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INTRODUCTION

ACCORDING TO BANKING COMPANIES ORDINANCE 1962

“Banking means the accepting, for the purpose of lending, or


investment, of deposits of money from the public, repayable on
demand or otherwise, and withdraw able by cheque, draft, order or
otherwise.”

“Banking companies mean companies which transact the business of


banking in Pakistan.”

COMMERCIAL BANK

“The commercial bank receives surplus money from the public and
lend to others who needs funds. Bank collects cheque, bills of
exchange etc from customers. It transfers money from one place to
another. It provides agency and general utility services. Purpose of
commercial bank is to earn profit.”

HISTORY OF ASKARI COMMERCIAL BANK

The banking sector has witnessed a dramatic change during the


last ten years with the development of Askari Bank, which is not only
redefining priorities and focus of the banks, but also threatening the
domination of traditional players.
The story begins with the incorporation of Askari Commercial
Bank limited in Pakistan on October 09, 1991, Askari Bank
Commenced (begin) to operations in April 1992, as a public limited
company. The bank is listed on the Karachi, Lahore and Islamabad
Stock Exchanges and the initial public offering was over subscribed by
16 times.
While capturing the target market share amongst the view
banks, Askari has provided good value to its shareholders. Its share
price has remained approximately 12% higher than the average share
price of quoted banks during the last four years.

Askari Bank has expanded into a nation wide presence of 83


Branches, and an Offshore Banking Unit in Bahrain. A shared network
of over 800 online ATMs covering all major cities in Pakistan supports
the delivery channels for customer service. As on December 31, 2004,
the Bank had equity of Rs. 6.016 billion and total assets of Rs.
107.168 billion, with over 475,000 banking customers, serviced by a
total staff of 2,118.

Askari Bank is the only bank with its operational head office in
the twin cities of Rawalpindi-Islamabad, which have relatively limited
opportunities as compared to Karachi and Lahore. This created its own
challenges and opportunities, and forced as to evolve an outward-
looking strategy in terms of Askari market emphasis. As a result,
Askari developed a geographically diversified assets base instead of a
concentration and heavy reliance on business in the major commercial
centers of Karachi and Lahore, where most other banks have their
operational Head offices.

MOTIVATION OF ASKARI COMMERCIAL BANK

While successfully penetrating the key domestic markets through


strategic expansion and business diversification they remain alive to
the challenge emanating from the development in the global financial
markets; the opportunities and threats engendered by greater
deregulation and increased customer expectations. These provide
them the impetus (moment) to make the best use of available
resources, including modern technologies, to meet the challenges
ahead.
Historically, Askari’s core marketing focus for its asset base has
been the middle and upper middle business houses (including
wholesalers and manufacturers) operating in the large urban centers
of Pakistan, which are primarily oriented towards foreign trade. This
segment constitutes significant revenues to the bank. The liability side
remains focused on the middle and upper middle class retired and
serving government and armed forces personal and mid-size business
houses.
Their corporate banking division was established in April 1999
with the primary focus on servicing large corporate and multi-national
companies (MNCs). Benefiting from the bank’s growing balance sheet
size, this division B now gaining momentum and their long-term aim D
to develop it into an independent.
Strategic business unit (SBU)… This would the bank to acquire,
develop and specialized abilities, and enhance their focus on serving
the emerging needs of the corporate clients.
With this branch network of 75 and further expected increase in
future, the ATM’s facility and internet Banking, Askari Bank’s reach is
ever increasing. In recognition of this reach, they have set up a retail-
banking group in July 2000, the mobile ATM’s facility is first time
started by Askari commercial bank in 2005 dedicated to serving the
urban consumer market; Askari is committed to aggressively market
this segment. The strategy is to provide their customers with a basket
of innovative products to meet their varying needs.

Askari Commercial Bank is the only Private Sector bank that has been
approved by the World Bank as a Participating Financial Institution for
the US$ 200 million Line of Credit sanctioned (authorized) to the
Government of Pakistan for the Financial Sector Deepening and
Intermediation Project.

Askari's emphasis on further broadening its core foreign trade business


translated into handling a higher volume of Export and Import
business of Rs. 36 billion registering a growth of 42% over the
pervious year. This enhanced foreign trade business was secured due
to excellent customer services and efficient international settlement
arrangements with our correspondent banks.
Askari Bank is operating throughout Pakistan. Most of the branches are
connected through our State of the Art, On-line Communications
Network, which gives the bank a competitive edge in providing instant
services to its clientele. We also offer direct access to the latest
Foreign Exchange Rates through our Online Communications.

