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Our Earth hangs on nothing, The moon has enigmatic intoxication, The beautiful mountains, And singing streams and valleys, Magical clouds and shinning rainbow, Infinite stars and burning sun, Apparent calm mighty seas, The charming winds and endless skies……. But why do they exist………? Did we ever try to observe their beauty and reality………..? Did we ever try to find purpose of our creation……..?
This report is dedicated to the beauty & Reality of Universe
First of all , I am very thankful to Almighty Allah ,who blessed me with skills,talent,energy and confidence that let me to successfully perform this internship. Internship is a massive task .Though it is not a job ,but even then it needs committed efforts , study ,devotion and most of all ,guidance to be accomplished successfully.Among all these elements , guidance is of maximum importance.Because banking activities are much different from what we study at campus,so I need guidance at every stage. So first of all ,I am very thankful to my respected teachers Sir Shahid Yaqub and Sir Tariq for their guidance at many stages particularly while making internship report. When I joined Askari bank as an Internee, I knew very little about the banking operations.but I found huge guidance at every step that enabled me to successfully do my internship.I oblige the contributions of all the employees there. I am very thankful to Mr Imran Ul Haq (Credit department) for his massive guidance at every stage.I spent most of time of my internship in credit department and he did his best to understand me everything about all activities in credit department.He not only gave me opportunity to sit by him and observe his working but also he gave me many tasks to perform .Obviously I have learnt a lot from him specially interpersonal and negotiation skills for which I am very thankful to me. Then I am very thankful to Mr Rao Naeem ( Leasing Department) for his huge guidance to me .At many occasions ,I used to spent my leisure time with me and he used to comprehend me about the important information about banking industry for which I am very thankful to him. Finally I am thankful to Sobidar (Rtd) Ashraf for serving and assisting me in many matters. Muhammad Ahmad Internee ,Second batch,2010. Askari Bank Ltd.
Business Administration study is much different from traditional studies.here unlike the tradition of cramming , the students are encouraged to learn skills ,talents and confidence that let them to perform successfully in practical career.For this purpose ,the whole study of MBA is embedded with many assignments ,presentations and projects that garnish such skills of students and help them in gaining idea about the practical business world.The internship program is also intended for such purpose.However , as it takes at the end of studies ,it revises the majority of MBA study concepts and as students have become much aware and mature about business world,so it gives them a final touch in their boomed shaping. Keeping this fact at focus, Department of Management Sciences organizes Comprehensive internship program to enable its students to learn and gain most of needed skills and knowledge that further assist them in getting good job and start a booming career.The Department not only assists in posting students in leading organizations but also guide them about various matters at any stage of internship. Though I have already some practical exposure,but doing internship at Askari bank proved to be very important for me.I learnt a lot about the importance of communication , interpersonal skills there.The reason for Chosing Askari bank is very simple ,having superb affection with the military.As Askari bank is powered by Army Welfare Trust that is a military led business organization ,so I had decided long time ago that I will chose this bank for internship.The bank ,its level,its offering and its operations eventually proved that I have did internship in a very good bank. I learnt and enjoyed my work there so much that I spent an extra week there.This is indeed the success of any company that it has won the heart of a person serving it in some manner. Now whenever nostalgically I recall those moments, I indeed get gloom and miss those learning and challenging moments. After the completion of internship ,its report making is also mandatory .That will let my teachers and internship team to understand what I did and how did I perform there. So here is my effort to accumulate my workings and contributions that I made at Askari Bank ,RYK Branch.
I have done my best in compiling this report and I hope that It will be liked and appreciated by all the readers.
Banks play very important role in the economy of any nation. According to many analysts ,the economics health of any country can be checked by having a look at its banking sector. Although banks create no new wealth but their principal activities like borrowing, lending and related activities facilitate the process of production, distribution, exchange and consumption of wealth.Also the banks mobilizes the savings of the people into other projects ,thus such series of further investments brings boom to economy and opens more jobs.For this reason, many economic icons term bank as the blood of economy. The similar is the case with Pakistan.The present decade may be termed as the golden era for banking sector in Pakistan in which many private sector banks have rapidly boomed up and diversified .The banking sector offered some of the very demanding offerings specially car leasing , ATM’s ,credit cards that took huge appreciation and demand from public.The huge success of banking sector also attracted foreign investment in this sector and therefore we saw massive foreign investment in our banking sector specially from the Arab States. Askari Bank is one some banks that covered milestones in very brisk era and have raised flags of their success ,quality,reliability in the industry. It was founded in 1992 and in its journey of about eighteen years, its growth and success patterns have far outgrown the industry standards.History is evident that change is inevitable and who has realized this reality and get consistently modified according to coming change, has survived even in the tough and intense competition. Askari bank realizing this fact, has always given keen foucs at innovation ,improvement and flexibility according to the customer , market and economic environment change.Its shorter ,smart name ,sober colors and fresh outlook depicts its views and ideology of banking as well as its importance as strongest financial institutions in the country. As mentioned earlier in preface the worth of internship project , when I came to me to commence my internship ,obviously there came no other choice in my mind but Askari Bank.My time there was very good .In that learning environment , I observed and gained many new things.Internship normally requires six weeks duration ,that is very negligible to fully comprehend the banking operations and routine activities .but even then, my managers paid special attention and guidance to me and also I tried my best that let me to learn much about the banking sector.Like a traditional bank, there are various departments in Askari bank ,RYK branch and sometimes internees are rotated in all departments for few days in each department but I was confined by
my manager to some departments only and not in all the departments.This report comprises of first introduction of bank ,then about its branch in Rahim yar khan ,then a brief introduction of all of its departments and then my working as internee.
Being a subsidiary business unit , Askari Bank Limited is powered by Army Welfare Trust. So before proceeding to bank’s introduction, We first take a quick glance of
Army Welfare Trust.
Army Welfare Trust
Army Welfare Trust enjoys a unique and proud history. The Pakistan Armed Forces have established several organizations for running industrial and commercial enterprises. These organizations provide employment for exservicemen, besides creating job opportunities for others. These organizations include Army Welfare Trust (AWT), Fauji Foundation and Shaheen Foundation. Army Welfare Trust has established a reputation as a leader in the corporate sector.Its story is that of perseverance, innovation, business acumen and going beyond the frontiers in agriculture, cement, pharmaceuticals, leasing, insurance, banking, energy, information technology and many other diverse fields.
To be one of the leading business houses employing best business practices.
To undertake safe and profitable commercial activities in a manner that portrays AWT's image as a respected market leader while generating maximum funds for meeting the welfare requirements of the Army.
We have an unwavering commitment of being a good partner, focused on building productive, collaborative, trusting and beneficial relationships with governments, other companies, customers, communities and each other
- 1984 …Askari Sugar Mills was established in district Badin, province Sindh . - 1990 • Askari Woolen Mills started its operations in March 1990. • Askari Shoe project was established in May 1990. • Askari Real Estate unit was established in 1990. - 1992 .. Askari Bank Ltd. commenced its operations in April 1992. - 1993 . .Askari Leasing Ltd. was established in September, 1993. - 1995 • Askari Aviation Pvt. Ltd. was established in July 1995 . • Askari General Insurance Company Ltd. was established in October 1995. - 1996 • Askari Guards Pvt. Ltd. was raised in May 1996. • AWT acquired two Cement Plants at Wah and Nizampur in 1996. • Askari Pharmaceuticals was found in 1996. • Mobil Askari Lubricants Ltd. started operations in December 1996.
1997 Askari College for Entrepreneurs was established in July 1997 at Rawalpindi.
1998 Askari Information Systems Ltd. was established in 1998.
2002 Askari Compressed Natural Gas Project was launched in 2002.
Current Business Units
Army Welfare Trust runs these business units
1: Public Listed Companies
Askari Bank Ltd
2: Public Unlisted Companies
• • • •
Askari Cement Ltd Wah MAL Pakistan Ltd Askari Securities Ltd Askari Investment Management Ltd
3: Private Limited Companies
• • •
Askari Aviation Pvt Ltd Askari Guards Pvt Ltd Askari Enterprises Pvt Ltd
4: Other Business Units
• • • •
Askari Cement Nizampur Askari Real Estate Askari Projects (Woolen & Shoes) Askari CNG
• • • •
Askari Farms and Seeds Army Welfare Sugar Mills Blue Lagoon & Army Welfare Mess Askari Cement Marketing
Askari Bank Limited
Askari Bank Limited
Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and Islamabad Stock Exchanges.Askari Bank has expanded into a network of 226 branches / subbranches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared network of 4,173 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As at December 31, 2009, the Bank had equity of Rs. 14.95 billion and total assets of Rs. 254.33 billion, with 984,485 banking customers, serviced by our 6,159 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank engaged in managing mutual funds and shares brokerage, respectively.
The bank’s policies, vision , flexible approach ,financial strength , strong back and firm foundation ,all these elements have already put the bank on its journey to marvelous success .It has proved its value and strength in a very brief span of time and yet it has a long way to go ahead.The commitment ,teamwork and fairness of bank’s employees and the integrity of all of its activities are focused at efforts driven towards success ,customer satisfaction and eventually long term profitable relationships.
To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stake-holders, and contributing to society.
To be the bank of first choice in the region.
Askari Bank’s vision to be the bank of first choice in the region demands continuous strive for creation of business opportunities with innovation while maintaining core values to meet its commitment to all stakeholders.The range of products aims to serve diverse customer base that comprises of corporates, SMEs individual savers, households and, farmers. At the same
time, its people are constantly engaged in assessing customer needs and market dynamics to realign its products and its priorities to attain brand recognition and competitive edge. It is reshaping portfolio of businesses by investing in higher growth areas, extending and developing our core competencies and moving out of weak and non–core segments.the existing technology with a comprehensive state-of-the-art solutions. This initiative will greatly improve its product delivery and service abilities.
Creating opportunities with innovation and technology
• • •
Commitment : Integrity :
Passionate about our customers’ success,
delighting them with the quality of our service. A distinctive investment, delivering outstanding performance, return and value. Fairness : Exemplary compliance, governance and business Team-work : Caring for our people and helping them to grow. ethics.
Service : Dedication towards social development and improvement in quality of life.
Knowing our customers and their needs is the key to our business success. Our products and services are as diverse as our market segments. Our client relationship managers are well equipped and well trained to provide the most efficient and personalized service to the customers. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services to its 984,485 relationships.
We believe that the bottom line of any business is creating shareholder value. To gain their trust and confidence, we believe in providing our investors timely, regular and reliable information on our activities, structure, financial situation, and performance.
We strongly believe that the interests of the Bank and the employees are inseparable. At Askari we try to create a ‘we’ culture where there is mutual trust and respect for each other. We encourage ownership behavior so that everyone feels responsible for the performance and reputation of the Bank. We are committed to develop and enhance each employee’s skills and capabilities through extensive in–house and external training programs and job rotations. In order to ensure meritocracy, our appraisal system is purely performance based.
• To achieve sustained growth and profitability in all areas of business. • To build and sustain a high performance culture, with a continuous improvement focus. • To develop a customer–service oriented culture with special emphasis on customer care and convenience.
