. Mingora) . 6. Proper system. At HBL it was generally observed that some employees used to complain that no promotions are given. Secondly the promotions in the so called performance appraisal system are based on the achievements of impractical targets. It can Internship Report on Habib Bank Ltd. this would greatly influence the performance of employees. which creates frustration and anxiety amongst the employees.6 PERFORMANCE APPRAISAL The practice of performance appraisal should be made a serious and mature process which can identify an employees potential accurately. practical targets and promotions jointly can be used as motivational tools for the employees.80 factor of motivation for the employees who works in over loaded departments.

Bank should revise its policies on charges for services it provides. resulting in the ending of the confusions about work and responsibilities. the high balance requirements and high service charges. This will result in more satisfied and trustworthy relationship between clients and employees.81 also prove costly when sometimes another potential customers gets deviated because of the less attention paid to him. 6.11 FAIR INTERNEE SELECTION PROGRAM Internship Report on Habib Bank Ltd. It would result in the feeling of equity amongst members. It would also give a feeling of own ness and security to the workforce of being very much a part of the bank.(Bank Square Branch.10 FRIENDLY UPPER MANAGEMENT The upper management should keep friendly relations with all the staff members. 6. So that they can make arguments about their status of work after accepting the new responsibilities. This provoked severe resentment amongst the employees for each other. 6. It was observed at HBL that the upper management favored some staff members and used them for spying purposes against other members. Also concentration in one market segment bears high risk and can lead to huge losses if a deposit is withdrawn.9 EQUITY CONCEPT All the departments should be given with an equivalent load of work This would result in a friendly relation between employees as well as it will boost the coordination between different departments. Most of the potential customers cannot fulfill. The bank should also offer some products for potential customers with comparatively low-income level. Mingora) . Another suggestion would be that the staff should be involved in the decision making process. This would also clarify the issue between staff members and responsibilities and authorities will be properly delegated.

HBL also give internship generally for six weeks and for the maximum of eight weeks. and when he can be more useful than ever. Bank administration should give proper training to the internees. the applicants should be interviewed locally in the branch on some specific date. That would need some building construction on the upper floor. The employees of the specified department grumbled against this. it will help HBL in taking much use of internees it trains for work. If HBL increases its internship period for a quota of seats.82 A fair internees selection system should be established for selection of internees.(Bank Square Branch. A proper. Thus during the six or eights weeks duration when an internee gets some know how about the banks operation. Mingora) .13 EDIFICE CONSTRUCTION Some departments like the Auto Loans department was not given enough space in the bank’s vicinity. well-decorated office should be provided to the Auto Loans staff. A room that previously was used for photocopying was given to the Auto Loans personnel. Internship Report on Habib Bank Ltd. A prayer room should also be constructed on the upper floor along with offices for the staff members who don’t find office for themselves. his time completes. This is a problem for HBL itself. Those staff members who want to offer their prayers face difficulty in doing so because there is no specific place for the officers to pray. The rest of the officers also spend most of their time at the bank. 6. he is asked to leave. Aptitude and competence of the candidates should be considered and there should be merit for selection instead of their references. Instead of sending CV’s to Karachi Head Office. They should educate them about the purpose of all the functions they perform.

New Delhi: Shri Jainendra Press Internship Report on Habib Bank Ltd.(Bank Square Branch. (1995). Jain. N. Mingora) . Business Thoughts. ”.83 References 1.P.

Mingora is generating profits and is targeting the market efficiently with its energetic young sales force. The place for improvement in the bank is inside. competent and proficient customer service specifically at the counters and down the line in an organization shows its benefit and compensation later. Its location at the centre of business sector in Swat is also adding to its easy accessibility by customers. It was observed that some employees used to complain openly about the extra load of work. This leads towards errors and irregularities in their work. Thus the outlook requirements of the bank are almost complete. Several employees. Mingora) . It has enough vacant room for new employees. The underlying problem of several other problems that was observed during the internship period. Internship Report on Habib Bank Ltd. was that HBL Bank Square Branch. Some of the tasks would not even complete even still working for 4 hours after the bank working hours had ended. 7.1 OVER LOADED STAFF The under staffing directs to unfair work distribution. gets load of work which is beyond their capacity.2 POOR CUSTOMER SERVICE Efficient. The implications of these suggestions are more important. The situation that was taking shape of this inability is as follows: 7. so that their burden can be shared. Mingora is and “understaffed” bank. HBL Bank Square Branch. They very clearly wanted assistance in their work.(Bank Square Branch. This hitch is the root cause of many other problems.84 CHAPTER 7 IMPLEMENTATION PLAN Analyzing the bank’s performance in several departments and evaluating the strengths and weaknesses leads to some proposals.

