FACULTY OF COMMERCE

MONEY BANKING AND COMMERCE

SUBMITTED TO:
PROF. AHMED ASHRAF

SUBMITTED BY:
“Task Masters”
“BS. COMMERCE”
PROJECT

Submitted Date: 17/2/2020

FACULTY OF COMMERCE

GROUP MEMBERS
• Ahmad Ali
G1F17BSCM0025
• Fatima Zahra
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DEDICATION
It’s Start in the name of Allah Almighty, who is over creator and my
strong pillar, my source of inspiration, wisdom, knowledge and
understanding. He Has-been the source of my strength and on His wings
only have I soared.

I dedicate this Report to the founder of Shaukat Khanum.

“Imran Khan Niazi”
“May ALLAH PAK grant him a long life”
ACKNOWLEDGEMENT

First of all, we would like to thank Almighty Allah for giving us

the ability and strength to complete this project report. Secondly,
we are also thankful to our respective parents for providing us
with the opportunity to receive higher education in such an
accomplished institution (UCP) that required us to carry out
such projects that expand the dimensions of our mind. We are
definitely not forgetting to recognize the efforts and support of
our Respected Teacher SIR Ahmed Ashraf, without whom this
project would not have been possible. Who give us the
opportunity to work on a project. Our special thanks to the group
members who have whole-heartedly work for the completion of
this report. All of us have earned a valuable and worthy
experience during the project.
 What is a bank?
What is the history of the bank?
Discuss the types of bank accounts?
Discuss the types of department?
What is the difference between Islamic and
conversational bank?
Conclusion and recommendation!
What is a bank?
 Bank

A bank is a financial institution licensed to receive deposits and

make loans. Banks may also provide financial services such as
wealth management, currency exchange, and safe deposit boxes.
There are several different kinds of banks including retail banks,
commercial or corporate banks, and investment banks. In most
countries, banks are regulated by the national government or
central bank.
Key features
 A bank is a financial institution licensed to receive deposits
and make loans.

 There are several types of banks including retail,

commercial, and investment banks.

 In most countries, banks are regulated by the national

government or central bank.
 What is the history of the bank?
There are various views about the origin of the word ‘bank’. One view is
that it is derived from an Italian word ‘banque’ which means a ‘bench’.
In the explanation of this view they are saying that in past in Italy the
money exchanger was sitting on benches and doing their businesses.
Crowther in his famous book “An outline of money” has traced the
history of modern commercial banking. According to him the present
day banker has three ancestors. 1. The merchants 2. The goldsmiths 3.
The money lenders
The Merchants: The earliest stage in the growth of banking
can be traced to the working of merchants. These merchants
were traders in commodities. The trading activities were carried
on by them from one place to another. It was risky for traders to
carry metallic money with themselves for payment. The traders
with high reputation begin to issue receipts which were accepted
as title of money. These receipts or letters of transfer also called
hundi in indo sub continents were the first mode of payments.
The merchant banking thus forms the earliest stage in the
evolution of modern banking
The Goldsmiths: The second stage in the growth of banking
is normally traced to the earlier goldsmith. These goldsmiths
also called “seths” in India used to receive gold and silver for
safe custody. The goldsmiths begin to issue receipts for the
metallic money (gold and silver) kept with them. These receipts
became payable to the bearer on demand. In this way the
goldsmith note became a medium of exchange and a mean of
payment. The goldsmith thus can rightly be termed as the
forerunners of the modern bank notes.
The money lenders: The third stage in the development of
banking arose when goldsmiths became money lenders. By
experience the goldsmith (who were called money lenders) came
to know that they could keep a small proportion of the total
deposits for meeting the demands of customers for cash and the
rest the could easily lend. They allow the depositors to draw
over and above the money actually standing to their credit (they
allow overdraft facility). When every money lender/goldsmith
issued receipts and many of them allowed overdraft facilities
there were then too much confusion in the banking system. The
money lenders/goldsmiths in order to earn more profits could
not keep adequate reserves for meeting the demands of the
customers for cash.
Modern banking practices, including fractional reserve banking
and the issue of banknotes, emerged in the 17th and 18th
centuries. Merchants started to store their gold with the
goldsmiths of London, who possessed private vaults, and
charged a fee for that service. In exchange for each deposit of
precious metal, the goldsmiths issued receipts certifying the
quantity and purity of the metal they held as a Bailee; these
receipts could not be assigned, only the original depositor could
collect the stored goods.
 History of UBL

On 7 November 1959, Pakistan witnessed an event that would change

the way we banked forever. It was not just the inauguration of UBL’s
first branch at I.I. Chundrigar; it was also the birth of the culture of
service, a culture of innovation and a culture of financial excellence!
By June 1960, shortly after six months of opening its doors to the public,
UBL had branches in:
 Karachi
 Dacca
 Lahore
 Lyallpur
 Chittagong
 Narayanganj
In 1963, UBL became the first bank in Pakistan to have a branch
overseas- on William Street in London, United Kingdom. True to our
promise of providing service and care beyond the ordinary to our
customers, UBL and You have had a history. The first saving scheme for
school going children was launched as early as 1960 or the formation of
Pakistan’s first Staff College of employees in 1964, UBL, through the
motivation of its staff and the trust of its customers, continued to grow at
a spectacular pace.
In the 1990’s the government of Pakistan decided to change the face of
banking by creating a blueprint to privatize UBL. At this point, financial
experts were called on board to set the bank back on course, and with
implementation of relevant changes, the government privatized the bank
in the year 2002 – Best way and Al Ayaan collaborated, forming the
cornerstone for the UBL of tomorrow.
Today, UBL opens its eyes to a new vision every day, a vision of
resurgent excellence and renewed commitment to our customers. 58
years into our glorious history – UBL is now part of one of the world’s
largest financial services groups.
 Types of bank accounts?