• To build an enabling environment, where employees are motivated to contribute to their full potential. • To effectively manage and mitigate all kinds of risks inherent in the banking business. • To optimize use of technology to ensure cost–effective operations, strengthening of controls, efficient management information system, enhanced delivery capability, and high service standards
To manage the Bank’s portfolio of businesses to achieve strong and sustainable shareholder returns and to continuously build shareholder value. • • To deliver timely solutions that best meet the customers’ financial needs. To explore new avenues for growth and profitability.
Code of Ethics and Conduct
Askari Bank seeks to maintain high standards of service and ethics enabling it to be perceived as impartial, ethical and independent. In addition to the general guidelines, the following are the salient features of the Bank’s code of ethics and conduct. • Presence of a corporate culture that seeks to create an environment where all employees are treated equitably and with respect. • Employees must carry out their responsibilities in a professional manner at all times. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves, the Bank or its customers. • Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers’ expectations. Fairness, Truthfulness and Transparency govern our customer relationships in determining the transactional terms, conditions, rights and obligations. Employees must safeguard confidential information which may come to their possession during the discharge of their responsibilities. Respect for customers’ confidential matters, merits the same care as does the protection of the Bank’s own affairs or other interests.
Employees must ensure that ‘know your customer’ principles are adhered to by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation, standing and the nature of their business activites. Employees must avoid circumstances in which their personal interest conflicts, or may appear to conflict, with the interest of the Bank or its customers. Employees must never use their position in the Bank to obtain personal advantage or gain. Employees must not enter into an agreement, understanding or arrangement with any competitor with respect to pricing of services, profit rates and / or marketing policies, which may adversely affect the Bank’s business. Employees must not accept gifts,business entertainment or other benefits from a customer or a supplier / vendor, which appear or may appear to compromise commercial or business relationship. Employees must remain alert and vigilant with respect to frauds, thefts or illegal activities committed within the Bank premises.
A : Director’s Profile
Lt. Gen. Javed Zia HI (M) …..Chairman Lt. Gen. (R) Imtiaz Hussain HI (M) …….Director Maj. Gen. (R) Saeed Ahmed Khan…Director Mr. Zafar Alam Khan Sumbal…Director Mr. Muhammad Riyazul Haque….Director Mr. Shahid Mahmud…Director Mr. Ali Noormahomed Rattansey…Director
Dr. Bashir Ahmad Khan…Director Mr. Tariq Iqbal Khan ……..Director Mr. Muhammad Rafiquddin Mehkari …President & Chief Executive Mr. M. A. Ghazali Marghoob….Company Secretary Mr. Saleem Anwar…Chief Financial Officer
B: Audit Committee
Dr. Bashir Ahmad Khan…. Chairman Mr. Ali Noormahomed Rattansey…. Member
KPMG Taseer Hadi & Co.Charted Accountants.
Legal Advisors : Rizvi, Isa, Afridi & Angell
D: Registrar & Share Transfer Office
M/s THK Associates (Private) Limited, Ground Floor, State Life Building # 3, Dr. Ziauddin Ahmad Road, Karachi - 75530 P.O.Box No. 8533, Karachi. Tel : (021) 5689021, 5686658, 5685681 Fax: (021) 5655595 UAN: 111-000-322
E: Registered Office /Head Office
AWT Plaza, The Mall, P.O.Box 1084, Rawalpindi. Tel : (051) 9063000 Fax: (051) 9272455 Website: www.askaribank.com.pk
Awards & Achievements
"Askari Bank has won the first position in the "Best Corporate Report Award for the year 2008" by ICAP & ICMAP."
Askari Bank continues its success in competition. Recently we have once again been given the “Best Retail Bank in Pakistan” by The Asian Banker for the 2nd consecutive year. Askari Bank has been given the 1st Consumer Choice Award 2004 for the Commercial Banking Category by the Consumer Association of Pakistan. We have also received the Corporate Excellence Award for the financial sector from the Management Association of Pakistan (MAP) for the years 2002, 2003 and 2004. We have been given “The Best Bank in Pakistan” award by Global Finance magazine twice i.e. for the years 2001 and 2002. We have been given the “Best Consumer Internet Bank” award by Global Finance magazine for the years 2002 and 2003. We won the Euromoney and Asiamoney awards as early as 1994, 1996 and 1997. We have A1+, the highest possible credit
rating, for short-term obligations, and our long-term rating stands at AA. We won the prestigious “Best Presented Annual Accounts” award from the Institute of Chartered Accountants in Pakistan (ICAP), and The Institute of Cost and Management Accountants in Pakistan (ICAMP), for the Services Sector, for the years 2000, 2001and 2002. We have also received ranking prizes during the last six years from the South Asian Federation of Accountants (SAFA) for “The Best Presented Annual Accounts” for the financial sector, in the SAARC region. In 2007 Askari bank won “The Best Consumer Banking Award 2006” for the third consecutive year from the consumer Association of Pakistan. In 2008, Askari Bank has been given “The Best Retail Banking Award 2008” by Pakistan Guarantee Export Corporation Ltd.
Principal Foreseen Attributes
Implementation of the new core banking system is planned in phases. In the first phase most products and services in our conventional branches are being addressed while in the second phase Treasury and Islamic Banking services will be covered. In view of the old system being decentralized and its reliance on branch based servers, roll-out of the new system will be gradual over the entire branch network with all branches of the Bank planned to be converted to the new system within two years of the first branch going ‘live’ during the first quarter of 2010. Amongst the other applications, the Supply Chain Management System is expected to transform the procurement process using electronic workflow over the Bank’s data communication network. This system will also provide an Enterprise GL for the Bank and will be able to integrate information from various sources to compile the overall position of the Bank for reporting to the regulators as well as for the management. This system will also be maintaining an up-to-date inventory of Bank’s fixed assets in a central database. The Human Resource Management System will enable the Bank to maintain an elaborate database of its workforce. It will enable the human resource function to manage its work in a highly efficient manner with functionalities such as employees recruitment, payroll management, performance appraisal, training, etc. This system will consolidate and upgrade many functions, currently carried out through the use of disparate systems and procedures. Line managers will also be able to view relevant information about their respective staff through the data communication network and thereby manage their staff more efficiently. The Risk Management System will enable the Bank to achievecompliance with the central bank’s directives in this area and will help the Bank’s management to be able to manage risk in a scientific andorganized way. It will help the Bank to achieve Basel-II compliance in line with the Bank’s policy and regulatory directives. The Customer Relationship Management System acquired by the Bank has vast capabilities and will be absorbed into the Bank’s working in phases. In the first phase it will be deployed to achieve workflow based credit approval in the consumer banking area and also provide single view of the customer to the call center agents as well as branch staff and relationship managers.
New Name & Logo Interpretation
The management and board of directors of the bank decided to change the name of the bank from Askari Commercial Bank Limited to simply Askari Bank Limited. This was for multiple reasons - firstly, the bank was generally referred to as "Askari Bank". Secondly, in the current scenario, the word "commercial" has become redundant since all banks are commercial banks. The change of name presented an excellent opportunity for a fresh new look for the bank, which would be a reflection of the bank's desire to continue to evolve with and adapt to the changing environment and dynamic consumer needs.
A: Simplicity in Design
The typefaces used for the logo are simple yet elegant. Without being overly stylish, they make a solid statement about the bank, its approach to business while maintaining the most critical aspect of any logo's design: readability. This is loosely defined as the ability of any text to be readable and recognizable at first glance. The new "Askari bank" logo is distinctive and can be recognized instantly on sight. The use of all lower case letters and the use of "Askari" and "bank" as one word gives the logo a unique identity, enabling it to stand out from the crowd
Change and evolution being the key driving elements of the new brand identity, the colors of the bank have been revisited completely. The new colors are blue and grey, with a touch of orange/yellow. Understanding this selection needs a basic study of color psychology. Blue is the color of peacefulness, loyalty, productivity and strength (or solidity). It is a color that induces positive emotions in the human body and its effects on productivity, even human strength, have been documented. Body builders work in blue rooms to be able to lift heavier weights. The second color used is a dark grey. This is the color of elegance, respect, wisdom and balance. Darker shades of grey are said to be more representative of the
properties of the color black, which are modernity, power, sophistication and wealth. However, by being grey and not black, it avoids the connotations of death, fear, etc.
The last two colors, orange and yellow, are used in a combination which is representative of a rising sun. The colors themselves, aside from the positive connotations of a rising sun, carry the joint properties of sunlight, joy, happiness, hope, wealth, energy, enthusiasm.
C: The stylized "AB"
Evolution, not revolution, is key in the development of a brand. The stylized AB, presented in 3D and in the new brand colours, is a solemn nod to the outgoing logo design, which has served the bank very well for the first 15 years of its existence. Retaining this icon maintains the recognition of the old logo, while also creating a positive link between the past, present and future of Askari bank.
Askari Bank Limited,Rahim Yar Khan Branch
Being recognizing the worth and value of Rahim yar khan as the rapidly and briskly growing city of southern and as the future industrial empire of the province,Askari Bank kept in view the very worthy concept of right action at right time and opened a branch at Rahim yar khan in 1999. The current branch of Askari bank is situated at Ashraf Complex near the central town hall.It works in a rented two storey building that is presented in the middle of the Complex.This unique corner location gives adequate outlook garnish to the bank.Being more visible and attractable to the general public..Also it is located in the heart of city and thus easily approachable from all venues within the city. The present location of the bank gives it some remarkable benefits also.One of the most important is that it offers ample and wide parking lot to its employees and customers.Also being at the main road where the main traffic streamline of city flows,one can easily approach using rickshaw etc. The Askari Bank is in this building right from its launching of Rahim yar khan branch.However now it is massively felt that present site and building are becoming insufficient to meet and handle larger and growing customers .Therefore the branch management is also looking for some site to fabricate bank own’s building.This will not let bank to build building according to own’s design and map but will also get relief of the massive amount that is paid monthly in name of rent. Like a normal bank,there are several general and routine operational departments in the Askari bank limited. However it lacks all the departments and operations that are being offered by the bank as a whole.for example ,currently it is not offering any products of Islamic banking.
The branch code of Rahim yar khan branch is 31.
Its competitors here are
• • • • • • • • • • • • • •
Bank Alfalah Ltd. MCB bank Ltd. United Bank Ltd. Allied bank Ltd. Soneri Bank Ltd. Standard Charted Bank Ltd. NIB Bank Ltd. Emirated Global Bank Ltd. Faysal Bank Ltd. Habib Metropolitan Bank Ltd. Silk Bank Ltd. My Bank Ltd. JS bank Ltd. Habib Bank Ltd.
Organogram of RYK branch
Branch Manager Mehboob Hussain
BDO Dilshad Ahmed
Incharge Credit Salman Manzoor
Manager Operations Shakeel Ahmad
BDO Imran Aslam
Relationship Officer Muhammad Imran
Incharge Argi Ali Ahmad
Head Teller Wasim u Din
Remittance ,online bills Yousaf Jamil
Account opening Shiraz
Relationshi p Officer Ammara Rasheed
Assistant Officer Rana Tariq
Teller M Saddiqui
Accounts, HR Maiha sarwar
Clearance Rehan Lucky
Cashier M jamil
IT Incharge Khurram
First of all ,we go at a brief glimpse of various departments that are in operation at Askari Bank Limited Rahim Yar Khan Branch.