As discussed earlier back biting was a very normal practice at HBL Bank Square Branch. Mingora.85 The understaffed situation at HBL Bank Square Branch.(Bank Square Branch. The whole atmosphere would some time seem of uncertainty and ambiguity. 7. Customers would not be listened with concentration and modesty. This would root out the above-mentioned problems. like filling fresh accounts form. Ultimately it was giving rise to the poor customer service. Mingora led the employees to adopt aggressive attitude with clients. It was visible that often some customers would roam around with deposits.3 SEVERE TIES BETWEEN EMPLOYEES The understaffing was also the major reason for the acrimonious relations between the bank employees themselves. they wanted to get filled properly. Certain queries would not be entertained because the staff would all the times be worried about their own work and would not take time to attend and guide the customers friendly. which did not allow the employees to indulge in un necessary talking. Understaffing was the major reason of this because most of the conflicts that arose would relate to the work of employees. This was a grave problem that was taking its roots deep inside the bank environment. cash or VISA payment slips. Over burdened employees would always seek chances to avert responsibilities and hold somebody else accountable for any mistake that would have occurred. that customer would wait for assistance which they would rarely get. This basic reason behind this was the extra load of work. Mingora) .4 CONCLUSION Considering the prevailing circumstances at HBL Bank Square Branch. Mingora and taking a broad overview of the possible solution. 7. one would surely come up with the idea of employing fresh energetic workers. Additionally an employee in the cash department would lessen the burden of the already working tellers as well as it would help in Internship Report on Habib Bank Ltd. It was also noticed during the handling of other customers.

several measures can be taken into account to deal with this problem. Internship Report on Habib Bank Ltd. 7. Mingora but that normally was an inexperienced internee who.1 SHORT TERM PLAN The short term plan is devised for employees who would be given the chance to serve in the bank for a limited period. At the maximum this duration stretches to 8 weeks.  Longer Duration Internship Program The bank normally offers a 6 weeks internship program. Thus if an experienced and well-educated employee is given the responsibility. There are two plans which are suggested for dealing for this problem. that would help both the customers as well as the colleagues.86 the reduction of long queues at the cash counter. During this period the employees of the bank helps the internees to understand various procedures regarding different departments. instead of providing true help. Mingora) . Both are described in detail below. the understaffing.5.5 IMPLEMENTATION PLAN Thus now when the basic area of problem is identified. would waist the time of customer as well as add more to the work of other members of staff. Thus the help desk. Although help desk was maintained at HBL Bank Square Branch.(Bank Square Branch. Short Term Plan Long Term Plan The two plans devised will be effective in results and they both match the banks image and perspective of banking. 7. A member at remittance department would surely prove helpful as to share the workload of the already overstrained staff. This can be done in the following two methods. most of the time instead of helping would just direct the questioner to another department.

thus HBL can be helpful in developing the youth into a positive direction as well. A specific date can be set for interviews and the applicants may be chosen on merit. The bank can set a particular quota for a long internship duration. this will build many people’s career in good organizations. Mingora) . To keep the normal internees unaffected. More customer devoted staff will improve the bank’s image also. they would prove useful because after the initial 2 months period the applicant will be aware of the banks policies . If the worker shows extraordinary performance. They can be paid the internees stipend and the main purpose of these internees would be to achieve experience and recommendation.(Bank Square Branch. Thus they can prove economical workers for the bank. The selection can be made in the local branches. The bank can make a promise that at the end of the program it can give a recommendation report about the applicant. Internship Report on Habib Bank Ltd. So at a time when an internee learns most of the jobs and can prove more beneficial to the bank than before. Many graduates after the completion of their degree roam around and wander uselessly. Since the name of HBL already means quality. He will also be more devoted towards the customers. it can reserve a special quota for these kinds of long duration internees. The bank will benefit in the shape of obtaining a motivated and energetic employee and that also at a lesser cost than the normal employees. The bank can introduce a long internship program for its own benefit as well as these graduates. Most of the organization requires earlier experience in the field. hence they can taken as internees. he is supposed to leave. to win their recommendations and sympathies. The bank can offer a six months or a year internship program. To get good recommendation on this kind of a report the applicant will be motivated and will work hard.87 After the coaching and teaching of these 6 or 8 weeks the internee is able to comprehend most of the functions of the bank and he or she is able to follow the appropriate procedures which is to be followed for the completion of that function. he can be of great use to the bank. This will help him in getting experience as well knowledge about the delicacies of practical job. The cost would be less because since these would be fresh graduates seeking experience and recommendation. not salary.