FIELD OF ACTIVITIES

THE BANK BASICALLY WORKS UNDER THREE GROUPS NAMED AS


10 Corporate banking and financial institutions group
11 Retail banking group
12 Operations and credit group.

1-CORPORATE BANKING AND FINANCIAL INSTITUTION


GROUP
This Group is responsible for serving the needs of large corporate
clients in public and private sector, managing correspondent banking
relationships and undertaking money market transactions. The Group
is organized in three divisions namely
13 Corporate and Merchant Banking Division,
14 International Division
15 And Treasury.

CORPORATE AND MERCHANT BANKING DIVISION


This Division is engaged in provision of financing facilities to large
corporate clients including multinationals. Principal activities include
syndicated loans, guarantees, and working capital finance,
underwriting and advisory services. The Division has played an
important role in providing development finance for the modernization
and expansion of the country's core industries. Credit risk is well
diversified with exposures in sectors like fuel & energy, chemicals,
textiles and fertilizers. Three units have been set-up at Karachi, Lahore
and Rawalpindi for sales and operations, which are supported by
centralized marketing from the Head Office.

INTERNATIONAL DIVISION
Mainly responsible for managing correspondent banking relationships
and planning overseas operations, the Division plays a vital role in
extending foreign trade transactions support to the branches. The
Bank became a member of SWIFT in the Year 2000 and is also a
contributor to the equity of Pakistan Export Finance Guarantee Agency
Ltd With a network of 167 correspondents spread over 95 countries
worldwide, the Bank continued to reinforce its leadership position in
trade finance, transacting business of over Rs. 70 billion, during this
year. Through the concerted efforts of this Division, we are a
participating Bank under the "Pakistan Trade Enhancement.
Facility" of the International Finance Corporation, and our customers
are entitled to avail of the "Political Risk Guarantees Scheme"
extended by the Asian Development Bank.

TREASURY
Responsible for managing Bank’s liquidity and foreign exchange
transactions, our Treasury in one of the most active in the market.
Through reported transactions, purchase of Government paper and
foreign exchange trading, the Division adds substantially to the Bank's
sustained earnings.

2-RETAIL BANKING GROUP

Retail banking group was formed in 2000, this group is responsible for
serving the needs of the retail market. Focusing on individual
consumers and small and medium size enterprises, for purpose of
product differentiation, the group is managed in three business arms.
16 Investments products unit,
17 Asset products unit,
18 And the credit cards division.
INVESTMENT PRODUCTS UNIT
Responsible for developing and managing brands which serve the
investment needs of the consumer market, this unit focuses on deposit
mobilization, provision of value added services based on modern
technology and undertaking the centralized marketing and advertising
for the Bank. This unit is also actively involved in the acquisition
business and has signed-up over 300 merchants nation-wide which
offers shopping discounts to the Bank's Privilege Card members.

Askari Bank's Value Plus is a unique deposits account, which offers


handsome monthly profits, accidental insurance cover, partial liquidity
on all time deposits and free Privilege Card membership. The Unit is
also administering the sales and distribution, including arrangement
for strategic partnership alliances for Askari- i-Net Banking, the first
internet banking in Pakistan, which allows routine banking transactions
from any where in the World, round the clock, over the internet.

ASSET PRODUCTS UNIT


This Unit is engaged in the development and management of retail
credit schemes. The consumer market in Pakistan has not only grows
exponentially over the last decade or so, but the needs of this segment
have become extremely diverse. In order to sustain competition, it is
but imperative to continue offering innovative consumer credit
schemes. With the launch of Askari Bank's Personal Finance an Askar
(auto-loans), this unit is emerging as a significant contributor to the
Bank's loan growth. The unit also administers the first e-commerce
banking solution in Pakistan, under the brand name ASK-IBL online.
This is a b2b automated credit transaction module, offering
merchandise credit to retailers on goods purchased form one of the
largest distributors n the country. Strong collection and prudent risk
management policies have restricted delinquencies to very low levels.