Operational Banking Departments
The general banking department is the one sub divided into the following departments. A: Account opening department. B: Clearing department C: Remittance department D: Accounts department. E: Cash Department.
which deals with the general banking
operations and activities that are mostly routine work on daily bases. It can be further
A : Account Opening Department
This is the fundamental department that not only performs the fundamental and basic operations but also deal the new as well as the retained clients of the bank. Main Duties:
It opens the accounts. Various information regarding account opening and account type are also given here. It deals in the lockers issuing and regarding information. It issues the Cheque Book and regarding issues. It deals in issuing and handling various matters regarding ATM ,Debit cards and Credit cards. Very often,customers are given little services like assisting in filling form ,filling various deposit slips etc. It also engages in record keeping of all the above mentioned activities.Some of these activites are quickly updated at the bank intranet.
The various accounts in this regard are
Current Account The current account is the most common and most widespread.Normally it is preferred by most of the customers. It important feature is that it enables the customer to make transactions in more,customized,effective and efficient manner. can be opened with atleast Rs.5,000/ No Profit No deduction of Zakat Account closing charges Rs.150 Online Charges Rs.100
Saving/ PLS Account This account type is basically intended for profit making or in other sense, for investment on the customer’s point.Any person who wish to invest their money in order to get profit normally have this account.
minimum balance requirement is Rs.10,000. There can be profit or loss on the investment of the Customer’s funds deposited with the bank and this amount shall be acceptable to the Customer. The profit is paid half yearly. Deduction of Zakat With holding tax on profit @ 10% No Service Charges to close the account Service Charges for maintaining minimum balance Rs.50 Online Charges Rs.150
Term Deposit Account This is somewhat similar to Saving account with the exception that in term deposit , deposit is made for a certain period of time. And only at the end of specific period, the
customer can withdraw its principal amount.The profit is given according to pre-defined terms and conditions. Fixed Profit The longer the period for amount keeping,higher is rate of interest.And thus more will be the profit. Term Deposit usually for the period of three months, six months, One year, and five years. Deduction of Zakat and withholding Tax @ 10%.
Basic Banking Account
This account is normally intended for students .The minimum amount requirement in this case is very less that is Rs 1000. Minimum Deposit amount is Rs. 1000 Initial two withdrawns (every month) via cheque is free of cost. However customer can make as many with drawn as it intends by ATM. Bank can close the Account after six month if balance is zero.
As the opening of account is like contractual agreement between bank and the customer ,therefore for a person to open any account,the following conditions are mandatory to be fulfilled.
• • • •
He must be at or above age of maturity that is 18 years. He must be mentally sound and healthy. He must not be insolvent and bankrupt. He must not be debarred under any law from entering into any contract.
B: Clearance Department
The clearance system can be best described 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.” To clarify this in simple words ,we can say by stating example that an account holder of askari banks presents cheque of some other bank.Now such cases are to be dealt by clearing department.the department gathers all such cheques and later on verify the account and clears the amount from the correspondent bank.This overall process is termed as clearing. The clearing house is place where different ambassadors of various banks exchange the instruments .Initially the bank used to perform this activity themselves.But now, National Institutional Facilitation Technologies (NIFT) is performing this operation among about 40 different Banks, 5571 Bank branches in 185 cities of Pakistan. The NIFT has made the operation much easier and quick.Here at this branch,normally the representative of NIFT comes daily near 2 pm and not only collects all instruments that are accumulated in this branch but also assign the instruments to the branch that are delivered by other banks.This process is made very safe and secure by taking the assistance of Seal tags. The instruments that are normally cleared via this department include Cheques Demand Drafts Pay Orders
C: Remittance Department
First we have a look at definition of remittance that is given below
“Remittance is transfer of funds from one place to another or from one person to another.” This is important service provided by banks both to its account holders as well as nonaccount holder. It is also income generating source for bank. The unique distinction of this department is that it works for the clearance of outside the city instruments presented by the clients or any bank’s branch from outside the city. Then it makes the relevant remittances. In broad sense ,we can divide that involved parties into four classes,which are as follows 1) Remitter The remitter is the person who initiates the request for remittance. He / She comes to issuing bank,requests for a remittance to be made, and pays the money to be remitted.This is not a free service and the customer has to pay its charges.Also it is not necessary to be account holder of that bank for utilizing this service. 2) Remittee A remittee is also called the payee. It is the person in whose name the remittance is made.or in other words,we can say that remittee is the person who receives the payment . 3)Issuing Bank The bank that sends or makes the remittance order on the request of customer in termed as the issuing bank.For example if a person goes to the Askari bank RYK branch and requests for a remittance,then this Askari bank branch will be the issuing bank. 4) Paying Bank Paying Bank is also called the drawee branch.It is the branch from where the instrument is drawn by the remittee. It is usually located in a different city.
Instruments Used In Remittances
Following are the instruments that are used in remittances Payment of Remittances Pay Order (PO) Pay Slip Call Deposit Receipt (CDR) Telegraph Transfer Rupees Traveler Cheque (RTC) Cancellation of PO, DD & CDR Advance Tax against Remittances
D: Account Department
The most important task of this department is the maintaining and keeping eye at records of past day activities that are taken place in the bank .An important thing that takes place here is the daily verification and matching of various transactions from their physical slips against the computer generated reports.These reports are continuously updated by the bank intranet and finally at the end of banking day,they are printed. their physical prove are match to the computer generated report and save it as a physical that these transaction are take place in the bank. It is for this reason that accounts department is sometimes termed as the backbone of bank. A Second very important function of account department is that it is responsible for budgeting and also record daily expense incurred by the bank and its employees. The account department is also engaged with correspondence with head office and other branches.Also it is responsible for making statements like expenses ,taxes etc.The reports generated by this department may be daily,weekly ,monthly ,quarterly ,semi annually as well as annually .It depends upon the nature of activity.however mostly simple activities required daily reporting. In the Askari Bank Rahim yar khan branch , the Human Resourse Department also works together alongwith the account department and by the same employees.Though most of the human resource related policies and activities are centralized in Askari Bank,yet this department perform some activities like performance evaluation report
making of bank employees ,feedback /complains from employees, any conflict or problem resolution with the bank or its employees.This department also monitors and handles matters relevant to internship and internees.Obviously it is this department that clarify any candidate for internship approval ,then makes its placement and finally evaluate its performance and task performed and grants the Internship Letter.
E: Cash Department
This is the most important department. It deals with the physical movement of cash in a bank.Cash is either deposited by customers in the bank or is withdrawn by them. It also has to balance the debit side with credit side at the end of the day. When a person wants to deposit amount in his account ,then he has to fill a deposit slip.The deposit slip is very simple in its format.The customer has to fill his name ,account number and finally the amount to be deposited is to be mentioned both in numbers and words.In some cases, the customer is said to narrate his address,national identity card number and cell number at the back of slip.Often the customers are given assistance in slip filling either by internees or relevant employees.The deposit slips in Askari Bank vary to bit extent for current and saving accounts. In case the customer gives cheque to draw Cheques are of two classes.which are as follows 1.Open Cheques Open Cheques are those cheques, which are paid across the counter of the bank. Open cheques may be Bearer Cheques : In this case, any person who lawfully possesses a bearer
cheque is entitled to receive payment of that cheque.
certain amount ,then the
customer’s account will be debited and money is paid to the customer.The
Order Cheques.: In this case,the cheque amount is paid only to that person
whose name is mentioned at the cheque.
In this case,the amount of this cheque is not paid at counter to the customer. Rather amount of this cheque is transferred to the person’s account whose name is specified on the cheque. Two parallel lines lying across in a crosswise direction lines are drawn across the face of the cheque to devote cross cheque tag.
Foreign Exchange Department
The silent features of this department are as follows. • • • It deals in the foreign currency. It is directly under the supervision of the branch manager and branch is responsible directly to the treasury department or head branch. Foreign amount currency is sent through SWIFT. Askari Bank Limited has the contact with American Express, America for cross the boundary transactions.
The credit department is the most important and the most income generating department of the bank.And thus it is of utmost value.Because of its broadness and necessity to fulfill specific needs of customers ,the credit department may be categorizes into the following two departments.
A: Agri-Credit Department
As we know that Rahim yar khan is basically an agricultural based district in which agri operations play a key and principal role in business economics,the agri credit department enjoys offering its services right from the start of banking operations here. To a lot of extent,this department is in direct supervision of branch manager and well as credit manager.It deals in both running as well as term financing. it offers the following services, Kissan Ever Green Finance Kissan Tractor Finance Kissan Aabpashi Finance Kissan Livestock Development Finance Kissan Farm Mechanization Finance Kissan Transport Finance
B: General Credit Department
This department is intended to satisfy general public needs who want to take loan from bank for their particular purpose or for business.Askari bank offers wide and unique package to their customers.They are very attracting as well as worthy for the customers.
The products offered by this department are
• Personal Finance
One can avail unlimited opportunities through Askari Bank’s Personal Finance. With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank’s Personal Finance makes sure that you get the most out of your loan. No matter what your need is, Askari Bank has more ways to serve you than ever before. Borrower: Resident Pakistani Nationals. Facility: Term Finance Financing Limits: Maximum upto Rs. 500,000/. (Clean) Maximum upto Rs. 1 Million. (Secured) Tenor: Maximum upto 5 Years Repayment: Monthly Installments Markup Rates: Competitive Servicing: Available at all Askari Bank branches Balance Transfer Facility: Available Eligibility : Age: Between 21 to 65 years Income: Minimum gross monthly income of Rs. 10,000/- only. Employment: Salaried: Minimum length of confirmed service with present employer is 6 months with a total length of 1 year service. Self Employed: Minimum 1 year in business. Charges/Fees: As per current schedule of charges. The personal finance is much flexible in its approach.For example , Askari bank offers financing of huge range of electronic appliances and motorbikes against consumer financing.This is very beneficial for those people who can afford quality home appliances at affordable installments.For this purpose,Askari bank has signed agreements with the leading manufacturers and companies like Samsung , Philips , LG ,Dawlance, Honda ,Dawood Yamaha Limited. This flexible approach makes this offer very unique and attracting.
• Smart Cash
Borrower: Facility: Resident Pakistani Nationals Personal Line of Credit
Maximum upto Rs. 500,000/-(Clean) Maximum upto Rs. 1 Million (Secured) Tenor: One year (renewable). Repayment: Monthly debt servicing on the outstanding balance. Markup Rates: Competitive. Servicing: Available at all Askari Bank Branches Balance Transfer Facility: Available
• Mortgage Finance
Ever since the inception of life, shelter has been rated among the primary needs of mankind. Owning a home for oneself still remains an exclusive dream for many. Askari Bank has made the realization of your dream to have a house of your very own possible. Whether you plan to build a house, tailor made to your requirements or buy a constructed house, Askari mortgage finance enables you to pursue your goal without any problems. Mortgage is a premium home financing product for customers aged between 23 – 65 years belonging to the upper, upper middle and middle income groups, residing in the urban areas of Pakistan.