able.5. it can exercise the liberty to ask them to leave. As they will be on contract basis. who can work hard and share the responsibilities of the other workers. This program will include other banks personnel as well as experienced people. energetic and capable employees to the bank. Mingora) . If the bank wants to be careful in choosing a better lot among the pool of candidates for its operations. so that they can prove beneficial to the bank in future. However. after the completion of the contract period wants them to leave. This can be a sort of brain drain technique that the bank can use. Contracts seats will be for applicants who will be employed on contract basis. Now the question arise that how can he be of any use to solve the problem of understaffing. This will bring experienced. Internship Report on Habib Bank Ltd. This program would include picking up the most competent employee amongst the employee and sending him for further training and higher studies about the bank policies. This program will be different than the long internship program as the above program will be just meant for fresh graduates and new applicants who will get recommendation and will be paid the internees stipend. it can offer contract seats.88 the bank can also take him as a permanent employee. Or if the bank considers them worthy and wants to take use of their expertise. full salary will be paid to contract workers. it can reassign them some job as well.(Bank Square Branch.2 LONG TERM PLAN The long term plan would be designed for the permanent employees of the bank. the bank will find it easier to decide about him. Since his last one years performance and his attitude towards fellow colleagues and customers will be proofs of his ability or inability. experienced and motivated employee can handle the job of several persons. The answer is that a more efficient. 7. so if the bank.  Contract Workers The bank can also employ contract workers also. The bank can make the selection amongst the employees on the basis of the performance the employees show and on achieving targets.

(Bank Square Branch. The bank will bear all the expenses that are to be made during the training program. thus he will be send for a period of time to get training and education. This will help him in dealings in future. thus he would work in other branches too and would understand the inner environment of the branches. Also will it produce a competitive and healthy environment.89 When a selection about an employee is made. whose expertise will valuable to the bank. This practice will create a more motivated. The long-term plan would surely cost a little. Similarly the contract workers can be experienced workers. His appointment is to be made rotational. Hence his expertise would replace any additional employee place. He would be taught specifically the policies about the bank. The above plan if implemented can produce better results for the bank. This kind of training program would enable the employee to understand the whole banking structure precisely. This indirectly will replace the expenses. Mingora) . More emphasis is to be given to the sensitivities and delicacies involved in the operations of different functions. but the bank can reap its fruitful benefits in the long run. Internship Report on Habib Bank Ltd. the broader goal the bank want to achieve and the ways of cumulative efforts that are required. The shortterm plan would save the bank from unnecessary costs. efficient and skillful staff. The long internship program is economical as well as beneficial. he can be of great use as his expertise on many issues will be authentic and accurate. When returned to the branch. The employee in return is to be made bound to stay with the bank for over a period of time. the bank has endured during the training and development program. A skilful employee would be more efficient and productive. and he will work in.

90 PERSONS INTERVIEWED Name of Organization Designation Name of Person Habib Bank Limited Officer Autoloans Mr Department Shah Jehan Officer Remittance (senior) Mr Department Sher Bahader Officer Sales Mr Department Wasim Jan Habib Bank Limited Habib Bank Limited Date August 12 2005 August 24 2005 Internship Report on Habib Bank Ltd.(Bank Square Branch. Mingora) July 18 2005 .

(1996). Third Edition. (2000). Lahore: Pakistan Kitab Markaz. Internship Report on Habib Bank Ltd.standardchareted. Scott A.http://www. Thomas S.http://www. Department of Public Administration. (on-line). Nadia. (on-line).standardchartedgrindlays. and Snell.. Section 1999. A Case Study Of Peshawar Branch”. Inc. Times Mirror Higher Education Group. (on-line). Gul. Prof.grindlays. James C. HABIB BANK LIMITED. IMS. Nasir. Brochures. Annual Balance Sheet. (1998). Available.http://www. Irwin.MINGORA. John M. Available.pcglobal.com. Available. (2000). Van Horne. BANK SQUARE BRANCH. Inc. “ANZ – Grindlays Bank. Banking Currency and Finance”. and Wachowicz. Amber. Tenth Edition. Jr.(Bank Square Branch. Naz. Department of Public Administration. Management Building Competitive Advantage.com.MINGORA. Mingora) .. BANK SQUARE BRANCH.com. M. IMS.91 BIBLIOGRPAHY Bateman. “Internship Report on HABIB BANK LIMITED”.. USA: Prentice Hall.com.http://www. (1998). Fundamentals of Financial Management. HABIB BANK LIMITED. (on-line). Section 1998. Available. USA: Richard D. Saeed.