CREDIT CARDS DIVISION


This Division manages Askari Master Card brand and is headquartered
at Karachi. With a new fully automated transaction processing system,
the brand was re-launched in 2001, supported by an aggressive
advertising campaign and strong sales team network. The product now
has portfolio of nearly 20,000 cards, in less than one year. The brand
is accepted worldwide and over 3,000 locations in Pakistan.

3- OPERATIONS AND CREDIT GROUP

A support function group mainly responsible for development of


systems and procedures, process re-engineering, automation and
credit management. The group is organized in three divisions,

19 System and operations division


20 Electronic technology divisions
21 And the credit division

SYSTEM AND OPERATIONS DIVISIONS


This group has been instrumental in development of procedures and
manuals for various operating requirements of the bank. After careful
mapping of the existing process flows, the division recommends
automation and re-engineering requirements. To improve transaction
efficiencies. The division is active in providing equipment procurement
support and development of new branches. The protection of fixed
assets of the bank is also managed by the by this division, as directs
function. During year 2001, the division has proposed several cost
cutting initiatives based upon improvement of our existing procedures
and documentation reduction. Seven new branches have been opened
during this year. The division successfully implements the model
branch concept during 2001, which has been proved to be a milestone
towards improving our customer service standards and achieving
process uniformity with optimum resource utilization.

ELECTRONIC TECHNOLOGY DIVISION


This division operates as the backbone for all operational functions in
the bank. Responsible primarily for the development of banking
software and provision of computer hardware to all business units, the
division also engaged in the development of technology based value
added customer service products. The division has helped the bank in
playing the pioneering role in offering Internet banking service e-
commerce solution and on-line banking. The division provides online
real time branch connectivity and has full-automated transaction
processing support programmers in the place. The division is focusing
on use of data-warehousing technology to enhance the relationship
management program of the bank.

CREDIT DIVISION
Providing extensive support to branches for credit administration,
control and monitoring, the division has played a pivotal role in helping
the bank achieve a remarkable loan
Growth of 31%, with well diversified risk exposures. Most of the loans
are of shot -term trade financing on a secure and self-liquidating basis.
The division has a special assert management team, which is
responsible for ensuring low ratio of bad debts, effective monitoring of
delinquent advances and close follow-up of recoveries. Bank's head
office credit committee, reviews the credit quality and pricing on
regular basis not only to ensure healthy credit growth but also the
management of bank's risk assets in almost prudent and profitable
manner

Taking into account the expanding branch network and the increasing
customer base, credit administration was strengthened by
decentralizing the delegation of lending authorities at the regional and
area management level.

The decentralization has benefited the bank and its customer


tremendously as the new arrangements now provide for faster credit
delivery, focused credit development, and more effective monitoring
and controls. Further steps are being taken to streamline credit
appraisal procedures and training to credit officers at all levels.

HUMAN RESOURCE DIVISION


Strategically, perhaps the most important division at the head office is
responsible for human resource management, including recruitment
staff training and evaluation. The division also handles matters relating
to administration. This division operates on future oriented strategy
focusing on employee’s personal and professional growth.

Staff development activities are geared to enhance their capabilities


for applying the knowledge and facts towards development of practical
situations. Under our human resource management policy, we develop
and groom our management personal for positions of greater
responsibilities analytical, interpersonal, conceptualized and specialized
skills to enable them understand cause-and-effect relationships and to
think logically.

Staff is given on the-the -job as off-site training in diverse areas of


banking and management. Our hiring philosophy is based upon
meritocracy and selecting the right person for the right job. We lay
greater emphasis on employee’s honesty and integrity besides
technical competence. Candidates are selected through well defined
and systematic selection procedure.

FINANCE DIVISION
Responsible for bookkeeping and accounts, this division at head office,
prepare all financial return and the MIS through its management-
reporting wing. The division is actively involved in preparing market
comparative analysis, consolidation of bank's budgets, its monitoring
and constant review of various financial indicators.

Finance division works as the backbone for the bank's operations. The
division, which reports directly to the president and chief executive of
the bank, has been instrumental in preparation of banks business
plans and future strategies. The budgetary performance are constantly
reviewed and through a sophisticated " monthly performance report”
which is a computer based program, the division provides feed back to
the senior on strategic issue like reasons for budgetary variance and
methods to arrest negative performance factors.
Preparing the bank's annual accounts and coordinating external audit
is also a direct function of the finance division. Through the dedicated
efforts of staff at this division, the bank has been winning various
awards foe the best presentation of the annual accounts and also the
management has also been able to monitor and review the bank's
performance in proactive manner.