• Business Finance
Borrower: Resident Pakistani Nationals. Facility: Running Finance/Term Finance. Financing Limits: Maximum upto Rs.50.0 Million Primary Security: Residential & Commercial / Built up Properly & Land. Mode of Financing: Running Finance: One year line of credit (renewable) Repayment: Running Finance: Monthly debt servicing on the outstanding balance. Markup Rates: Competitve Servicing: Available at all Askari Bank Branches. Balance Transfer Facility: Available. Eligibility Age: 21 to 65 Years. Borrowers: Resident Pakistani Nationals. Employment: Minimum one year's business or professional experience in the present business Charge/Fees: As per current Schedule of charges
Lending Product Rates
Particulars Personal Finance Upto 3 Years Upto 5 Years Smart Cash 1 Year (Renewable) Business Finance 1 Year Mortgage Finance 20 years maximum Auto Financing
Markup Rates 18% 22% 22% 1 Year Kibor + 3% to be reviewed on yearly basis 1 Year Kibor + 3% to be reviewed on yearly basis. 13% to 15%
CONSUMER BANKING SERVICES
1: Askari Finance / Loans : A: smart cash B: personal finance C: mortgage finance D: Business finance. 2: Investment Products.
2.A: Askari Paishgi Munafa Term Deposit :
Askari Paishgi Munafa term deposit account is an innovative addition in the wide range of bank’s products and value added services. This unique product will meet the immediate financial needs of individual investors who want to invest funds for a medium term. The most significant feature of this product is that the customer will receive the entire profit upfront. Salient Features
Tenure: Minimum Amount: Profit Amount: Profit Payment:
15 Months. Rs. 100,000/- or in multiples of Rs. 100,000/Rs. 12,000/- on a deposit amount of Rs.100,000/Upfront at time of placement of funds.
Additional Benefits for Customers:
• • • • • •
Financing Facility up to 80% of Principal amount. Free Visa Debit Card issuance. Free Accidental Life Insurance coverage up to Rs. 500,000. No Minimum Balance requirement in checking account. 2 Free Pay Orders in a month. (Withholding Tax and other Government charges will be applicable as per Law) No maximum limit for investment.
It is subject to applicable Zakat and Govt. levies and changes in the Banks policies from time to time.
2.B: Askari Mahana Bachat Account (1 + 3 Years Term) “Earn Rs. 842/- per month on investment of every Rs. 100,000/- for one year!" “Earn Rs. 917/- per month on investment of every Rs. 100,000/- for three years!” Askari Mahana Bachat Account is a Term Deposit facility available to individual customer with the option of 1 and 3 Years tenure. It has been designed keeping in view savings needs of individual investors who don’t want to block their funds for longer terms, with a competitive rate of return paid monthly on the 1st of every month. A financing facility up to 90% will be available for customers if required.
Product Type: Eligibility: Balance requirements: Tenure(s): Profit payment: Profit Rates: Servicing: Financing Limits:
Term Deposit Individuals Only Minimum Rs. 50,000/Maximum upto Rs. 10,000,000/1 + 3 Years Monthly - 1st of every month Competitive Available at all Askari Bank branches Upto 90% of the principle amount In multiples of Rs. 25,000/-
2.C: Askari Roshan Mustaqbil Deposit Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan specially designed for individual investors who wish to invest now for a regular return at a later stage while keeping their principal amount intact. With Askari Roshan Mustaqbil Deposit you can double your investment in a time period of ten years. Invest now in the form of monthly deposits for five years and get paid back the same amount for the next five years while receiving your principal amount in full at the end of the tenure. Salient Features Product Type: Eligibility: Balance requirements: Tenure: Profit payment: Profit Rates: Servicing: Financing Limits: Term Deposit Individuals Only Minimum Rs. 5,000/-
Maximum upto Rs. 50,000/10 Years (5 + 5) Monthly – on completion of first 5 years Competitive Available at all Askari Bank branches Upto 90% of the principle amount after completion of first 5 years
In multiples of Rs. 5,000/-
2.D: Askari Deposit Multiplier Account
“Value of initial investment of Rs. 100,000/- will increase to Rs. 265,000/- at maturity!” Aim higher with your investments with Askari Deposit Multiplier account. This account is for individual investors whose purpose is long term savings with high returns. With a tenure of 10 Years and a competitive rate of return on maturity this account is ideal for investors who wish to start saving for their future today. Salient Features Product Type: Eligibility: Balance requirements: Tenure: Profit payment: Profit Rates: Servicing: Financing Limits: Maximum upto Rs. 10,000,000/10 Years On maturity Competitive Available at all Askari Bank branches Upto 90% of the principle amount Term Deposit Individuals Only Minimum Rs. 50,000/-
2.E : Askari value plus deposits Askari Bank leads the way, yet again with the introduction of Askari Value Plus Rupee Deposit Accounts, which promise greater financial freedom and security, in an unmatched way. Now you can open a "Value Plus Account" while enjoying the flexibility of a normal checking account. Types of Value Plus Account 1. Value Plus Current Account 2. Value Plus Saving Account 3. Value Plus Time Deposits
Why Askari Value Plus Account ?
1. Free issuance of Debit Card 2. Free global accidental insurance coverage against debit card irrespective of balance in the account or age of the cardholder 3. Free ATM Cash Withdrawal insurance 4. Free online funds transfer facility 5. Free internet banking services 6. Free of cost 24 hours global accidental insurance coverage up to Rs. 2 million 7. Facility of Supplementary Debit Cards 8. Monthly returns on saving deposits 9. Partial encashment facility for time deposits 10. Automatic roll over facility for time deposits 11. Our un-matched service quality
2.F: askari rupee traveller cheques Askari Bank Limited has always remained at forefront in introducing innovative and unique products in banking sector. Our financial instruments provide greater financial freedom and security in an unmatched way to our valued customers. Askari Bank offers you its "Rupee Traveller Cheques" eliminating all financial risks while traveling. So avoid risk of carrying cash through Askari Bank's Rupee Traveler Cheques. "Your Best Travelling Companion" Why Askari Bank's Rupee Traveler Cheques ? 1. Free issuance 2. Free encashment 3. Profit will be offered at the time of encashment* 4. Nationwide acceptability 5. Facility of encashment in cash to the purchaser 6. Facility of encashment through clearing 7. No purchasing limit 8. Valid until encashed 9. Easily transferable 10. Account relationship not mandatory 11. Fastest refund procedure in case of loss / theft 12. Safe & secure mode of funds transfer 13. Available in Rs. 10,000 Denomination at all branches of Askari Bank 14. Perfect subtitute of your cash 3: ASKCARD ( Askari Debit Card)
Askari Bank is committed to provide you innovative and competitive solutions to your banking needs in a more efficient and personalized manner. Your Bank enjoys a strategic competitive advantage over all domestic players by virtue of its leadership, large network and technological advancement. In line with our tradition of innovation, Askari Bank takes pride in announcing launch of Askari Bank's Debit Card. Askari Debit Card means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. Askari Debit Card is your new shopping companion which enhances your quality of life by letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit cash through ATM anywhere, anytime. "Convenience at its best"
• • • • • • • • • • • • • •
Free of Cost (24) hours Global Accidental Life Insurance upto Rs. 500,000/- for every cardholder irrespective of balance in the account Free ATM Cash Withdrawal Insurance upto daily cash withdrawal limit of the cardholder against snatching, armed hold-up or forced deprivation of money Free issuance of Debit Card for new Value Plus Accountholders Umrah Tickets for 2 lucky cardholders (Each year) Home insurance of 10 lucky cardholders (Each year) No hidden charges Free from carrying cash or cheque books Free Funds Transfer Facility Free Utility Bills Payments through ATM’s Shopping Facility at POS terminals Maximum daily cash withdrawal limit Balance Inquiry, Mini Statement Supplementary Cards Un-matched Online Real-time Services
4: Investment Certificates Askari Bank's Investment Certificates not only provide the added security, investment and monthly return to the customers. These certificates are negotiable and can be transferred to third party. Investment Certificates can be issued for a period of 3 months and profit is payable on monthly basis through pre-printed tear-off coupons. Product Features 1. 2. 3. 4. 5. 6. 7. 8. 9. Free issuance and free encashment Account relationship with Askari Bank is not mandatory No penalty on pre-mature encashment Negotiable and payable in Pakistan in Pak rupees only No purchasing limit Valid until encashed Encashable at all Askari Bank Branches Profit is payable on monthly basis through pre-printed coupons In case of loss / theft or damage, there is replacement / refund to the original purchaser 10. Encashment by third party 11. There is no penalty on pre-mature redemption, except that profit coupon shall be valid only for completed month
Rates of Profit Paid to Value Plus A/C Holders & on ABIC Particulars Value Plus Saving Deposits Rs. 10,000/- to Rs. 24,999/Rs. 25,000/- & above Value Plus Time Deposits Three months Six Months One Year Investment Certificates First Month Second Month Third Month Profit Rates 2.50% 3% 5% 5.50% 6% 4% 4.50% 5%
This department is also of much importance in daily banking activities.As we know that this is the era of information technology, so having up-to-date and state-of-the-art technological infrastructure is of keen importance for banking sector.To meet and face the challenging competition and to make competitive edge,Askari Bank has renovated its infrastructure with the latest technological equipments and tools. The main activities of IT department are
Maintain and ensure the proper working of LAN . Keep maintenance and ensure proper working of all computers within the branch Verification of N.I.C online for the purpose of account opening. Computerize record keeping of Accounts. Generate report of daily transaction in the bank.
Commencement of My Internship
The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse geographical and climatic conditions the country has tremendous potential agriculture. for growth and development and in However, adequate timely
financial assistance to the farmers will improve production potential of agriculture sector in the country. The modern concept of agricultural credit envisages establishment of an efficient institutional credit system to serve as a package of credit, supplies and knowledge for the overall strength of the farmers who at present suffer from low productivity and financial insecurity. A successful credit evaluation system, therefore, should have the basic ingredients to provide adequate amount at the right time and in the right form to help farmers in making a productive use of loan funds.
The Askari Kissan Agri Finance Program (AKAFP)
It has been designed to meet ON FARM / OFF FARM credit requirements of farmers on the most convenient, flexible, easy terms and conditions. The program features:
A broad array of credit lines designed to meet farming requirements.
Repay and borrow at your convenience on revolving credit basis at lowest mark-up rates renewal able after three years. • Convenient repayment terms based on cash flow abilities. • Availability of leased Tractors / Transport without Land / Collateral. • No Hidden Cost. • Availability of interest free package for inputs and tractors etc. • No Pre-adjustment penalties. • Earn prompt payment Bonuses and reduce financial costs. • Insurance cover of leased assets, animals, crops and life assurance of borrowers.
As we know that Rahim yar khan is basically an agricultural based district in which agri operations play a key and principal role in business economics,the agri credit department enjoys offering its services right from the start of banking operations here. To a lot of extent,this department is in direct supervision of branch manager and well as credit manager.It deals in both running as well as term financing. Askari Bank Offers the following Agricultural solutions, 1 : Kissan Ever Green Finance Askari Bank has launched this program with the sole motive to provide dignity, prosperity and freedom to the tiller of the land. The program is designed to help small, medium and large farmers in meeting their short-term input requirements against one time sanction and automatically renewable upto 3 years subject to its stipulated utilization/periodical adjustment. The credit line is sanctioned in the light of available cash flows and input requirements i.e. Seeds, Fertilizer & Pesticides etc. Salient Features of the Program are given as:
• • • •
Farmer open a profit earning "Askari Ever Green Account" with the branch. A special cheque book is issued to the farmer. Revolving credit limit as "Ever Green Agri Finance" is available to the farmer against security i.e mortgaged charge on agri land through Zari Pass Book. Hassle free, automatic renewal upon adjustment of entire principal amount with mark-up once in a year. The account is farmer friendly which benefits the farmers both ways. If the account is in credit, it earns profit, otherwise it provides instant finance, to the farmer for his agriculture needs. The mark-up is charged for the actual days the finance is utilized. Profit on credit balances will be paid on half yearly basis as declared by the bank on PLS savings accounts.