Bank Accounts are classified into four different types. They are,
1) Current Account
2) Savings Account
3) Recurring Deposit Account
4) Fixed Deposit Account
What is Current Account?
Current account is mainly for business persons, firms, companies, public
enterprises etc. and are never used for the purpose of investment or
savings. These deposits are the most liquid deposits and there are no
limits for number of transactions or the amount of transactions in a day.
While, there is no interest paid on amount held in the account, banks
charges certain service charges, on such accounts.
What is Savings Account?
Savings Account is meant for saving purposes. Any individual either
single or jointly can open a savings account. Most of the salaried
persons, pensioners and students use Savings Account. The advantage of
having Savings Account is Banks pay interest for the savings. The
saving account holder is allowed to withdraw money from the account as
and when required.
There is no restriction on the number and amount of deposits.
What is Recurring Deposit Account?
Recurring deposit account or RD account is opened by those who want
to save certain amount of money regularly for a certain period of time
and earn a higher interest rate. In RD account a fixed amount is
deposited every month for a specified period and the total amount is
repaid with interest at the end of the particular fixed period.
These accounts can be opened in single or joint names. Banks are also
providing the Nomination facility to the RD account holders.

What is Fixed Deposit Account?

In Fixed Deposit Account (also known as FD Account), a particular sum
of money is deposited in a bank for specific period of time. It’s one-time
deposit and one time take away (withdraw) account. The money
deposited in this account cannot be withdrawn before the expiry of
period.
A high interest rate is paid on fixed deposits. The rate of interest paid for
fixed deposit vary according to amount, period and also from bank to
bank.
 Types of department
Consumer Products
 UBL Drive
Accelerate your life; Drive the way that suits you! UBL
Drive is a unique auto financing product which offers you
features, option and flexibility.

 UBL Cash line

UBL Cash line is a flexible loan that provides you cash up
to Rs. 500,000 without any security requirements. UBL
Cash line is aimed to make your life easier…

 UBL Money
It’s about buying new furniture or marriage expenses,
financing the education of your child or enjoying vacations
abroad! You can borrow any sum between 50,000 -
500,000 (PKR) and payoff up till 5 years.
UBL Omni
Now brings a host of banking services to your nearest "Dukaan".
UBL Omni Dukaan’s are located in more than 580 cities and
towns across Pakistan. This is a major milestone in the evolution
of banking.
 Account Opening
 Cash Deposit
 Cash Withdrawal
 Utility Bill Payments
 Mobile Voucher Purchase (Free)
 Mobile postpaid Bill Payment (Free)
 Cash Withdrawal from Omni account (Not applicable on
Omni Money Transfer) 1.5% of the withdrawal amount

Corporative
 UBL Business Line
UBL Business line a complete solution to all your Business
Financing needs. With UBL Business Financing facility,
you can now take your business to greater and newer
heights, and achieve the level of success that you truly
deserve.
HUMAN RESOURCE MANAGEMENT
 Source of new employee: -
i. Internal source. (Transfer, Promotions)
ii. External source. (Outsourcing Agencies)
 Employment selection process: -
i. Bachelor degree,
ii. Age up to 26 Years,
iii. Excellent presentation skill.
iv. Written test of short listed candidates.
v. Interview conducted by experienced panel.
vi. Appointment letter sent to selected candidate.