AUDIT DIVISION
The audit division reports directly to the board through the executive
committee, which is also the audit committee. The audit division is
completely independent of the management and is responsible for
checking and reporting on the management compliance with the
boards policies and directives, as also the prudential regulations and
other directives of the SBP. However their role is not intended to just
that of fault finding; but also guiding and assisting branches in
improving their operations.

The division is responsible for evaluating every aspect of the bank's


operations with the goal of improving the effectiveness of risk
management and internal control. There is also a regional audit
function attached to each area office; the nature of this business is of
more quality assurance rather than strictly audit. The regional audit
report to the area manager, and assist them in ensuring that there is
proper compliance with all the relative directives, and also that
customer service standards are maintained and improved, at the
branches in the area.

The system of regional and area offices has been introduced since
1999 for effective supervision and control of branches. The scope of
the system also spans the development and management of bank's
business and activities, on a regional basis.

The bank's branch network has been divided into 6 regions:

22 North region
23 Comparison of Islamabad and Rawalpindi area and the north
area.
24 Central region
25 Comprising of Lahore and East area.
26 South region: and
27 West region

A process of effective decentralization has been implemented, with


delegation of authority and greater responsibility and accountability.
Under this system the regional heads have the primary responsibility
for business development, profitability productivity, operational
efficiency and credit quality.

The system helps the customers through quick decision-making and


fast product delivery. It has now enabled the bank to further expand
and diversify its geographical reach and business activities.

THE MISSION, VISION


&
OBJECTIVE

THE MISSION STATEMENT:

To be the leading private sector bank in Pakistan


With an international presence,
Delivering quality services
Through innovative technology
An effective resource management
In a modern and progressive organization
Culture of meritocracy, maintain
High ethical and professional standards,
With providing enhance value to all our stakeholders,
And contributing to society

VISION

To be the leading bank in the region...

CORE VALUES

The intrinsic values, which are corner stones of Askari corporate


behavior, are:

28 Commitment
29 Integrity
30 Fairness
31 Team-work
32 Service

OBJECTIVES OF THE ACBL

As Askari Bank looks ahead to the future by moving through the


decade of the 1990's its efforts are guided by a broad framework of
corporate objectives, which are as follows:
33 Askari is committed to its identity of " security & trust " and will
endure to uphold this image at al the times.
34 It will endure to provide its customers with as many creative
financial services and products, as is required. As today
customer demands a package of services suited to his particular
business, Askari plans to develop different and new products to
cater to the customer's demand. Askari bank has they strength
to be a market leader.
35 Bank will keep standing and by and develop, its human capital
base. It is planning to provide all the required training to its staff
towards achieving a higher level of professionalism. Askari will
continue striving to build a strong, motivated and dedicated work
force where total commitment will be towards customer's
satisfaction and wealthy growth of organization.
36 Askari bank will endure to provide a competitive return to its
shareholders and will strive to maximize its share value. The
enhancement in its capital and returns will be a continuous
process. Askari bank is interested in being one of the most
financially viable institutions. So it lays great emphasis on
gradual building up to a healthy deposit mix. In the years ahead,
the bank will enhance its focus on growth through operational
efficiency, creating strategic alliances developing well-structured
networking system innovating new products, enhancing
marketing and sales efforts improving customer service,
achieving greater employee motivation and providing the best
value to its stakeholders - will make it a leader in the corporate
world.

HOW CHALLENGE BE DELIVERED

These objectives and guiding mission will be achieved through


37 Focused objective
38 Winning as a team
39 Excellence in delivery
40 Relentless quality
41 Upward rising sales

MANGERIAL POLICIES
42 Financial policies
43 Procurement policies
44 Marketing policies
45 Promotional policies
46 Lending policies
47 Personal policies

FINANCIAL POLICIES
The financial policies of any bank are the most important policies
through which the whole banking activity is conducted. These policies
are primarily conducted on:
48 Source of funds
49 Use of funds

SOURCE OF FUNDS:
The bank finance policy is acquiring funds from the following sources:
50 Deposits of account holders.
51 Interest on advances and loans granted to the borrowers.
52 Income and commission from the services provided by the bank.
53 Bank open various types of accounts for its customers Services
are provided for earning.
54 Interest income and commission bank providing the services to
its customer.