2: Kissan Tractor Finance Traditional modes of cultivation viz Bullocks, Camels, horses etc can no longer keep pace with the demands of present times due to manifold increase in the population. Power in the form of modern technology is therefore the need of the hour. To meet this emergent requirement, Askari Bank has launched a Askari Kissan Tractor Finance to bring power to the fields. Salient Features of the Program are:
• • •
This program has been designed to benefit the owner as well as non-owner farmers. The farmer will have privilege of availing non-funded facility at a reduced cost under this program on account of more equity participation. Although the facility is available for a period of five years. However, good farmer bonus will be available to the borrower in case the loan is repaid as per terms of sanction. Priority in delivery of tractor will be given by manufacturer as per arrangements with the bank. The farmer’s life & tractor will be insured against contingencies, which will provide comfort and piece of mind.
3: Kissan Aabpashi Finance Agriculture farming is impossible without adequate water. We can combat the prevalent water scarcity by harnessing more natural resources. Increased use of mechanical means thus provides a ready alternative. Keeping in view the scarcity of water, which is the lifeblood of arable lands, Askari Bank has started a program for farmers, to finance installation of Tube-Wells (electric, diesel and solar energy units) water management equipments and water channel development etc., which will help farmers to make optimum use of limited water resources. Salient Features of the Program are:
• • • •
To facilitate the farmer, to overcome the scarcity of water. To develop mechanical water resources, sprinkler and drip system etc. To avoid traditional / inefficient modes of irrigation and waste of available water. To manage natural / available resources through water management practices.
4:Kissan livestock development finance In order to supplement the income of the farmer, Askari Bank has launched a program enabling the farmer to purchase Milch Animals, Goats, Sheep, Poultry and Fisheries without incurring extra expenditure because of availablility at his farm. He will be able to get milk, meat and eggs etc., which normally do not form part of his diet. This program has the added advantage that besides fulfilling his own family’s consumption needs he will be able to market the surplus and earn additional income. This will further improve their cash flows to repay their other Loans / Revolving Credit on due date. Salient Features of the Program are:
• • •
The program will provide regular day to day income to the farmer to meet his own consumption and surplus to be marketed. This will revive / accelerate and supplement the income generating capacity. It will enhance the repayment capacity of the farmer.
5: Kissan farm mechanization finance Beside Power at the farm i.e. Tractor, the benefits / advantages of power are maximized with the use of Mechanical Support i.e. modern and improved equipments which essentially complement one another due to their cost effectiveness and time efficiency. Askari Bank has launched an Askari Kissan Farm Mechanization Finance for the assistance of the small farmers and provide finance for farm equipment, trailer, thresher, drills & rotavators etc. Salient Features of the Program are:
• • • •
Under this program the farmer will get benefit of use of modern agricultural tools, implements and equipments which are cost and time effective. Improves per acre yield of agri crops and quality of agriculture produce to get good price in the market. Helps to match / compete with international standards for exportable agriculture produce.
6: Kissan farm transport finance A grave handicap that afflicts our farmers is their inability, due to lack of proper facilities, to take their produce to the market through efficient means of transportation. This adversely affects the freshness, quality of the product and denies them the desirable Price-Fetching opportunity. Conversely, they lack mobility to acquire much needed inputs essential for their farming needs. One
can safely conclude that if provided with appropriate and speedy transport, the farmer can benefit by enhancing his selling ability and thus increase his income / cash flow. it is pertinent to mention that a number of Banks, Leasing Companies and Private Agencies have geared their marketing efforts to concentrate on and have mainly captured the urban markets. There is no support provided to cater to the transport needs of deserving rural farmers community. Askari Bank true to its commitment, has taken the lead to launch Askari Kissan Farm Transport Finance. Salient Features of the Program are:
• • • • •
To increase mobility and access of the farmer to the markets. To lower the burden / cost of transportation against hired transport. To create awareness of market movements in order to obtain maximum price of their produce. This will also supplement the income of the farmer which will ultimately enhance the repayment capacity of the borrower. Additional income can be generated if used for hired services to the fellow farmers.
Requirements for Agri Loans
Following are the requirements for to make an Agri Loan. 1.Zari Pass book. This is a little booklet.It is issued by government and is legal insignia of land and its owner. 2.Jamabandi. It comprises of the record of property in hands of a government official which is usually Patwari. 3.Khasra Gardawari. It is the verdict and proof that the person himself is cultivating that land. 4.NEC ( Non Encomperss Certificate) It is verdict and proof that no loan has already been taken at that land. 5.Aks-e-Shajra It is some sort of map.It compiles complete scenario of the land.It displays the directions of land. 6.Average Bae (3 yr) It is the average of sale price of land .The average of last 3 years in considered .it tells about the worth of the land. 7. Passport size pictures.3 pictures. 8.Computerized National Identity Card.4 Copies. (All the above requirements are on the behalf of customer.)
Once these requirements are satisfied ,The agri committee considers the case of that particular client.The committee comprises of Agri Manager , Credit Manager and Branch Manager.Then it is forward for further processing to the Area Main Branch.It then further moves to Regional Branch.They considers the case and if found adequate,the loan is allocated.The State Bank of Pakistan also applies a regulation for agriculture credits .Its requirements,terms and conditions are in the form of check-list.and they must be fulfilled in order for a load to be made successfully.
Askari Bank offers services for these facilities to the farmers, Zari Credit Card Fertilizers,pesticides and seeds Farm Mechanisation Tractor Modes of transport Irrigation purposes Cattle Poultry farm Dairy farm Green house Gardening Fish farm Storage house Paved Streets
Mark up • • Current markup on Agri-term finance is about thirteen percent. However it varies depending on amount of loan , and attributes of customer.It is also dependant at bank policies and economical circumstances. So, markup rate on finance is varying with the variation and borrower has to buy according to assigned markup percentage.
Of crops / fields, 2% of total loan as insurance is charged. Askari bank has the contract with the united insurance,East West Insurance,Metropolitan Insurance Company .
On life following provisions are made. - Less 55 years----------0.3% of total loan amount. - 55 to 65 years---------0.5% of total loan amount. Health certificate is required. - Above 65 years-------1.15% of total amount.
General Credit Department
The word Credit is derived from the Latin word "creditus" which means, "to believe." Taking Credit lets us to buy any desirable commodity ,or do any desirable action which we are unable to do at our own because of huge amount of money needed.The attracting thing is that we can repay it in small and affordable installments that are simple in nature and easy to comprehend by the customer.As this is a mutual sort of agreement between that bank and the customer where the basic channel is trust and to believe ,so we term it as credit. So it can be easily understood that this is the department that provides the loans for various needs.The general credit department is one of the most important in any bank and is a major source of income . So we can understand that it is one of primarily function of all banks of all categories.It sanctioned the business loans, house loans and SME loans also. I started my internship in General Credit Department .And most of my time was spent in this department.I found a huge variation in customers for credit ,ranging from industrialists to ordinary public and business men. Because of Special guidance and task assignment by my managers ,I learnt a lot in this department.i performed many tasks relevant to record keeping and maintaince, data input in computer , data sheets typing and printing and such other tasks.As Credit department deals with all the activities related to giving credit to customers ,so there I also learnt a lot regarding negotiating skills, interpersonal skills.i also found the worthwhile importance of communication by working.Overall ,whenever I nostalgically recalls my experience there ,I indeed feel that I learnt much from there and been there.
Before proceeding to the procedures and documentations ,we initially have a look at the important terminologies and concepts relevant to this department. Commercial Credits are if two types,these are 1.Funded Based It is called funded based because in this type of loan, funds from bank are directly involved.It may be categorized into three classes which are 1- A: RUNNING FINANCE: (R/F)
It is offered for one year ,however it can be renewed after end of one year if clients intends to do so. It is offered for working capital requirement of the customer . This facility is normally issued against mortgage of immovable property and Pledge of movable items. It is allocated under predefined terms and conditions and pre-sanctioned limit. In this case, which markup is charged on the amount which the borrower use. This facility is issued on revolving basis and repayment should be completed by the maturity date. Repayment in monthly installments is not required.It is at the ease of the customer.Askari Bank normally offers about 60-70 % loan against the value of pledged valuable item.It is purely in accordance of the bank management policies and there is not restriction at it by the State Bank Of Pakistan.
1-B: CASH FINANCE: (C/F) It is also offered for the working capital requirement of the customer. It is the type of loan in which client is given cash in lump sum .it is offered against the pledge of moveable property or stock .Again in this case,repayment is not necessary in monthly installments and it depends at the will of customer.Goods are depledge when the payment is done on delivery order of the bank. Askari Bank normally offers about 60-70 % loan against the value of pledged valuable item.It is purely in accordance of the bank management policies and there is not restriction at it by the State Bank Of Pakistan.
1.C: TERM FINANCE: (T/F)
Term finance is normally intended for salaried people that offer them easy installments.assists a person in investing or advancing in his business or project.However ,its gives ease and simplicity by offering payments in easy installments that can be monthly,quarterly or semi annually .It solely depends at customers consent .Also it is issued for fixed time period. The amount of finance is credited to borrowers personal account by debiting the Term Finance Account.Also in this case,interest has to be paid,either the loan amount is used or not.
2: Non fund based It can be classified in two categories ,which are
2-A: letter of Guarantee A type of contract issued by a bank on behalf of a customer who has entered a contract to purchase goods from a supplier and promises to meet any financial obligations to the supplier in the event of default. It is of two types, • Financial Guarantee Bank guarantees the fulfillment of a financial commitment on behalf of the customer. • Performance guarantee
The bank guarantees the due fulfillment of a contract or other work as specified in the guarantee, by the customer.
2-B :Letter of Credit:
A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs,orpoliticalinstability.
Lien Lien is the right of an individual or party to retain the property of the borrower until a debt talen from it is repaid by the borrower. In case of banker’s lien, as a it is an implied pledge and the banker has the right to sell the securities under lien after giving a reasonable notice to the borrower in case of his default.
Pledge The bailment of goods as security for payment of a debt is called pledge. The relationship of a customer and a banker is this case is that of a pledger (customer) and a pledgee (banker). The ownership of the goods pledged remains with the borrower, while the possession is with the banker.However strict control is there from bank and client has to take permission from bank before using pledged stock for any purpose or in any quantity. In case that client uses pledged stock without permission of bank,the case is called Force Lifting.It is against the predefined terms and conditions.To restrict it,a third party is appointed for security of pledged stock.That party or person is termed as Muqadam and is paid by client for his services.
A mortgage is the transfer of an interest in specific immovable property for the purpose of security for 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 rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a mortgage.