 Training and Development: -

i. Two months training on the job.
ii. Branch manager point out weak areas.
iii. Minimum six weeks training.
INFORMATION TECHNOLOGY DEPARTMENT
Operations of UBL have been significantly streamlined post-
privatization, however further plans for improving operational
efficiency are under-way. Currently the bank is using internally
developed distributed database software called UNIBANK. This
software is utilizing Oracle Financials at the back end. As all
daily banking transactions are stored at the respective branches,
consolidation at the head office takes place at day end. The bank
has specialized software to support its various functions and the
focus for some time has now been on enterprise application
integration (middleware). The management launched a
transformation program in 2006 which aims to accomplish bank-
wide business and technology reengineering.
AUDIT DEPARTMENT
The Board Audit Committee (BAC) comprising three members
meets every quarter and is responsible, among other things, for
ensuring the effectiveness of the internal audit function and
systems for monitoring compliance. Internal audit procedures
include routine branch and business function audit as well as
special surprise audits
Difference between conventional bank and
Islamic bank
 Current account
Conventional bank Islamic bank
•No specific underlying •Ameen Current Account is based
mode is used in Current on Qard contract where the Bank
Account. is liable to pay depositor’s money
back on demand.
•The Bank can use these •The Bank can use these funds for
funds for investment and investment and other purposes. It
other purposes regardless allows satisfaction of having the
Shariah prohibition. money safely deposited with a
bank with the additional assurance
that the Bank is not investing it in
activities that contravene Shariah
principles.
 Free of cost services are  Free of cost services are offered
offered to customer to all customers across the board
which tantamount to means all free services are
interest. offered to current as well as
saving accountholders.
 Saving account
Conventional bank Islamic bank
•No specific underlying •Islamic Saving Account is an
mode is used in Saving “investment for profit” account
Account. governed under the rules of
Mudarabah with an objective to
provide return on the investment.
•The Bank can use these •The funds deposited will be
funds for investment and invested in an investment pool;
other purposes regardless investment/deposit/transfer-in of
Shariah prohibition. funds will be deemed purchase of
investment share in the respective
investment pool and withdrawal /
encashment / premature
encashment of funds are deemed
to be sale of investment share in
the said investment pool.
•Debtor-Creditor •Mudarib, Rab-ul-Maal/Partners.
Relationship.

 Interest.  Profit.
 Leasing/ijarah
Conventional bank Islamic bank
 Lease commences the very day  Rentals start after the delivery
on which the price is paid by of asset, not from the day the
the Bank, whether the price has been paid by Bank.
Customer has taken the
delivery or not.

 Expenses incurred in the  Bank is the owner of the asset

process of purchase of asset are therefore it is liable to pay all
paid by the Customer expenses incurred in the
process of its purchase

 Lease does not differentiate  The Customer is responsible

between wear & tear or losses only for misuse and
caused by the negligence of negligence, but not for events
Customer and Customer is beyond control. In Auto Ijarah,
liable for cost incurred due to each situation is treated
natural disasters. separately.

 Penalty charges are taken from  If the Customer fails to pay

Customer on late payment.
They are taken as income by
the Bank.
rental on due date, customer
under takes to pay charity
which is credited into charity
account, for further
disbursement to charitable
organizations.
 In a lease agreement it has  If the Customer breaks any
been noticed that unrestricted term of the agreement, Bank
power has been given to Bank has a right to terminate Auto
to terminate the lease Ijarah unilaterally. However, if
unilaterally. there is no contravention at
Customer’s end Auto Ijarah
cannot be terminated without
mutual consent.

Lending/financing
Conventional bank Islamic bank
 Conventional banks are in the  Islamic Banks are not money
business of lending & lending institutes but they work
borrowing money based on as a trading/ investment house.
interest.
 In Conventional banks, we see  Islamic Banks work under the
no such restrictions. Interest is socio-religious guidelines that
the back-bone of this system prohibit charging and paying
and short selling, sale of debts interest and avoid all
and speculative transactions are impermissible transactions like
common. gambling, speculation, short
selling & Sale of debts &
receivables.
 In Conventional Banks, all  Islamic Banks do not permit
types of industries are financed, financing to industries that
only businesses deemed illegal cause harm to the society such
by the law of the land are not as alcohol, tobacco etc
supported.
 Generally Conventional Banks  One of the Islamic Bank
do not involve themselves in business model is based on
trade and business as they act trade, thus it needs to actively
only as money lenders. participate in trade and
production process and
activities.
 In Conventional Bank, no such  Islamic Banks have strong
framework is present. Shariah governing framework
in terms of Shariah Board, who
approves the transactions and
products in the light of the
Shariah rulings.
 In Conventional Banks almost  Islamic Banks recognize loan as
all the financing and deposit non-commercial and exclude it
side products are loan based. from the domain of commercial
transactions. Any loan given by
Islamic Banks must be interest
free.
 Conventional Bank treats  Islamic banking products are
money as a commodity and usually asset backed and
lend it against interest as its involves trading of assets,
compensation. renting of asset and
participation on profit & loss
basis.
 Relation of customer & bank is  Relationship of customer &
of Creditor-Debtor. bank is of Seller- Buyer and
Partner.
 Compensation is always  Compensation is always Price
Interest (Thaman)
Conclusion
UBL is standing tall and doing their very best but there are some
places where they are doing some kind of childish mistakes and
lacking. UBL’s I.T department needs to work out a little more to
get UBL out of these situations that lacking at some places.
They are well organized, well equipped but they need to do
work on human psychological development to understand what
they want because centralization. They would have to take
initiative to upgrade as soon as possible as a new upgrade
arrives we know that it’s not an easy task to do but still they
need to work out on it otherwise someone else would win the
technological battle. Have to make an easy step procedure which
makes third customers not too wait a long for just a simple thing
or account balance inquiry etc.
Recommendations
UBL’S top management must adopt such strategies, that will
helpful in eradication of internet politics. Divide equal work to
employees because in this branch, some employees have a lot of
work and some have few. They must need to check whether
their employees are doing their job well or not. Lastly, they
should take suggestions in managerial decision to promote them
to make decisions.