USE OF FUNDS:
After the acquisition of the funds their acquisition become
necessary. The bank seeks the best way for making investment to got
more profit with the maximum security. The bank has an investment
portfolio in which it allocate its funds for crediting to borrowers,
investment in the stock market, investment in the real estate property
etc. for allocation of funds a bank has to follow some banking policies
and the prudential regulations of SBP these are:
A bank has to maintain a liquidity with central bank ,i.e. 25 %of its
total deposits.
A bank cannot invest all of its funds otherwise it will be difficult to
meet urgent needs.
A substantial part of funds is received from interest on loans and
advances. Before granting a loan the bank analyze and observe the
borrower and conduct a complete ratio analysis. Bank prepare credit
line for this purpose the major thing is granting an advance is the
security offered by the borrower and its actual market value.

PROCUREMENT POLICIES

Procurement policies are more concerned with manufacturing


organizations. In bank industry that is service industry procurement
means the procurement of funds from various sources such as
deposits. It involves attracting and holding the funds of the depositors.
After the acquisition of funds, the bank invest the acquire funds. One
alternative is to lend its money and earned interest markup or invest
in govt. securities etc. as already mentioned in the above paragraph
the major sources of funds for a bank are the deposit of the general
and the other sources of income includes interest or markup charges
received for various services offered by the bank to its clients.
A bank tries to attract maximum no. Of accounts so that it can
increase it’s deposits and these lending ability. In order to get
maximum no. of accounts the staff of the bank must be efficient as
compared to the other banks and the manager of the branch must
take personal interest in attracting deposits. Good quality of the
service is the key to success.

MARKETING POLICIES

Marketing policies are also one of the most important policies because
they are related to the growth of the organization. Marketing for a
bank would mean:
55 Creation of new product and services.
56 The bank marketing must be consumer oriented.

Following are the marketing policies of the ACBL.

a. Keeping the track of latest development in the world and


incorporating the latest and most modern equipment to
make the banking procedures simple and easy for the
customers.
b. Development of products for the customers.
c. Giving good services and maintaining good relations with
the customers.

These policies can be implemented by providing the right product and


service to the customer at the right place, at the right time, at the
right price.
It is necessary for the managers to keep in touch with consumers,
observe their needs and develop products, which meet their needs.

PROMOTIONAL POLICIES

Public relation and advertising has assumed a great importance in the


modern banking business. As for as promotional activities are
concerned, the main objective of the bank is to inform the existing
clients and other people about its new products or change in the
existing services. ACBL establishes its purpose through:

57 Direct contact with customers.


58 Relation with business organizations.
59 Community relations.

LENDING POLICIES

Every bank has its own lending policies except for those, which are
common for all the banks, i.e. the policies, which are imposed on all
the commercial banks by the SBP, are known as prudential
regulations. The lending policies of ACBL are as follows:

60 The bank only invests in those sound and viable projects, which
have good rate of return.
61 Bank prefers to advance loan to their account holders.
62 Loan is given to reliable person only.
63 No political loan is sanctioned by bank.
64 Any account holder can apply for running finance or demand
finance. The manger apprises the past record of account holder
and his credit worthiness. If he finds any thing wrong he can
refuse to sanction the amount.
65 The bank while taking security prefers govt. Securities to
shares.
66 It also advances working capital loans.

PERSONAL POLICIES

Personal policies have an important role in the success of an any


organization. ACBL have its proper personal policies. Good personal
policies motivate the employees towards hardworking.
Following are the main personal policies of ACBL:
67 Selection of employees on merit
68 Selection of capable employees.
69 Attractive salary package for motivation of employees.
70 To train and develop the future management of the bank.
71 Every employee must have certain set of clearly defined duties
72 Effective communication at al levels of the organization.

DEPARTMENTS

73GENERAL BANKING DEPARTMENT


74CREDIT DEPARTMENT
75FOREIGN EXCHANGE DEPARTMENT

Banking procedures are divided between various departments.


Different departments do their jobs in occurrence with the bank
policies. In ACBL each branch is divided into various departments.
Head of department manages each department & officials of the
branch follow procedures.