Loan is made against immovable properties or assets or in other words against fixed assets .The mortage does not transfer the ownership of the property and the actual possession of the property is also not transferred. However the mortgagor transfers some of his rights as an owner e.g. He now cannot sell the property without the consent of the mortgagee that is the bank.
Hypothecation is an agreement to give a charge to goods or documents of title without conferring possession of goods . The goods are charged as security for a loan form the bank but ownership and possession remains with the borrower. The security is granted by the borrower to the lender by a letter of hypothecationThis letter also depicts the predefined terms and conditions for the transaction. As in hypothecation , physical possession of goods remains to the borrower, therefore the bank maintains and checks periodical stock reports from the borrower .These reports contains full current description,value and further relevant information regarding goods.Also the credit officers make regular and untold inspections of the stock to ensure the quality and value of stock or goods.To prevent a possible loss of stock by fire, theft,or any other accident of any type, and the borrower is bound to get his stock insured. The bank has the right to take possession of the hypothecated goods as and when required.
Requirements for Loan
Following are the requirements for requesting a loan to the bank 1: business profile the basic information about the business.The general nature of business and strengths ,weaknesses and risks involved in it .About the industry and the number of competitors .from how long the customer is doing this business. 2: Property legal documents the legal document of property or asset that will be deposited as security. 3: Valuation report a valuation report made by third party recognized by the state bank of Pakistan is also needed.it normally includes the snaps,location of site,map of site ,value of resale.The fee of evaluation report to third party is to be paid by the customer.Normally a bank official personnel in also present at the time of evaluation. 4:Company stamp and letter head paid 5: bank statements of last three years. 6.financial statements of business.
Steps Of credit management
The process of credit management starts with receiving a credit request from the customer.Each customer has a purpose for borrowing either for their working capital needs or for some other purpose.. The customer presents his idea to the banker and wants the information on bank’s facilities. The proposal is usually made at the business letter head and paid.
2. Processing ,Analysis and evaluation
The next step is the processing of the request.This is a complex and of utter importance process.and consists of a series of activities to be performed in a systematic order. First we have to identify the purpose of taking loan. The possible purpose may be as according,
Export Financing . Import Trade Financing. Working Capital need for Trade and industry. Fixed Investment for Industry (Project Financing). Purchase of Industrial or Commercial Vehicles. Construction of Residential, Industrial and Agricultural Buildings. Finance for movement of Goods / Crops within the country.
Different financing Facilities are offered according to the purpose of borrowing. Some facilities may be used for specific purposes because of their nature.
Then comes the knowing of business prospects of borrower .It may fluctuate with the changing trends and vary from industry to industry.So it is important to know the complete business prospects that manifests a complete depiction of past,present and future of that business and let us to have full idea of all the controllable and non controllable forces that may effect the business Then the risks associated are also kept under consideration .All these are on the side of customer.These risks may be of following categories as follows: A. Management risk associated with the managerial capability of owners/managers, their attitudes, organizational hierarchy, business practices and knowledge of the market. B: Market risk it is because of continuing changes in demand-supply relationships in the market and is caused by any number of factors many of which are uncontrollable. C:Fluctiontion risk it is due to significant variations in cost and expenses of the borrowers operations .It is mostly due to nature of operations and technological equipment being used in the business.However the extent of flexibility the borrower has in altering its sales prices accordingly to shift the burden on the consumer is also important. D: Default risk: is the risk of the borrower not being able to repay on time .It may be either because of adverse business circumstances or because of bad intentions of customer. E.Marketability risk : is the risk associated with major fluctuation in the values of collateral securities pledged to the bank
Also the analysis of financial statements and financial ratios of the client’s business are kept under consideration.The ratios used in this regard are • • Current ratio ,Acid Test Ratio ( liquidity ratios) Debt to Equity Ratio, Fixed Assets to Net-worth, Interest Coverage Ratio. ( leverage ratios)
• • •
Total Assets Turnover Ratio, Inventory Turnover Ratio, Accounts Receivable Turnover Ratio. ( activity or turnover ratios) Net Profit Margin, Return on Assets, Return on Equity.( Profitability ratios) Earning per Share, Dividend per Share, Price Earning Ratio, Yield per Share. ( Common stock ratios)
While processing a loan proposal, bank has to do a detailed ,continous and ongoing negotiation with the customer.It let the customer to have important terms and conditions and knowledge about certain things and then confirm them from customer. The negotiation phase is very important and usually here it is decided that whether funded based or non funded based credit are more worthy for customer.Also it clarify the mode of charges upon assets taken as security.Some other prospects like period of financing or maturity period are also settled.
After the complicated process of analysis ,if the customer’s business level and activities and his nature and value of assets as securities fulfill the banks standard,then the case it considered by Branch Credit Committee.It may moves to Area Credit Committee,Regional Office Credit Committee and Head Office Credit Committee.
The maintenance, timely updating and monitoring the documents of customers is also a major function that credit department has to perform. These documents carry a substantial value and create a great problem if any dislocation occurs.So for this reason,even the photo copies of original documents are also kept in custody. As soon as a person submits proposal for loan,his separate file Is compiled and all documents are kept in it.Here we discuss the ingredients of a typical credit file of any
customer.Most of them are general but few specifications exists.These common items are divided by separtors and are as follows,
4-A. Correspondance The correspondence section of credit file comprises of any type of correspondence that is made with the client.Eg correspondence relevant to banking facilities ,Request for renewal ,Request for enhancement of facility etc.It usually comprises of borrower basic fact sheet , any kind of inter office memos , request letters ,loan application form , personal financial statements etc. Among these documents ,the borrower basic fact sheet is the most important and comprehensive.It depicts a very wide picture of the customer. The initial section of the sheet comprises of simple data about customer like Name , address,phones number ,email , CNIC, national tax number ,import/export registration number ( if applicable).The second section tells about details of directors /owners/partners .here their percentage share holding and share holding in amount is also mentioned.Then next section is about management that asks about executive directors/partners or non executive directors/partners.Further section asks about corporate status ( proprietorship/partnership/public or private limited company) and nature of business that may be industrial ,agricultural,commercial,services or any other.next section shows the requested limits.next section asks the business handled by customer with all financial institutions in last 1 accounting year.The eight section asks the details of prime assets that are to be taken as securities and finally the details of personal guarantees are mentioned.
4-B..Financial and credit reports This section of credit file consists of financial and credits reports.The most important of them are • Auditors report : recognized balance sheet of client by any charted firm.Profit & loss account ,projected balance sheet , projected profit and loss account ,projected cash flow statement etc are included. State bank of Pakistan report: report by the customer protection department of state bank of Pakistan.the consumer credit information report tells whether the
person has already taken loan or not and in case if he has taken,then also tell its record. • • Credit risk rating: Risk is rated at many attributes by the credit managers.The lower is the risk,higher are the scores allocated. Financial highlights: It consists of Profit & Loss account ,,balance sheets, various ratios like current ration ,debt to equity ratio ,leverage ratios ,and return on equity ratios ..All these are present at a single page.In other words ,we can say that it summarized the financial level of business.
4-C. Approvals/Renewals This section of credit file normally consists of • Credit Approval Face: it shows the branch name,branch code ,credit approval number ,credit approval level ( BCC,AOCC,ROCC,HOCC), review (initial,interim,annual) and also the existing and proposed limits of clients. • Business /Performance statistics : its shows the summary of business activity for the last several years. • Basic information report: its first portion tells about management ,history ,main business activities,operational facilities ,major buyers,distribution and selling teams, key buyers and buying teams ,major competitors ,business growth prospects and key success factors. The second portion asks for management assessment form ,rating at various attributes like market repute,experience,influence,qualification,financial controls,efficiency ,risk management etc.
4 D..Credit Memo This section of credit file defines the relationship strategy and marketing profitability for next twelve months with the customer.also the strategy needs to be justified on many qualitative attributes.
4 e. Financials. The final section of credit file holds the financial statements of customer’s business.
All legal documents are obtained and Credit sanction advise is prepared which consists of Date of opening, Date of maturity, Nature of the business, Type of facility, Purpose of facility,Securities, Source of repayment. Once these things are cleared, New account is opened. The Drawing Power (DP) is issued to borrower. Drawing Power depends on the amount of loan and the period of financing.There are two accounts maintained for each borrower, Credit Account and the borrowers account. In the start, the credit account has a credit balance equal to the amount of loan. After all other requirements are fulfilled; the loan is actually transferred to the borrower by debiting the credit account and crediting the customer account. Now the borrower can draw the amount from his account according to his allotted Drawing Power (DP).After a fix time period, on each installment date, borrower has to repay the principal and mark-up. Loan repayment installments are deducted by debiting the customer account and crediting the credit account.
Its comprises of controlling and monitoring the whole process until the loan is fully repaid by the customer.
Previously there Askari Leasing Corporation was a separate company but now it has been merged with the Askari Bank.The Askari bank rahim yar khan branch does only capital leasing.The bank is involved in car ,CNG machinery,medical mechinary ,power generators and others leasing. The leasing process is very simple.After sharing by customer,a little portion in equity of desirable commodity, the bank shares its fund and purchases and gives that commodity to the customer.The customer freely uses that commodity and repays the bank fund in easy installments.In Askari Bank,the customer can have an initial equity of 25-50%. The components of leasing are leasee, which is the user or customer and the second component is the leaser which is the bank.
Stages of leasing
It consists of three stages which are
1.Documentation Its further comprises of two sections which are 1-A: Pre Approval: • • • • • • • • CNIC Passport size pictures. Utility bill photo copy Proof of income.( letterpad for businessmen,salary slip for holder,jamabandi for agricultural related person) National tax number (if exists) Two references and photocopy of CNIC of referees. CIB report Verification by bank special employee
Incharge Rao Naeem
Head Office, Multan
Inspection Sobydar (R) Ashraf
1-B: post approval • Lease agreement • Post dated cheque book • Personal guarantee
Borrower basic fact sheet. Down payment
2: Calculation These calculations are mostly computer generated and are according to predefined terms and conditions. The calculation sheet comprises of cost of that item that is purchased by the customer.Then the equity of customer is there.And then the insurance percentage.Below them ,are the calculated values of total monthly rental (monthly insurance,monthly rentel) that is to be paid upto pre decided period either 3,4 or 5 years.Then it shows the equity participated amount,first year insurance amount,first month rental,documentation charges,and tracker charges(in case of car). 3.Policy Parameters These are the banks policies,terms and conditions regarding leasing of various items.
The basic responsibility of this department is to keep the record of each and every transaction and prepare reports about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis.
Activities The accounts department activities.Some of these are, deals with many important
Budgeting budget is controlled. then Its prepares the budget of the branch.the continuously checked,maintained and
Vouchers sorting Its comprises of sorting , checking and clearing all vouchers like cheques ,deposit slips ,online slips,credit card slips etc.This is very time consuming job and needs full concentration to be done. First you have to separate the deposits slips into current,saving account or basic banking account type.then they have to be arranged in ascending order.and finally they are checked against the computer generated reports.Similar treatment is done with cheques and other vouchers. Reporting The account department has to prepare various reports like sorted and arranged vouchers report ,statement of affairs,Outstanding receipt report,currency wise deposit reports ,income and expenditure reports, Assets & Liabilities ,Budget Review Report Monthly Monitory Statement ,Monthly Performance Review Report Monthly fixed investment reports. These reports vary in their duration and may be daily,weekly,monthly,quarterly ,semi annually or annually.
Maintenance & depreciation of fixed assets Account department holds the records of all assets present within the branch.Each and every asset present in the branch is assigned computer generated number slip that acts as its identity.Then the assets are also depreciated under the straight line depreciation method. Closing entries The closing entries are also passed on daily,weekly,monthly,semi annually and yearly bases to calculate the profit and analyze the overall performance for a certain period. Human resource Department In the Askari Bank Rahim yar khan branch , the Human Resourse Department also works together alongwith the account department and by the same employees.Though most of the human resource related policies and activities are centralized in Askari Bank,yet this department perform some activities like performance evaluation report making of bank employees ,feedback /complains from employees, any conflict or problem resolution with the bank or its employees.This department also monitors and handles matters relevant to internship and internees.Obviously it is this department that clarify any candidate for internship approval ,then makes its placement and finally evaluate its performance and task performed and grants the Internship Letter.
Summarized performance of Askari Bank At the end of 2009
Operating Profit-------------------------------------Rs 4.557 Billion Profit after tax---------------------------------------Rs 1.108 Billion ( Up by 187%) Total Assets-----------------------------------------Rs 254 Billion ( up by 23%) Deposits----------------------------------------------Rs 206 Billion ( up by 23%) Deposit Accounts----------------------------------692821 Shareholder fund----------------------------------Rs 14.95 billion Operating expanse--------------------------------Rs 7030 Million Equity-------------------------------------------------Rs 14.95 Billion (up by 15%) Advances--------------------------------------------Rs 148 Billion(up by 6%) Market price per share---------------------------Rs 27.30 ( up by 87%) EPS---------------------------------------------------Rs 2.18 (up by 187%) Permanent employees---------------------------4461 Temporary employees---------------------------1669 Branch network------------------------------------226
Statement of Financial Position (As at December 31, 2009) 2007 Assets Cash And balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub–ordinated loans Deferred tax liabilities Other liabilities Net Assets Presented by Share Capital Reserves Unappropriated profit Surplus on revaluation of assets – net of tax 13,356
3,497 14,444 39,431 100,780 5,128 5,535 182,172 2,627 17,554 143,037 2,997 472 3,220 169,906 12,266 3,006 6,948 2,145 12,100 166 12,266
2008 2009 Rupees in millions 16,030 3,955 4,480 35,678 128,818 8,266 8,964 206,191 2,585 15,190 167,677 2,996 13 4,759 193,220 12,971 4,059 7,667 309 12,035 936 12,971 19,386 8,364 4,614 67,046 135,034 9,846 10,036 254,327 2,946 19,300 205,970 5,995 334 4,833 239,378 14,949 5,073 7,183 886 13,143 1,806 14,949
Profit and Loss Accounts (As at December 31, 2009) 2007 Mark–up / return / interest earned Mark–up / return / interest expensed Net mark–up / interest income Provision against non–performing loans and advances Impairment loss on AFS investments Provision for impairment in the value of investments / Rev repo Bad debts written off directly Net mark–up / interest income after provisions Non mark–up/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments – net Unrealised gain on revaluation of investments classified as held for trading – net Other income Total non–markup / interest income Non mark–up/interest expenses Administrative expenses Other charges Total non–markup / interest expenses Profit before taxation Taxation – current ‘prior years’ ‘ deferred Profit after taxation Basic / diluted earnings per share – Rupees 15,143
8,686 6,458 3,920 – 2 3,922 2,536
2008 2009 Rupees in Millions 18,393 22,662 10,651 13,629 7,743 3,825 1 247 4,073 3,670 1,258 174 874 37 22 343 2,707 6,377 5,904 11 5,916 461 17 (50) 108 75 386 0.76 9,033 2,324 431 77 2,915 6,118 1,308 163 538 144 (2) 404 2,555 8,672 6,996 34 7,030 1,642 562 120 (147) 534 1,108 2.18
1,073 137 656 2,361 2
337 4,565 7,101 4,790 12 4,802 2,300 99 (234) (246) (381) 2,681 6.61
Current Ratio = Current Assets / Current liabilities
Current Assets Current Liabilities Current Ratio
(Ruppees in 000’s)
141907045 162223257 136512477 1.039 154980358 1.04 177043457 169905898 1.05 197924680 193219775 1.01 244481006 239378374 1.03
1.06 1.04 1.02 1 0.98 1.039 1.04 1.05 1.03 1.01
Belonging from Liquidity ratios, this ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.
So Askari Bank is currently going adequate at it
= ( Current assets - Receivables ) / Current liabilities
(Ruppees in 000’s)
Current assets 55930150 63043885 receivables Current Liabilities 136512477 154980358 Current Ratio 0.40 0.40 76263295 169905898 0.44 69106438 193219775 0.35 109446507 239378374 0.45
0.6 0.4 0.2 0 2005 2006 2007 2008 2009 0.4 0.4 0.44 0.35 0.45
Also Belonging from Liquidity ratio, the quick ratio is more conservative than the current ratio, a more well-known liquidity measure, because it excludes receivables from current assets. The resulting assets are therefore highly liquidized. Thus gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term most liquidized assets.
=Total liabilities/Total assets
Total Liabilites Total assets Current Ratio
(Ruppees in 000’s)
136512477 154980358 145099907 0.940 166033588 0.933 169905898 182171885 0.9326 193219775 206191138 0.9370 239378374 254327446 0.9412
0.945 0.94 0.935 0.93 0.925 0.94 0.933 0.9326 0.937 0.9412
Belonging from solvency ratios,this ratio indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load. As the latest figure is less than 1 or 100 % ,this means that Askari Bank has more assets as compared to its liabilities.
Operating Profit Ratio
=Operating profit / turnover
Operating Profit Turnover Op. Profit Ratio
(Ruppees in Million’s)
3461 6055 57% 4476 7759 57% 6222 11024 56% 4534 10450 43% 4557 11588 39%
60% 40% 20% 0% 2005 2006 2007 2008 2009 57% 57% 56% 43% 39%
Belonging from profitability ratios , this ratio used to measure a company's pricing strategy and operating efficiency. Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each Currency unit of sales.
Net Profit Margin
=Net Profit/ Turnover
(Ruppees in Million’s)
Net Profit Turnover Net profit ratio 2022 6055 33% 2250 7759 28% 2681 11024 24.3% 386 10450 3.6% 1108 11588 9.5%
40% 30% 20% 10% 0% 33% 28% 24% 4% 2005 2006 2007 2008 10%
Also belonging from profitability ratios, Net Profit margin is an indicator of a company's pricing strategies and how well it controls costs. The net profit margin ratio tells us the amount of net profit a business has earned. That is, after taking account of the cost of sales, the administration costs, the selling and distributions costs and all other costs, the net profit is the profit that is left, out of which they will pay interest, tax, dividends and so on.
Return on average assets
= Net income / Total assets
Net income Total assets ROA
(Ruppees in Million’s)
2022 145100 1.40% 2250 166034 1.40% 2681 182172 1.50% 386 206191 0.19% 1108 254327 0.44%
2% 2% 1% 1% 0% 1% 1% 2% 0% 2005 2006 2007 2008 0%
Also belonging from profitability ratios ,It is indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. The assets of the company are comprised of both debt and equity. Both of these types of financing are used to fund the operations of the company. The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment.
Return on equity = Net Income / shareholders equity
Net income Total equity ROE
(Ruppees in Million’s)
2022 8813 23% 2250 11053 21% 2681 12266 23.3% 386 12971 3.01% 1108 14949 7.4%
30% 20% 10% 0% 2005 2006 2007 2008 2009 3% 23% 21% 23% 7%
Also belonging from profitability ratios ,It tells measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. amount of net income returned as a percentage of shareholders equity. Return on equity
Profit before tax Ratio = Net profit before tax/ Turnover
Net profit before tax Turnover 6055 Profit before tax ratio 47%
(Ruppees in Million’s)
2859 3347 7759 43% 2300 11024 20% 461 10450 4.41% 1642 11588 14.16%
Profit before tax ratio
60% 40% 20% 0% 2005 2006 2007 2008 2009 47% 43% 20% 4% 14%
Also belonging from profitability ratios ,this measure looks at a company's profits before the company has to pay corporate income tax. This measure deducts all expenses from revenue including interest expenses and operating expenses, but it leaves out the payment of tax.
Price Earning Ratio
=Market price per share /Earning per share
Market price per share EPS Price earning ratio
126.80 13.42 9.44
104.95 7.48 14
99.75 8.92 11.18
14.57 0.95 15.33
27.30 2.18 12.52
price earning Ratio
20 15 10 5 0 9.44 14 11.18 15.33 12.52
Belonging to investment ratios ,It is a valuation ratio of a company's current share price compared to its per-share earnings.
Dividend Payout Ratio =Dividend per share/ EPS
Dividend per share EPS 13.42 Dividend payout ratio 11.18%
1 7.48 13.37%
1.5 8.92 16.82% 0.95 2.18 -
Dividend payout Ratio
20.00% 15.00% 10.00% 5.00% 0.00% 11.18% 13.37% 16.82%
0 2005 2006 2007 2008
Belonging to investment ratios, the payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio
Dividend yield ratio =Dividend per share/Market price per share
Dividend per share Market price per share Dividend Yield ratio
1.5 126.80 1.18%
1 104.95 0.95%
1.5 99.75 1.50% 14.57 27.30 -
Dividend Yield Ratio
2.00% 1.50% 1.50% 1.18% 0.95% 1.00% 0.50% 0 0 0.00% 2005 2006 2007 2008 2009 Div idend Yield Ratio
Belonging to investment ratios ,it shows how much a company pays out in dividends
each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.
Advance to Deposit Ratio = Total advances / total deposit
Advances 85977 deposits 118795 Advance to deposit ratio 72.40%
Ruppees in Million’s
99179 131839 75.23% 100780 143037 70.46% 128818 167677 76.82% 135034 205970 65%
Advance to deposit Ratio
76.82% 80.00% 72.40%75.23% 70.46% 75.00% 65% 70.00% 65.00% 60.00% 55.00% 2005 2006 2007 2008 2009 Adv ance to deposit Ratio
Belonging to activity ratio,it is particularly about banks that how much they have coming in (deposits) vs how much they have going out (loans). The more money the bank has loaned out generates more interest income provided the loans are to secure borrowers But they should not exceed 100%. Do not loan out more money than they have on hand. They have to borrow from the Federal Reserve if they do. Capital adequacy ratio
= ( 50% of RF limit) + ( 100% of CF limit) +( 50 % of LG- cash margin)
Advance to deposit Ratio
15.00% 11.00% 10.90% 9.35% 10.00% 5.00% 0.00% 2005 2006 2007 2008 2009 9.22% 12% Adv ance to deposit Ratio
Capital Adequacy Ratio (CAR) is a ratio that regulators in the banking system use to watch bank's health, specifically bank's capital to its risk. Regulators in the banking system track a bank's CAR to ensure that it can absorb a reasonable amount of loss. Here CF limit is most risky ,so we consider 100%.