The departments working within a branch are as:


GENERAL BANKING DEPARTMENT
76 Account opening department
77 Remittances department
78 Cash department
79 Clearing department

PRIVILEGE BANKING DEPARTMENT


80 Online banking
81 Lockers

CREDIT DEPARTMENT

FOREX DEPARTMENT
82 Import department
83 Export department
84 Foreign currency department

ACCOUNTS DEPARTMENT
IT- DEPARTMENT

ACCOUNT OPENING DEPARTMENT

Functions of Account Opening Department

85 Providing account opening form according to the customer's


requirements,
86 Guide the customer about the requirements of the account
opening and form filling,
87 Check the forms whether they are correctly completed or not,
88 Preparing checklist,
89 Stamping on the form,
90 Maintaining account opening register,
91 Pasting of forms in register after release from general banking in
charge,
92 Issuance of cheque books,
93 Issuance of accounts maintenance certificate,
94 Closure of account
95 Verification of signature in case of cheque presented before
releasing of account opening from SS card is not yet scanned

IMPORTANCE OF INTRODUCTION
FOR A\C OPENING
Introductory references As soon as a person opens an account with the
bank, the banker customer relationship is established. In such
situation this is advisable the banker should not open new accounts of
unknown persons unless references regarding the integrity and
responsibility of the purposed persons are obtained from respectable
parties.
Failure to exercise this care may result in serious consequences not
only for the banker concerned but also for the other bankers and
general public. It is not sufficient to obtain the reference but its
genuineness must also be verified. Omission of this may have serious
consequences.
In practice we see that there is tough competition among bankers for
procurement of deposits, so to press a prospective new customer to
find the desired reference may offend him, yet he is to be welcomed
by the banker as a source of fresh deposits. But these practical
difficulties have to be handled tactfully because the risk involved to
carry out this requirement partially or wholly may lead to undesirable
results.

PRECAUTIONS TO AVOID FRAUD


If preliminary necessary inquiries mentioned above are not made and
account is opened, it is possible that an undesirable person is provided
with a chequebook to defraud innocent people or the person being an
undercharged bankrupt may put the banker in difficult situation.

1. SAFEGUARD AGAINST UNINTENTIONAL OVERDRAFT


Sometimes due to misreading of the balance an account may be
inadvertently overdrawn or the credit entry of customer is placed into
the account of another person by mistake who happens to have
withdrawn that amount. in all such cases the amount can only be
realized if the person is man of integrity.

2. INQURIES ABOUT CUSTOMERS


Have all necessary information with him regarding his Generally a
banker is asked by another banker to give his opinion about his
customer’s financial position. Therefore, it is beneficial for the both
that the banker should customers.

3. PROOFS FOR REASONABLE CARE AND INQUIRY


Under section 131 of negotiable instrument act, 1881 a collecting
banker is protected provided he collects the cheques of his customers
in good faith and without negligence. But if the banker fails to make
preliminary inquiries he may be deprived of statutory protection, being
guilty of negligence.

ACCOUNT OPENING PROCEDURE &PRECAUTIONS:-

KNOW YOUR CUSTOMERS


The objective of knowing a customer is to have a fair idea about the
identity, financial resources, and general information about the
customer at the time when the relationship is established. A banker
must have following information about the customer:
96 Customer name:
Enter complete name as mentioned in original ID card /other
business documents.
Nature of business /profession: if customer is of salaried class enter
his employer name. If the customer is a businessman, trader, sole
proprietor, enter the business name, for example “Jamil
Traders”etc.also enter the customer’s title/position and address of the
business/employer. Address with P.O.BOX is not acceptable. Similarly
remarks like
“Private service”, “business” are not acceptable, rather specify what
type of company/business the customer is associated with for example
Manager Philips Electrical Company.

97Address:
Enter the complete business/residential address. With in the brackets
you may also provide prominent address identification marks for ease
of physically locating the address.

98 Contact Numbers:
Enter home, official, mobile, fax number and e-mail address (if
available). Banker can verify the number by giving the customer a
courtesy call or by sending him a e-mail.

99Other/ secondary/ mailing address:


Some customer may volunteer their parents or siblings’ addressor
second home address or a mailing address other than a permanent
address.

100Special instructions:
Clear-cut special instructions must be obtained from customers. If the
customer has not given any special instruction specified column must
be cancelled by drawing a line, as this column must not be left blank in
any circumstance.

101Existing/other bankers:
Almost most all the bankers usually have a banking relationship with
another bank. In case of customer who does not have an existing
banking relationship, or does not want to disclose the existing
relationship, then it is strongly recommended that at least for some
time this particular account must be kept under observation.

TYPES OF ACCOUNTS

1) ACCOUNTS OF GENERAL CUSTOMERS

102Minor account
103Illiterate person account
104Joint account

2) ACCOUNT OF SPECIAL PERSONS


105Proprietorship account
106Partnership account
107Limited company’s account
108Accounts of club societies and associations
109Agent’s accounts
110Trust account
111Liquidator’s account executer’s and administrator’s
account

REMITTANCE DEPARTMENT

Functions of remittances department

The functions of remittance departments is to handle with the


following instruments:

112Pay Order
113Demand Draft
114Pay slip
115Telegraphic Transfer
116Payment of Remittances
117Cancellation of pay order & demand draft

The remittance department deals with the transfer of money from one
place to another.
This department deals with the local currency transfer only. ACBL
provides these services to both customers & non-customers
Remittance can be made through:

1) Instrument transfer
2) Electronic transfer
3) Mail transfer

Instruments of the Remittances Departments

PAY ORDER
Pay order issued from one branch only be payable from the same
branch. It is normally issued for payment in the same city. It is
normally referred as banker's cheque

118Get the application form.


119Issue pay order after recovering cheques.
120Do necessary vouchering.
121Make entry in PO issue register.
122All pay order shall be crossed" payees account only".

Charges on issue of Pay Order

Amount (Rs) Charges (Rs)


Less then 100,000 50
Above 100,000 Nil

Duplicate Pay Order:


123Check the record to insure that payment has not been
effected.
124Get application for issuing of duplicate PO.
125Recover charges.
126Issue duplicate pay order.

DEMAND DRAFT
It is an instrument on demand for which value has been received,
issued by the branch of the bank drawn i.e. payable at some other
place(branch) of the same bank. In case of agency arrangement-
demand draft can also be issued by one branch of the bank payable to
other branch of the other bank e.g. DD issued by ACBL payable by
MCB.

Charges on issue of Demand Draft

Amount (Rs) Charges (Rs)


1 - 10,000 25
10,000 – 100,000 50 or .1%
100,000 - 1000,000 200 or .07%
Over 1000,00 1000 or .05%

PAY SLIP
The bank for settlement of it own payment issue pay slip.
127No excise duty
128No commission
CASH DEPARTMENT

All physical movement of cash in the bank is made through the cash
department. Normally cash department performs following functions

129Receipt
130Payments
131Act according to any standing instructions
132Transfer of funds from one account to another
133Handling of ATM
134Verification of signatures
135Posting
136Handling of prize bond

Cash receipt section


In this section the cashier in following manner receives cash

Cash payment section

In this section honoring the cheque through following process makes


payment.

CLEARING DEPARTMENT

MEANING OF CLEARING
The word clearing has been derived from the word “Clear” and is
defined as “ a system by which banks exchange cheques and other
negotiable instruments drawn on each other within a specific area and
thereby secure payment for their clients through the Clearing House At
specified time” in an efficient way”.

1. Since clearing does not involve any cash etc. and all the
transaction take place through book entries , the number of
transaction can be unlimited.
2. No cash is needed as such the risk of robbery, embezzlements
and pilferage are totally eliminated.
3. As major payments are made through clearing, the banks came
manage cash payments at the counters with a minimum amount
of cash in vaults.
4. A lot of time, cost and labor are saved.
5. Since it provides an extra service to the customer of banks
without any service charges or costs, more and more people are
inclined and attracted towards banking.

CLEARING HOUSE
It is a place where representatives of all banks sit together and
interchange their claims against each other with the help of controlling
staff of State Bank of Pakistan And where there is no branch of State
Bank of Pakistan the designated branch of National Bank of Pakistan
act as controlling member instead of State Bank of Pakistan

MEMBERSHIP CEASES
137It ceases to be a scheduled Bank.
138It is not able to meet its liabilities.
139State Bank of Pakistan or Central Govt. prohibits it to receive
fresh deposits.

RULES AND REGULATIONS HAVE CLEARING HOUSE:


140Timing:(Monday through Saturday)
i. 1st Clearing at 10:00 a.m.
ii. 2nd Clearing at 2.30 p.m.