Askari Bank has a massive network of 226 branches , including 31 dedicated
Islamic banking branches.This let them to serve a huge segment of customers from almost every sort of occupation, and make more profitable relationships with customers by satisfying their customized needs.The bank has not retained here but is inclining at its journey of success as opening of many new branches in remote areas as well as in serving areas, is under consideration.
Askari bank is a subsidiary business unit of Army Welfare Trust.This is one of the
biggest strength for the bank because Army Welfare Trust has established strong financial,industrial,technological and diversed market matrix.They have a well furnished logistics infrastructure.This has lead in attracting large number of customers and also making strong and long lasting relationships with industrial and corporate level clients.Also now the salaries of military personnels are dispatched by Askari Bank.All these things have turned Askari Bank as the fastest growing bank of Pakistan.The many awards that it has received is clear sign of its brisk progress.
Askari bank is serving a huge market segments and its market offering are also
diverse and flexible according to the segment needs and specification.However this has not let the bank to compromise at its quality standards.Supreme and elegant service is the top most priority of the bank.
Askari Bank has the largest ATM network in the county that comprises of shared
network of 4,173 online ATMs covering all major cities in the country.These machines can be used at any time.Askari Bank has installed the technologically advanced and latest ATM machines that work in optimized way without any obstacles like jamming etc. Askari bank is powered by Army welfare turst.So discipline and time is given the utmost importance.The employees reach the branch atleast ten minutes before 9 am and the banking activities are launched right at 9 am and its goes non stop upto 5 am.This thing makes the customers feel very ease to visit the bank.This finally leads to customer loyalty ,retention and thus profitable relationship.Disciplines obviously garnishes and boosts the activities and behaviors of employees. Askari Bank believes in customer orientation.It offers huge flexibility in its various services and thus it becomes very simple,easy ,attracting and affordable for the customer to chose the desired facility.The bank pays keen attentation at customer relationship management and special purposely developed softwares and technological instruments are used for this matter.
Information technology has revolutionalized the banking industry.Askari bank’s
management believes is embracing the state-of-art and latest technology to ensure brisk and quality services.This not only provides the quality in offering services but also saves time,energy and cost. ACBL management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process, computer based teller equipment, automatic teller machines, and electronic funds transfers among the others and also Askari Bank is the first to launch many of these services.
Askari bank has keen
concern for the people, ethics and environment .So it enjoys good and better public reputation,goodwill as compared to its competitors. This is one of the greatest strengths that lets bank not only to retain existing customers but also to attract new customers.The bank has made enough contributions in sports sponsorships, education ,environmental friendly and other social activities.
The human resource philosophy at Askari Bank focuses on multi-talent merit based hiring, professional grooming, requisite training.the employees are consistently undergone by various sorts of trainings.These talented ,multi skilled ,motivated and energetic employees are the assets of Askari Bank.and the Bank pays special attention to their circumstances.Askari Bank gives maximum salary to employees among all private banks.In addition to basic salary,there are many other rewards like insurances ,medical and bonuses .Employees here feel secure at their position and have maximum job security.These all elements acts as huge motivational source for employees and the result is that bank enjoys their maximum output.
Though much of the work is computerized but even then at few places ,the employees do some work at hands and then also record at computer.This dual recording takes more time.
There is a high degree of centralization in the bank.Even minute level problems
and matters are sent to higher management for recognition.This results in delay at work both at the part of employees as well as customers.
Askari Bank is providing credit facilities mostly in the urban areas but this facility
is much limited and strict in rural areas.
Askari bank is paying more importance to commercial credits . Pakistan is
agriculture country but agri credits are less favoured.Also their criteria standards ,terms and conditions are more rigid. Small and Medium industries play a vital role in our economy.but the bank is not offering any peculiar services for them.They can avail the general commercial credits only.Which is some cases , becomes inadequate for such industries.
The documentation process specially in credit department is much complex and
time taking.In many cases ,a single sort of information is narrated many times at different pages.This takes extra time and energy.It can be overcome by full computerized activities.
Like many other ,employees here are given targets specially for deposits.This
diverts the attention of employees to fulfill target and they spend their mind and energy in doing this.This behaviour discourages creativity and innovation.
In any single city ,Askari Bank has not adequate number of branches as
compared to its competitors like MCB, UBL, ABL,Bank Alfalah etc..It has only single branch in most of cities including Rahim Yar Khan.This thing may facilitate its competitors to serve and win more customers.
Though Askari Bank has central Human resource department but as far I have
observed ,the HRM department at RYK branch is just upto the extent of existing.No special problem solving unit is there to monitor employees complients ,suggestions and other problems.
Though Askari Bank is offering locker facility but it is limited and is not offered in all of its branches. The dedicated Islamic Banking Branches offered by Askari Bank are very less as compared to its competitors.
Askari Bank has a less branch network as compared to its competitors .Opening
more branches in existing as well as new markets will also be huge opportunity for the bank.
Askari Bank has no foreign branches in countries like UK ,USA,Saudi Arabia
,United Arab Emirates etc. A large Pakistani community lives in these countries.So it can open its foreign branches in these countries. A major proportion of population in our country lives in rural areas .but Askari Bank has negligible branches in Rural areas.Opening more branches in these areas could be a good growth and progressive opportunity. Banking practices in West now enjoy full computerized mechanism.which completely gets rid of any sort of manual work by hands.Askari Bank should adopt such practices that will save time ,cost and energy both at the part of customers and employees. Islamic Banking is getting rapid success and repute among Muslim countries.It has also been charted by some Muslim scholars.Being according to the values and practices of Islam, it has won more trust of people.Currently Askari Bank has only 31 branches dedicated to Islamic Banking.Opening more Islamic Banking branches could be massive opportunity for the bank.
A large majority of students studying in larger cities use ATM cards.Askari Bank
can attract such customers by offering flexible and appealing packages and services relevant to ATM and basic banking accounts.
Small and Medium enterprises are playing a back bone role in Pakistani
Industry.Askari Bank has splendid opportunity by serving peculiarly to such segments by opening dedicated branches to them that would be specialized in marketing offers for such segments. Askari Bank could focus at specialized money transferring services as being offered by Western Union.An existing market repute ,goodwill and the back of Army Welfare Trust will let it to boost it this segment as well.
Charges received by Askari bank are higher as compared to its competitors.Though it is also providing more supreme services,but this thing may become as their threat. Askari bank is suffering many massive expanses that can be avoided.For example,most of its branches operate at rented building.The higher commercial rents of such branches accumulate to form a huge expanse that bank has to suffer. The briskly inclining rate of inflation , increasing prices of major commodities like electricity , gas , phone etc ,unemployment has massively affected the purchasing power of common people.This is one of the largest threat for it. The present economical , political and current circumstances of the country are very discouraging for the banking industry.There are so many crises , war against terrorism .These factors ultimately affect the business activities in a very adverse manner. The stiff competition from many competitors in banking industry is also an alarming factor.Also at present,the bank is facing tough competition and unfavorable forces specially as it tries to launch operations in new and remote markets.The bank should regulate special policies to overcome these. Askari Bank is powered by Army Welfare Trust.Unfortunately there are some forces within the country that are against the Army.Thinking Askari Bank to be an Army based ,organizationSuch elements may prove a big threat. Though Askari Bank is paying elegant salaries and other rewards to its employees but even then there is high rate of employee turnover.This could be a big threat for the bank. Recent flood has massively destroyed many parts of our country.Such natural disasters are also big threat for the bank.Already Askari Banks is suffering loss of millions of ruppess because of recent floods in the country.
Suggestions & Recommendations
Doing internship at Askari Bank was an interesting ,gaining ,grooming and ever remembering experience .The highly cooperative staff , variety of tasks , dealing and communication with customers and documentation were some of tasks that made me to gain a lot. Though there every activity was at its elegance,but I am here giving some suggestions that in my thinking will be beneficial for the bank.
Askari Bank must expand its network of branches.Like in Rahim yar khan, it holds single branches in most of cities.This thing could be very fragile for bank as its competitors are serving more than one branches in single city as well.
Pakistan is an agricultural country and most of its population lives in villages and
rural areas .However contrary to this fact,almost all of the branches of Askari bank are in urban areas.Bank’s management should pay serious attention to this.Though bank is offering special services in agriculture but clients has to travel far to urban areas to access its services.So there are much chances that such customers turn to some other bank. Today is the era of electronic media and advertising play a major role in the success and worth building of any organization.Askari bank’s management should pay some attention at this side as well .By giving consistent advertisements in electronic as well as print media to aware, retain,attract and appeal people. There is a high degree of centralization in Askari Bank.It should be bit flexible as here in this branch,I have seen many simple cases where many matters get late or pending because the case is being sent to higher authorities for approval.
Though there exists Human Resource Department in Askari Bank ,Rahim Yar
Khan but it is just upto name of existence.There is no HR specialized personnel for it and normally accounts department employees also perform its tasks and activities.This should be removed and HRM department should be trimmed with specialized persons in order to ensure efficient and effective working of this department. Askari Bank offers higher charges in many of its services as compared to its competitors.I think they should be bit flexible in this regard. The present branch is in a rented place that is not purposely built .The numbers of customers are growing quickly with the passage of time and now sometimes there get much rush and no place gets available to sit.This also results in unwanted noise that disturbs all the people there.So the branch management should highlight this issue to the higher authorities and branch should be shifted to some new purposely built venue.
Askari Bank is appearing as a strong financial institution that has recently celebrated its 18th birthday during these summers.The organizational policies ,vision and mission all depict its essence and ideology of an ideal banking
institution that delivers elegant services by nourishing supreme ,competitive and favorable environment. Overall experience there was very good .Branch management pays keen attention and concern for all employees.The employees are motivated ,energetic ,well groomed and trained in order to serve the customers in most effective manner.Special individualized attention is paid to every customer and is also given guidance in important consultancy. However due to growing number of customers and over whelming work ,its becomes very difficult for managers to properly guide internees.And internees have to put maximum effort and patience to get guidance and knowledge. All the department have their own importance in bank.And so internees are sometimes rotated in all departments but this gives them negligible time to get adequate grip and knowledge in any particular department.Before me,few internees were given full rotation in bank but at my time and after that, internees were confined to few departments only.
I started my internship at general credit department, then proceeded to accounts department ,then to leasing department ,then to agri credit department and finally again back to general credit department where my tenure of internship ended. Besides the routine banking activities,the employees also used to enjoy pleasing occasions like on raining day,they used to enjoy traditional food items like pakoray etc.This thing is very good because such little pleasing moments and happiness let employees to get fresh and have sometime to be spent together. As far as the future of Askari Bank is concerned, I perceive it is very splendid .The bank’s policies, vision , flexible approach ,financial strength , strong back and firm foundation ,all these elements have already put the bank on its journey to marvelous success .It has proved its value and strength in a very brief span of time and yet it has a long way to go ahead.The commitment ,teamwork and fairness of bank’s employees and the integrity of all of its activities are focused at efforts driven towards success ,customer satisfaction and eventually long term profitable relationships.
www.askaribank.com.pk www.awt.com.pk www.brecorder.com www.wikipedia.com www.google.com http://www.onepakistan.com/finance/news/ http://www.pakistanbizbuzz.com/articles/business/ http://www.ibp.org.pk/
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