141Each bank will send competent representative to exchange the


cheques.
142Each bank is required to insure that all cheques and other
negotiable instruments are properly stamped and suitably
discharged
143An objection memo must accompany each and every cheque
when return unpaid duly initialed.
144Each bank is required to maintain sufficient funds in the
principal account with SBP to meet the payment obligations.
145The State Bank of Pakistan debit the account of each member of
the clearinghouse with the proportionate working expenses
incurred on the operation of clearing house. These expenses are
very nominal.

OUTWARD CLEARING AT THE BRANCH:


The following points are to be taken into consideration while an
instrument is accepted at the counter to be presented in outward
clearing:
146The name of the branch appears on its face where it is drawn
o.
147It should be stale or post dated or without date.
148Amount in words and figures does not differ.
149Signature of the drawer appears on the face of the
instrument.
150Instrument is not mutilated.
151There should be no material alteration ,if so, it should be
properly authenticated.
152If order instrument suitably indorsed and the last endorsee’s
account being credited.
153Endorsement is in accordance with the crossing if any.
154The amount of the instrument is same as mentioned on the
paying-in-slip and counterfoil.
155The title of the account on the paying-in-slip is that of payee
or endorsee (with the exception of bearer cheque).

If an instrument is in order than our bank special crossing stamp is


affixed across the face of the instrument. Clearing stamp is affixed on
the face of the instruments, paying-in-slip and counterfoil (The stamp
is affixed in such a manner that half appears on counterfoil and
paying-in-slip). The instrument is suitably discharged, where a bearer
cheque does not require any discharge and also an instrument in favor
a bank not need be discharged.
The instrument along with pay-in-slip is retained while the counterfoil
is given to the customer duly signed. Then the following steps are to
be taken:

1. The particulars of the instrument and the pay-in-slip or credit


voucher are entered in the outward clearing register.
2. Serial no. Is given to each voucher.
3. The register is balanced; the credit vouchers are balanced from
the instruments and are released to the respective departments
against acknowledgement in the register.
4. The instruments are arranged bank wise.
5. The schedules are prepared in triplicate, two copies which are
attached with the relevant instrument and the third is kept as
office copy.
6. The house page is prepared from schedules in triplicate.
7. The schedules and house pages are signed by the house
incharge with branch stamp.
8. The grand total of the house page is taken and agreed with that
of the outward clearing register.
9. The instrument along with duplicate schedule and house page
are sent to the main office.
However the amount is kept in float till final status of various
instruments is known from respective paying banks in second dealing.

The entry of the instrument returned unpaid is made in Cheques


returned Register. If the instrument is not to be presented again in
clearing then a covering memo is prepared. The covering memo along
with returned instrument and objection memo is sent to the customer
who sent the same to his account.

INWARD CLEARING OF THE BRANCH:


1. The particulars of the instruments are compared with the list.
2. The instruments are detached and sort out department wise.
3. The entry is made in the inward clearing register (serial no.
Instrument no. Account no. Is written).
4. The instruments are sent top the respective departments
5. The instruments are scrutinized in each respect before honoring
the same.

OUTWARD CHEQUES RETURNED UNPAID:


These are the cheque returned unpaid by us in inward clearing. due to
some objections.

INWARD CHEQUES RETAINED UNPAID:


These are the cheques retained unpaid to us which were lodged by us
in Outward Clearing.

RETURN OF CHEQUES AFTER CLEARING HOUSE:


Suppose all cheques received in the inward clearing are passed and
later on it is found that a cheque should have been returned, in such
cases, we contact the collecting branch and request them not to make
payment against the proceeds of the cheque which was not returned
unpaid by us in due time. the cheque with objection memo along with
a covering letter is sent to the collecting branch, making request to
issue a payment order in favour to balance the Cash-cum-day book we
may debit suspense account sundry debtors with the approval of the
manager. When the payment order is received, it is lodged in clearing
and suspense account, sundry debtors is adjusted accordingly.

SPECIAL CLEARING:
In addition to the normal clearing function at Clearing house it is
mutually agreed to hold an extra clearing at the clearing house on the
particular day and time which is known as “special clearing” it is
arranged due to the rush of work arising out of say, more Holidays
declared by the Central Govt. at a time, but normally special clearing
is he4ld on last working day of our half yearly and yearly closing i.e.
30th June and 31st Dec. every year.